Document:

d878630_ex4-9.htm

    Exhibit
4.9

    

    MASTER
MANAGEMENT AGREEMENT

    

    

    This
Amended Master Management Agreement (the “Agreement”), dated as of
February 7th,, 2008 amends the Master Management Agreement dated as of September
29th 2006 and amended on  the 17th of July
2007 between Euroseas Ltd. (the “Company”), in its own capacity
and as agent for each of its vessel owning subsidiaries identified in Schedule A
hereto together with any additional subsidiaries that may acquire vessels in the
future (the “Subsidiaries”) and Eurobulk
Ltd. (the “Manager”).

    

    WHEREAS

    

    
      	
              (A)

            	
              The
      Subsidiaries are the registered owners of the ships (the “Vessels”) described in
      Schedule A annexed hereto, as such Schedule may be amended from time to
      time.

            

    

    

    
      	
              (B)

            	
              The
      Company has retained the Manager to provide, subject to the terms and
      conditions set forth herein, management services in respect of the Vessels
      and to the Company and the Manager is willing and able to provide such
      management services.

            

    

    

    
      	
              (C)

            	
              The
      Company and the Manager wish to restate their current agreement in a
      comprehensive manner.  This Agreement is not intended to alter
      any substantive arrangements between the parties except renewing its term
      and adjusting the fees payable.

            

    

    

    

    NOW therefore, in
consideration of the foregoing and for other good and valuable consideration,
the parties hereto agree as follows:

    

    
      	
              1.

            	
              APPOINTMENT

            

    

    

    
      	
               
      

            	
              1.

            	
              The
      Manager is hereby appointed by the Company as manager and the Manager
      hereby agrees to act as manager of the Vessels and to the
      Company.

            

    

    

    
      	
               
      

            	
              2.

            	
              The
      Manager undertakes to use its best endeavours to provide the following
      services to the Vessels, namely: Crewing, Technical Management, Insurance,
      Freight Management, Accounting, Chartering, Sale and Purchase, Provisions,
      Bunkering and Operation (the “Services”).  The
      parties acknowledge that in performing these services the Manager may use
      other agents, consultants, brokers etc as is customary, some of which may
      be affiliates. In particular the parties acknowledge that the Manager’s
      exclusive agent in respect of Chartering and Purchase and Sale
      transactions is Eurochart S.A, an
affiliate.

            

    

    

    
      	
               
      

            	
              3.

            	
              The
      Manager undertakes to use its best endeavours to provide the following
      services to the Company: compliance with SEC rules and regulations,
      compliance with Sarbanes-Oxley and various other services related to the
      proper administration of the Company’s obligations for the proper
      operation of the Vessels (the “Services”).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              4.

            	
              The
      Manager shall render advice and provide executive services to the Company
      from time to time, including, but not limited to, the services of a chief
      executive officer, a chief financial officer, a chief administrative
      officer, an internal auditor and a secretary and such other matters as may
      be mutually agreed between the Manager and the Company. The executive
      services shall only be performed by the following persons: President and
      Chief Executive officer by Aristides J Pittas; Chief Financial officer and
      Treasurer by Anastasios Aslidis; Chief Administrative Officer by Symeon
      Pariaros, Internal Auditor by Konstantine Xarhas and Secretary by
      Stephania Karmiri. Any other person performing any of these services must
      first be approved by the Company in
writing.

            

    

    

    
      	
               
      

            	
              5.

            	
              The
      terms of conditions under which the Manager will provide the Services to
      the Vessels are set out in the attached BIMCO standard Ship Management
      Agreement (“SHIPMAN”) as amended,
      which is hereby attached - Schedule B. Each Subsidiary will sign a
      management agreement with the Manager. The terms and conditions of this
      Agreement in relation to the Services to be provided by the Manager to the
      Vessels shall prevail over the terms and conditions of the SHIPMAN to the
      extent the two are inconsistent or in
conflict.

            

    

    

    
      	
               
      

            	
              6.

            	
              In
      the exercise of its duties to the Vessels, Manager shall act faithfully
      and diligently according to prudent shipping management standards and is
      entitled to provide the services in its own discretion, subject however to
      the terms and conditions of
SHIPMAN.

            

    

    

    
      	
              2.

            	
              TERM

            

    

    

    The
engagement of the Manager shall start on February 7, 2008 and continue through
February 6, 2013 (the “Initial
Term”) and shall automatically be renewed thereafter for 5 years unless
terminated by the Company or Manager by written notice to the other on or before
the 90th day
preceding the scheduled termination date, unless sooner terminated as
hereinafter provided in section 6  below.

    

    
      	
              3.

            	
              PLACE
      OF PERFORMANCE

            

    

    

    The
Manager shall render the services at one or more suitable locations selected by
the parties.

    

    
      	
              4.

            	
              REMUNERATION

            

    

    

    In
consideration of Manager’s Services, the Company will pay the Manager a fee
broken down in two parts:

    

    1) a lump
sum fee payable directly by the Company of $1,100,000 per annum payable in
advance in four quarterly installments. This amount will be adjusted annually
(every February but valid retroactively since January 1st) for
inflation  as measured by the official inflation rate in Greece for
the preceding year.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2) a
daily fee of Euro 630 per day per vessel payable by each Subsidiary. This amount
will be adjusted annually (every February but valid retroactively since January
1st)
for the official inflation rate in Greece for the preceding year.

    

    
      	
              5.

            	
              EXPENSES

            

    

    

    In order
to facilitate Manager’s carrying out its duties hereunder to the Company, the
Company shall promptly reimburse Manager for all reasonable expenses paid or
incurred by or on behalf of the Manager in the performance of Manager’s Services
and shall reimburse the Manager for  any fees and/or commissions
charged to the Manager by other agents,consultants,brokers etc.

    

    
      	
              6.

            	
              TERMINATION

            

    

    

    This
Agreement can be terminated:

    

    
      	
              a)

            	
              For
      cause, which shall mean a party’s willful misconduct in any material
      respect, or the material breach or material failure by a party to perform
      its duties or responsibilities hereunder or under any SHIPMAN, which shall
      not have been cured within 10 days after receipt of written
      notice;

            

    

     

    
      	
               
      

            	
              b)

            	
              On
      at least 90 days written notice prior to the end of the Initial Term or
      prior to the expiration of any applicable renewal
  term;

            

    

     

    
      	
               
      

            	
              c)

            	
              If
      the Company or the Manager ceases to conduct business, or all or
      substantially all of the properties or assets of either party is sold,
      seized or appropriated; or

            

    

     

    
      	
               
      

            	
              d)

            	
              The
      Company or the Manager file a petition under any bankruptcy law or make an
      assignment for the benefit of their creditors, or otherwise seek relief
      under any law for the protection of debtors or shall adopt a plan of
      liquidation or a petition shall be filed against Company or Manager
      seeking to have it declared an insolvent or a bankrupt, and such petition
      is not dismissed or stayed within 90 days of its filing, or if Company or
      Manager shall admit in writing its insolvency or its inability to pay its
      debts as they mature, or if an order is made for the appointment of a
      liquidator, manager, receiver or trustee of Company or Manager of all or a
      substantial part of its assets, then this Agreement shall forthwith
      terminate and be of no further force and
effect.

            

    

    

    
      	
              7.

            	
              CONFIDENTIAL
      INFORMATION

            

    

    

    Manager
agrees that, during its engagement by the Company and at all times thereafter,
it will not disclose to others except to its employees, agents, advisors or
representatives, directly or indirectly, any confidential information, which is
in the nature of trade secrets, relating to the business, prospects or plans of
the Company or the Subsidiaries.  Upon termination of the engagement
with the Company, Manager shall surrender to the Company any and all work
papers, reports, manuals, documents and the like (including all originals and
copies thereof) in its or its agents or representatives’ possession which
contain any such confidential information.

    

    
    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              NONEXCLUSIVE
      ENGAGEMENT

            

    

     

    During
the term of this Agreement, Manager shall be permitted to engage in such other
business activities and perform services for entities other than the Company and
the Subsidiaries; provided, however, Manager
shall at all times provide sufficient staffing to satisfactorily perform the
Services to be provided hereunder and Manager’s engagement in rendering services
to entities other than the Company shall not substantially interfere with or
adversely affect its provision of the Services hereunder.

    

    
      	
              9.

            	
              NOTICES

            

    

    

    Any and
all notices or other communications required or permitted to be given under any
of the provisions of this Agreement shall be in writing and shall be deemed to
have been duly given and received when delivered personally or three (3) days
after mailing, if mailed by registered or certified mail, return receipt
requested.  Either party may change its mailing address for the
purposes of this Agreement by notice to the other as herein
provided.

    

    
      	
              10.

            	
              AUTHORITY

            

    

    

    The
Company represents to Manager that this Agreement has been duly authorized on
behalf of the Company by its Board of Directors. Manager represents to the
Company that this Agreement has been duly authorized on behalf of the Manager by
its Board of Directors, that it is free to enter into this Agreement and that
its entering into this Agreement does not violate any obligation that it has to
any other person or legal entity.

    

    
      	
              11.

            	
              SEPARABILITY

            

    

    

    In the
event that any provision of this Agreement would be held to be invalid or
unenforceable for any reason unless narrowed by construction, this Agreement
shall be construed as if such invalid or unenforceable provision had been more
narrowly drawn so as not to be invalid or unenforceable.  If,
notwithstanding the foregoing, any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, such invalidity or unenforceability
shall attach only to such provision and shall not affect or render invalid or
unenforceable any other provision of this Agreement.

    

    
      	
              12.

            	
              MISCELLANEOUS

            

    

    

    (a)           This
Agreement sets forth the entire understanding of the Company and Manager with
respect to the subject matter hereof and cannot be amended or modified except by
a writing signed by each of the parties hereto.  No waiver of any
term, condition or obligation of this Agreement shall be valid unless in writing
and signed by the waiving party.  No failure or delay by either the
Company or Manager in exercising any right or remedy under this Agreement will
waive any provision of this Agreement, nor will any single or partial exercise
by either the Company or Manager of any right or remedy under this Agreement
preclude any of them from otherwise or further exercising the rights or remedies
contained herein, or any other rights or remedies granted by any law or any
related document.

    

    (b)           The
Section headings contained herein are for the purpose of convenience only and
are not intended to define or limit the contents of said
Sections.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           This
Agreement shall be deemed to be a contract under the laws of Greece and shall be
construed and enforced in accordance with the laws of said state. Any dispute
under this Agreement shall be determined exclusively by the Courts of Athens.
However, for disputes arising between the Subsidiaries and the Manager, the
choice of law and the jurisdiction are governed by the terms of the
SHIPMAN.

    

    (d)           This
Agreement may be executed in any number of counterparts each of which shall be
deemed an original and all of which, taken together, shall constitute a single
original document.

    

    (e)           It
is understood and agreed among the parties that in rendering services hereunder,
Manager is an independent contractor of the Company and shall not be deemed to
constitute a director, officer or employee of the Company solely in respect of
this Agreement.

    

    (f)           The
Company shall have no obligation to any person entitled to the benefits of this
Agreement with respect to any tax obligation any such person incurs as a result
of or attributable to this Agreement or arising from any payments made or to be
made hereunder or thereunder.

    

    (g)           The
provisions of this Agreement which by their terms call for performance
subsequent to termination of this Agreement shall so survive such
termination.

    

    (h)           This
Agreement may not be transferred, assigned or delegated by any of the parties
hereto without the prior written consent of the other parties
hereto.

    

    (i)           (1)           The
Company hereby confirms to and agrees with Manager with respect to any and all
matters arising out of or in connection with its engagement as a Manager
hereunder, that Manager shall be entitled to receive the benefits of all
indemnification provisions contained in the bylaws of the Company to the fullest
extent permitted by applicable law at the time of the assertion of any liability
against Manager.  Without limiting the generality of the foregoing,
the Company hereby covenants and agrees that Manager shall be entitled to
receive any and all indemnification to which Manager would have been entitled
had it or they acted as an officer or director of the Company, including,
without limitation, such indemnification benefits as may hereafter be extended
or otherwise made available by the Company to its executive
officers.

    

    (2)           Manager
shall cooperate fully with the Company in the prosecution or defense, as the
case may be, of any and all actions, governmental inquiries or other legal
proceedings in which Manager's assistance may be requested by the
Company.  Such cooperation shall include, among other things, making
documents in Manager's custody or control available to the Company or its
counsel, making itself available for interviews by the Company or its counsel,
and making itself available to appear as a witness, at deposition, trial or
otherwise.  Any and all reasonable and necessary vouchered
out-of-pocket expenses incurred by Manager in fulfilling its obligations under
this paragraph 12(i) shall be reimbursed by the Company.

    

    (3)           The
provisions of this Section 12(i) shall survive the termination or expiration of
this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the parties have executed this Management Agreement as of the
date first written above.

    

    Euroseas Ltd.

    

    

    By:  /s/ Aristides J.
Pittas

    Name: Aristides J. Pittas

    Title:   Chairman of
the Board,President, CEO

    

    Eurobulk Ltd.

    

    

    By:  /s/ Nicholaos
Pittas

    Name: Nikolaos Pittas

    Title: Directord882672_ex4-17.htm

    
EXHIBIT
4.17

     

    
 

    DATED:
7th JUNE 2007

     

    MANOLIS
SHIPPING LIMITED

     

    -AND-

     

    EFG
EUROBANK ERGASIAS S.A

     

    
      	
              LOAN
      AGREEMENT

              FOR
      THE AMOUNT OF USD 10,000,000

              M.V
      MANOLIS P

            

    

    

    

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONTENTS

    

    
      	
              CLAUSE

            	 
      	
              PAGE
      NO

            
	 
      	 
      	 
      
	
              1

            	
              PURPOSE,
      DEFINITIONS AND INTERPRETATION

            	
              1

            
	
              2

            	
              DISBURSEMENT

            	
              8

            
	
              3

            	
              CONDITIONS
      PRECEDENT

            	
              9

            
	
              4

            	
              REPRESENTATIONS
      AND WARRANTIES

            	
              10

            
	
              5

            	
              ARRANGEMENT
      FEE

            	
              15

            
	
              6

            	
              EVIDENCE

            	
              15

            
	
              7

            	
              REPAYMENT
      AND PREPAYMENT

            	
              16

            
	
              8

            	
              INTEREST
      AND INTEREST PERIODS

            	
              17

            
	
              9

            	
              THE
      MASTER SWAP AGREEMENT

            	
              19

            
	
              10

            	
              PAYMENTS
      ACCOUNTS & CALCULATIONS

            	
              21

            
	
              11

            	
              UNLAWFULNESS
      AND INCREASED COSTS

            	
              22

            
	
              12

            	
              SECURITY

            	
              23

            
	
              13

            	
              COVENANTS

            	
              24

            
	
              14

            	
              EVENTS
      OF DEFAULT

            	
              29

            
	
              15

            	
              APPLICATION
      OF RECEIPTS

            	
              32

            
	
              16

            	
              ACCOUNTS

            	
              33

            
	
              17

            	
              INDEMNITY

            	
              36

            
	
              18

            	
              REMEDIES
      AND WAIVERS

            	
              37

            
	
              19

            	
              LEGAL
      IMMINENCE

            	
              38

            
	
              20

            	
              COUNTERPARTS

            	
              38

            
	
              21

            	
              INVALIDITY

            	
              38

            
	
              22

            	
              ASSIGNMENT

            	
              38

            
	
              23

            	
              EXPENSES

            	
              39

            
	
              24

            	
              NOTICE

            	
              39

            
	
              25

            	
              GOVERNING
      LAW AND JURISDICTION

            	
              40

            
	 
      	
              SCHEDULE
      I

            	
              41

            
	 
      	
              SCHEDULE
      III

            	
              53

            
	 
      	
              SCHEDULE
      IV

            	
              54

            
	 
      	
              SCHEDULE
      V

            	
              55

            

    

    

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THIS
AGREEMENT is dated the seventh (7th) day of
June two thousand seven and made

     

    BETWEEN

     

    1.           MANOLIS SHIPPING LIMITED being
a company incorporated in accordance with the laws of the Republic of the
Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall
Islands (referred to below as “the Borrower”);
and

     

    2.           EFG EUROBANK ERGASIAS S.A., a
banking societe anonyme duly incorporated under the laws of Greece, having its
registered office at 8, Othonos Street, Athens, Greece, acting for the purposes
of this Agreement through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece
(referred to below as “the
Bank”).

     

    WHEREAS

     

    At
the request of the Borrower, the Bank has agreed to advance to the Borrower a
secured loan facility in the amount of up to United States Dollars ten million
(USD 10,000,000) upon the terms and conditions hereinafter set
forth.

     

    IT IS HEREBY AGREED as
follows:-

     

    1           PURPOSE, DEFINITIONS AND
INTERPRETATION

     

    The
purpose of the Loan shall be to make available to the Borrower a facility in the
amount of United States Dollars ten million (USD 10,000,000) by one (1) advance
for the purpose of financing working capital needs and other corporate purposes
associated with the Vessel (as hereinafter defined)

     

    In
this Agreement unless the context otherwise requires the following terms shall
have the following meanings:

     

    “Advance Ratio” means at any
time the ratio of the Loan to the market value of the Vessel as determined in
accordance with the terms of this Agreement.

     

    “Affiliate” with respect to
any person at any time, means any entity directly or indirectly controlling,
controlled by or under common control with that person at that time. For
purposes of this definition, “person” means any individual or legal entity or
union of individuals, “control” means the power to direct the management and
policies of an entity, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and “controlling” and “controlled”
have correlative meanings.

     

    “Agreed Rate” means a rate
agreed between the Bank and the Borrower on the basis of which (instead of
LIBOR) the interest rate is determined pursuant to Clause 8.1.
hereof

     

    “Agreement” means this
Loan Agreement and the documents referred to in Clause 12 hereof as well as
every other document from time to time executed to secure the
Indebtedness.

     

    “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).

     

    “Applicable Interest Rate”
means the rate of Interest based on LIBOR as determined in Clause 8.1.
hereof.

     

    “Arrangement Fee” means the
fee to be paid by the Borrower to the Bank pursuant to Clause 5
hereof.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

     

    “Bank” means EFG EUROBANK
ERGASIAS S.A., a banking societe anonyme duly incorporated under the laws of
Greece, having its registered office at 8, Othonos Street, Athens, Greece,
acting for the purposes of this Agreement through its office at 83, Akti
Miaouli, 185 38 Piraeus, Greece or through any other branch notified to the
Borrower from time to time pursuant to Clause 24 and its successors and
assignees and transferees.

     

    “Banking Day” means a day on
which banks in New York, London, Athens and Piraeus are open for business.
However in respect of a day on which a payment in Dollars is required to be made
hereunder to the Bank, Banking Day shall mean a day on which dealings in
deposits in Dollars are carried on in the London Interbank Market and on which
banks are open for business in London, and New York City.

     

    “Borrower” means Manolis
Shipping Limited a company duly incorporated under the laws of the Republic of
the Marshall Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of
Marshall Islands.

     

    “Break Costs” means all costs,
liability or loss including a loss of prospective profit, premiums or penalties
incurred by the Bank in the circumstances contemplated by Clause 17.1., or as a
result of it receiving any prepayment of all or any part of the Loan (whether
pursuant to Clause 7 or otherwise), or any other payment under or in relation to
the Security Documents on a day other than the due date for payment of the sum
in question, and includes (without limitation) any losses or costs incurred in
liquidating or re-employing deposits from third parties acquired to effect or
maintain the Loan, and any liabilities, expenses or losses incurred by the Bank
in terminating or reversing, or otherwise in connection with, any Transaction or
any other interest rate transaction or arrangement entered into by any Bank to
hedge any exposure arising under this Agreement, or in terminating or reversing,
or otherwise in connection with, any open position arising under this
Agreement.

     

    “Commitment” means the
aggregate principal amount which the Bank has agreed to lend to the Borrower
hereunder as reduced by any relevant term of this Agreement

     

    “Company” means Eurobulk Ltd.
of Liberia, as the company responsible for the Vessel’s compliance with the ISM
Code pursuant to paragraph 1.1.2 of the ISM Code.

     

    “Confirmation” means a
Confirmation exchanged, or deemed exchanged, between the Bank and the Borrower
as contemplated by the Master Swap Agreement.

     

    “Corporate Guarantee” means
the corporate guarantee referred to in Clause 12.1.(c) hereof

     

    “Corporate Guarantor” means
Euroseas Ltd., a company duly incorporated under the laws of the Republic of the
Marshall Islands whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall
Islands or any other legal entity(ies) nominated by the Borrower and accepted by
the Bank which have, or as the context may require, shall or may at any time
guarantee the obligations of the Borrower under this Agreement and/or those of
the other Security Parties to the Bank.

     

    “Credit Support Document”
means any document described as such in the Master Swap 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
Bank.

     

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

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

     

    “Default Rate” means the rate
of Interest per annum determined in accordance with the provisions of Clause 8.4
hereof.

     

    “Designated Transaction(s)”
means a Transaction which fulfils the following
requirements:

     

    
      	
               
      

            	
              A.

            	
              It
      is entered by the Borrower at its request and subject to the Bank’s
      consent pursuant to the Master Swap Agreement with the
    Bank;

            

    

     

    
      	
               
      

            	
              B.

            	
              It
      is designated by the Borrower, by delivery by the Borrower to the Bank of
      a notice of designation in the form set out in Schedule V as a Designated
      Transaction for the purposes of the Security Documents;
  and

            

    

     

    
      	
               
      

            	
              C.

            	
              Its
      purpose is to provide interest and/ or currency swaps or any other
      transaction to hedge any exposure of the Borrower under the Agreement for
      a period expiring not later that the final Repayment
  Date.

            

    

     

    “Dollars” and “$” means the
lawful currency of the United States of America and in respect of all payments
to be made hereunder or under any of the Security Documents means funds which
are for same day settlement in the New York Clearing House InterBank Payments
System (or such other same day Dollar funds as the Bank may determine to be
customary for the settlement of international Banking transactions denominated
in Dollars).

     

    “Drawdown Date” means the date
being a Banking Day falling not later than the Latest Permissible Drawdown Date
on which the Commitment is advanced or, as the context may require, is to be
advanced to the Borrower.

     

    “Drawdown Notice” means a
notice substantially in the form set out in the Schedule III attached
hereto.

     

    “Earnings” means all earnings
of the Vessel whatsoever, due or to become due to or for the account of the
Borrower at any time during the period commencing on the Drawdown Date and
terminating on the date upon which all moneys payable or to become payable under
any of the Security Documents shall have been paid and discharged in full,
including all freight, hire and passage moneys, compensation payable to the
Borrower in the event of requisition of the Vessel for hire, remuneration for
salvage and towage services, demurrage and detention moneys, contributions of
any nature whatsoever in respect of general average, damages for breach (or
payments for variation or termination) of any charterparty or other contract for
employment of the Vessel as well as all and any sums recoverable under all the
insurances of the Vessel including the insurances in respect of loss of Earnings
and/or any other losses and/or liabilities of the Borrower in respect of the
Vessel.

     

    “Environmental Affiliate”
means any person having a contractual relationship with any of the
Borrower or any other Relevant Party in connection with any Relevant Ship or its
operation, or the carriage of cargo and/or passengers thereon and/or the
provision of goods and/or services on or from the Relevant Ship.

     

    “Environmental Approval” means
any approval, licence, permit, exemption, or authorisation applicable on any
Relevant Ship under any applicable Environmental Law.

     

    “Environmental Claim” means
any and all enforcement, clean up, removal or other governmental or regulatory
actions or orders pursuant to any Environmental Law or Environmental Approval
together with claims made by any third party relating to damage, contribution,
loss or injury, resulting from

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    any
actual or threatened emission, spill, release or discharge of a Material of
Environmental concern from any Relevant Ship

     

    “Environmental Law” means all
laws regulations conventions and agreements whatsoever applicable to any
Relevant Ship relating to pollution or protection of the human health or the
environment including without limitation the carriage of Materials of
Environmental concern and actual or threatened emissions, spills, releases or
discharges of Materials of Environmental concern

     

    “Event of Default” or “Default”
means any of those events specified in Clause 14 hereof or in any of the
Security Documents.

     

    “Expenses” means the aggregate
at any relevant time (to the extent that the same have not been received or
recovered by the Bank) of:

     

    
      	
              (a)

            	
              all
      losses, liabilities, costs, charges, expenses, damages and outgoings of
      whatever nature, (including, without limitation, taxes, repair costs, fees
      of Bank Advisors and/or Consultants, registration fees and insurance
      premiums, crew wages, repatriation expenses and seamen’s pension fund
      dues) suffered, incurred, charged to or paid or committed to be paid by
      the Bank in connection with the exercise of the powers referred to in or
      granted by any of the Security Documents or otherwise payable by the
      Borrower or any of them in accordance with the terms of any of the
      Security Documents;

            

    

     

    
      	
              (b)

            	
              the
      expenses referred to in Clause 23.

            

    

     

    
      	
              (c)

            	
              interest
      on all such losses, liabilities, costs, charges, expenses, damages and
      outgoings from the date on which the same were suffered, incurred or paid
      by the Bank until the date of receipt or recovery thereof at a rate per
      annum calculated in accordance with Clause
8.4.

            

    

     

     

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

     

    “Flag State” means the
Republic of Marshall Islands or such other state or territory acceptable to the
Bank under which the Vessel will be and remain registered throughout the
Facility Period as the “Flag
State” of the Vessel for the purposes of the Security
Documents.

     

     “General Assignment”
means the general assignment of all insurances, earnings, and requisition
compensation of the Vessel referred to in Clause 12.1.(e) hereof.

     

    “Guarantor” means the Corporate
Guarantor.

     

    “Group” means the Borrower, the
other Security Parties and all other entities and/or businesses substantially
owned and/or controlled by and/or managed by the same person(s).

     

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

     

    “Indebtedness” means the Loan;
any Swap Exposure; all other sums of any nature (together with all interest on
any of those sums) which from time to time may be payable by the Borrower to the
Bank pursuant to the Security Documents; any damages payable as a result of any
breach by the Borrower of any of the Security Documents; and any damages or
other sums payable as a result of any of the obligations of the Borrower under
or pursuant to any of the Security Documents being disclaimed by a liquidator or
any other person, or, where the context permits, the amount thereof for the time
being outstanding.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

    “Interest Payment Date” means
in respect of the Loan or of any part thereof, in respect of which a separate
Interest Period is fixed, the last day of the relevant Interest Period and in
case of any Interest Period which overruns three (3) months, the last day of
each such three (3) month period(s).

     

    “Interest Period” means any
period for the calculation of interest in respect of the Loan determined
pursuant to Clauses 8.2. hereof.

     

    “ISM Code” means the
International Safety Management Code (including the gu delines on its
implementation), adopted by the International Maritime Organization Assembly as
Resolutions A. 741(18) and A. 788 (19), as the same may be amended or
supplemented from time to time. The terms “Safety Management System”, “Safety
Management Certificate”, “Document of Compliance” and “Major Non-Conformity”
shall have the same meanings as are given to them in the ISM Code.

     

    “ISPS Code” means the
International Code for the Security of Ships and of Port Facilities (including
Appendixes) adopted by one of the resolutions that were adopted on 12 December
2002 by the Conference of Contracting Governments to the International
Convention for the Safety of Life at Sea 1974 (London, 9 to 13 December 2002) as
the same may be amended or supplemented from time to time.

     

    “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.

     

    “Latest Permissible Drawdown Date”
means the 15th June
2007 being the latest date for drawdown of the Loan pursuant to Clause 2 hereof
or such later date as the Bank may agree in writing.

     

    “LIBOR” means, for an Interest
Period the rate, rounded to the nearest four decimal places downwards (if the
digit displayed in the fifth decimal place is 1,2,3 or 4) or upwards (if the
digit displayed in the fifth decimal place is 5,6,7,8 or 9) displayed as the
British Bankers’ Association Interest Settlement Rate (or such other rate as may
replace it at any time during the Facility Period) on any information service
selected by the Bank on which that rate is displayed, for deposits in the
Currency of Account for a period equal in length to the relevant Interest
Period, or (if the Bank is for any reason unable Ito ascertain that rate) the
rate, rounded (unless the Borrower shall have entered into an interest rate swap
or other instrument with the Bank for the purpose of hedging all or any part of
the Borrower’s interest rate risk under this Agreement, in which event no
rounding shall apply) upwards to the nearest whole multiple of one-sixteenth of
one per centum, at which deposits in the Currency of Account of amounts
comparable to the amount of the Facility (or any relevant part of the Facility)
are offered to the Bank for a period equal in length to the relevant Interest
Period.

     

    “Loan” means the aggregate
principal amount owing to the Bank hereunder at any time.

     

    “Manager” means Eurobulk Ltd.
of the Republic of Liberia, established in Greece under law 89/67, 378/68, 27/75
and 814/78 as amended by law 2234/94 with a branch office in Greece at 40, Agiou
Konstantinou Str., Aethrion, Maroussi, Greece or any other legal entity
nominated by the Borrower as the Manager of the Vessel and accepted by the Bank
and includes its successors in title.

     

    “Manager’s Undertaking” means
the manager’s undertaking referred to in Clause 12.1.(i) hereof.

     

    “Margin” means as the case may
be:

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (i)

            	
              zero
      point ninety per cent (0.90%) per annum as long as the Advance Ratio is
      greater than or equal to 55% of the Loan (“Margin A”);
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              zero
      point eighty percent (0.80%) per annum, as long as the Advance Ratio is
      less than 55% of the Loan (“Margin B”)
      .

            

    

     

    “Master Agreement Security Deed”
means the security deed executed or (as the context may require) to be
executed by the Borrower in favour of the Bank as a condition precedent to the
execution of the Master Swap Agreement, such deed to be in a form acceptable to
the Bank in its absolute discretion;

     

    “Master Swap Agreement” means
the master swap agreement (on the 1992 ISDA (Multicurrency-Crossborder) form)
and the schedule collateral thereto dated the same date as this Agreement and
entered into between the Borrower and the Bank and include all Designated
Transactions from time to time entered into and Confirmations of Designation
Transactions from time to time exchanged under the said master swap
agreement.

     

    “Material Adverse Effect”
means a material adverse effect on the Borrower’s ability to meet its
obligations to the Bank under any of the Security Documents.

     

    “Material of Environmental Concern”
means any object or material which may cause environmental damage,
including pollutants, contaminants, toxic substances, oil as defined in the
United States Oil Pollution Act of 1990 and all hazardous substances as defined
in the United States Comprehensive Environmental Response, Compensation and
Liability Act 1988

     

    “Minimum Value” means, at any
time, an amount equal at least to a percentage of one hundred twenty (120%) of
the Loan and the Swap Exposure.

     

    “Month” means a period
beginning in one calendar month and ending in the next calendar month on the day
numerically corresponding to the day of the calendar month on which it started,
provided that (i) if there is no such numerically corresponding day, it shall
end on the last Banking Day of such next calendar month and (ii) if such
numerically corresponding day is not a Banking Day, the period shall end on the
next following Banking Day of such next calendar month but if there is no such
Banking Day it shall end on the preceding Banking Day and “months” and “monthly”
shall be construed accordingly;

     

    “Mortgage” means the first
preferred Marshall Islands mortgage referred to in Clause 12.1 .(d)
hereof.

     

    “Net Worth” means the value of
the total assets minus total liabilities, as expressed in the financial
statements.

     

    “Notional Amount”, in respect
of any Designated Transaction, means the Notional Amount as defined in the
Confirmation relating to that Designated Transaction.

     

    “Operating Account” means each
one of them individually and/or collectively of the account(s) opened or to be
opened by the Borrower with the Bank as per Clause 16.3 hereof.

     

    “Pledges”
means:

     

    
      	
              (a)

            	
              a
      pledge agreement(s) creating security in respect of the Operating Account
      to be held with the Bank in the name of the Borrower and/or in the name of
      the Corporate Guarantor in respect of the Vessel (the “Operating Account Pledge(s)”);
      and

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    
      	
              (b)

            	
              a
      pledge agreement creating security in respect of the Retention Account to
      be held with the Bank in the name of the Borrower (the “Retention Account
      Pledge”);

            

    

     

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

     

    “Relevant Jurisdiction” means
any jurisdiction in which or where any Security Party “Repayment Instalment"
means each instalment payable pursuant to Clause 7 hereof.is incorporated,
resident, domiciled, has a permanent establishment, carries on, or has a place
of business or is otherwise effectively connected;

     

    “Relevant Party” means the
Borrower and/or any other party being a member of the Group.

     

    “Relevant Ship” means the
Vessel and any other vessels from time to time owned by, managed by, crewed by
or chartered to any Relevant Party (whether before or after the dale of this
Agreement).

     

    “Repayment Dates” means each
of the dates for the payment of the Repayment Instalment sums falling at three
monthly intervals, the first Repayment Date to occur three (3) months after the
Drawdown Date and each of the subsequent Repayment Dates to occur at consecutive
intervals of three (3) months thereafter pursuant to Clause 7
hereof.

     

    “Repayment Instalment” means
each instalment payable pursuant to Clause 7 hereof.

     

    “Retention Account” means the
account opened or to be opened by the Borrower with the Bank as per Clause 16.4
of this Agreement

     

    “Security Documents” means
this Agreement, the documents referred to in Clause 12 hereof and any other
document from time to time executed to secure the Indebtedness.

     

    “Security Party” means the
Borrower and any person (other than the Bank) which is or will become a party to
any of the Security Documents.

     

    “Specific Assignment” means
the specific assignment of the benefit of any charterparty of the Vessel of more
that twelve (12) months’ duration and respective notices and acknowledgments
thereof Clause 12.1.(f) hereof.

     

    “Subsidiary” at any time, means
any entity of which more than fifty percent (50%) of the outstanding voting
stock or other equity interest entitled ordinarily to vote in the election of
the directors or other governing body (however designated) of that entity is at
the time beneficially owned or controlled directly or indirectly by the
Borrower, by one or more such entities or by the Borrower and one or more such
entities.

     

    “Swap Exposure” means, as at
any relevant date, the amount certified by the Bank to be the aggregate net
amount in Dollars which would be payable by the Borrower to the Bank under (and
calculated in accordance with Section 6(e) (Payments on Early Termination) of
the Master Swap Agreement if an Early Termination Date had occurred on the
relevant date in relation to all continuing Designated
Transactions.

     

    “Taxes” includes all present
and future taxes and all stamp and other taxes and levies, imposts, deductions,
duties, charges and withholdings whatsoever and public charges in general
together with interest thereon fines and penalties with respect thereto, if any,
(except taxes on the net income of the Bank imposed in the jurisdiction in which
its principal or its lending office is located) and charges, fees or other
amounts made on or in respect thereof.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    “Total Loss” means (a),
actual, constructive, compromised or arranged total loss of the Vessel; or (b)
compulsory acquisition, or capture, seizure, or confiscation of the Vessel by
any government or person acting or purporting to act on behalf of any government
or, (c) arrest, blockade, detention or simple loss of the Vessel’s possession or
use because of any other reason. For the purpose of this Agreement a Total Loss
shall be deemed to have occurred:

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

            	
              in
      the case of constructive on compromised or arranged total loss at the date
      and time notice of abandonment of the Vessel is given to its
      insurers;

            

    

     

    
      
        	
                (c)

              	
                in
      the case of capture, seizure, confiscation or compulsory acquisition on
      the date of such occurrence, unless it is reasonably expected that the
      Vessel will be soon restored absolutely free to its Owner always provided
      however that in fact it will be so restored within forty (40) days
      thereafter at the latest.

              

      

             

    

    
      	
              (d)

            	
              in
      the case of detention, arrest, blockade or loss of the Vessel’s possession
      and/or use because of any reason whatsoever forty (40) days from the date
      of such occurrence, unless it is reasonably expected that the Vessel will
      be soon restored absolutely free to its Owner, always provided however
      that in fact it will be so restored within forty (40) days thereafter at
      the latest.

            

    

     

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

     

    “Vessel” means m.v “MANOLIS P.”
built in 1995 in Germany, being of 14962 tons gross 7579 tons net, currently
registered under the flag of Marshall Islands with Official Number 2849 and
International Call Letters V7MF5 in the name of the Borrower.

     

    In
this Agreement

     

    
      	
              (a)

            	
              unless
      the context otherwise requires, words denoting the singular number shall
      include the plural and vice versa;

            

    

    
      	
              (b)

            	
              references
      to persons include bodies corporate, bodies unincorporate and
      individuals.

            

    

    
      	
              (c)

            	
              references
      to assets include property, rights and assets of every
      description;

            

    

    
      	
              (d)

            	
              references
      to any document are to be construed as references to such document as
      amended or supplemented from time to time;
and

            

    

    
      	
              (e)

            	
              references
      to any enactment include re-enactments, amendments and extensions
      thereof.

            

    

     

    2           DISBURSEMENT

     

    2.1        Amount

     

    Subject
to the terms and conditions of the Security Documents and to the satisfaction of
all conditions precedent and in reliance on the representations and warranties
made in or in accordance with them the Bank agrees to make available to the
Borrower a facility in the amount of up to United States Dollars ten million
(USD 10,000,000) for the purposes described in Clause 1.

     

    2.2        Drawdown

     

    Subject
to the terms and conditions of this Agreement the Commitment shall be made
available to the Borrower following receipt by the Bank from the Borrower
of:

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    
      	
              (a)

            	
              a
      Drawdown Notice in the form set out in Schedule III not later than 10 a.m.
      two (2) Banking Days before the proposed Drawdown Date of the
      Commitment.

            

    

     

    
      	
              (b)

            	
              confirmation
      of the terms of proposed Insurances (as defined in the Schedule II) and
      notification of the identities and of the names of the insurers and of the
      proposed Classification Society not later than 10 a.m. before the proposed
      Drawdown Date.

            

    

     

    
      	
              (c)

            	
              the
      documents and evidences referred to in Schedule I (Conditions
      Precedent).

            

    

     

    The
giving of the Drawdown Notice shall constitute the Borrower’s irrevocable
commitment to borrow the amount referred to therein.

     

    2.3        Termination
of Commitment

     

    Any
part of the Commitment remaining undrawn at the end of the Latest Permissible
Drawdown Date shall thereupon be automatically cancelled.

     

    2.4        Number
of Advances

     

    The
Commitment shall be advanced to the Borrower in full one amount on the Drawdown
Date.

     

    3          CONDITIONS
PRECEDENT

     

    3.1       Corporate
Documents and Evidences.

     

    The
obligation of the Bank to make the Commitment available shall be subject to the
condition that:

     

    
      	
              (a)

            	
              the
      Bank shall have received, not later than four Banking Days before the day
      on which the Drawdown Notice for the Commitment is given, the documents
      and evidence specified in Part 1 of Schedule I in form and substance
      satisfactory to the Bank;

            

    

     

    
      	
              (b)

            	
              the
      Bank shall have received, not later than four Banking Days before the day
      on which the Drawdown Notice for the Commitment is given, or when this is
      not possible, simultaneously with such Drawdown, the documents and
      evidence specified in Part 2 of Schedule I in form and substance
      satisfactory to the Bank;

            

    

     

    3.2        Continuing
conditions precedent.

     

    The
obligation of the Bank to advance the Commitment, is subject to the further
condition that at the time of giving a Drawdown Notice and on advancing the
Commitment no Event of Default has occurred or is about to occur and be
continuing. Also that the Arrangement Fee have been received by the Bank in
accordance with the provisions of Clause 5 hereof.

     

    3.3        General
Conditions

     

    The
obligation of the Bank to advance the Commitment shall be subject to the further
condition that there has been no material adverse change in the financial
condition and operation of the Security Parties or in their ability to perform
their obligations under the Security Documents to which they are a party or a
material adverse change of circumstances and that the Bank at the time of
receiving a Drawdown Notice in respect of the Commitment shall have
received:

     

    
      	
              (a)

            	
              Confirmations
      from Insurance Brokers and Club Managers that the Vessel is fully insured
      in accordance with the requirements in clause 4.3. (f) and that the Bank’s
      interest as Mortgagee is duly
noted.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              The
      Security Documents duly executed and when appropriate duly
      registered

            

    

     

    with
the appropriate registry.

    
      	
              (c)

            	
              Evidence
      that the Operating Account for the Vessel has been duly opened and all
      mandate forms, signature cards and authorities have been duly executed and
      delivered to the Bank.

            

    

     

    
      	
              (d)

            	
              Copy
      of any charterparty or other contract of employment of the Vessel in
      question which will be in force on the Drawdown
  Date;

            

    

     

    3.4       Further
Documents

     

    The
Bank may from time to time request and the Borrower shall, within the period
specified by the Bank, deliver to the Bank such further documents certificates
and/or opinions as requested at the sole discretion of the Bank.

     

    3.5       Waiver
of conditions precedent

     

    The
conditions specified in this Clause 3 are inserted solely for the benefit of the
Bank. In case any conditions precedent have not been fulfilled prior to the
Drawdown, the Bank may at its option, without prejudice to its right not to make
available the Commitment and/or to terminate same, grant to the Borrower a few
days period to fulfill such missing conditions precedent.

     

    4           REPRESENTATIONS AND
WARRANTIES

     

    4.1        Continuing
representations and warranties

     

    The
Borrower represents and warrants to the Bank that:

     

    
      	
              (a)

            	
              Due
      incorporation.

            

    

     

    each
of the corporate Security Parties is duly incorporated and validly existing in
good standing under the laws of its Relevant Jurisdiction and has power to carry
on its business as it is now being conducted and to own its property and other
assets;

     

    
      	
              (b)

            	
              Corporate
      power

            

    

     

    the
Borrower has power to borrow the Commitment under this Agreement, to enter into
Designated Transactions under the Master Swap Agreement and to make all the
payments contemplated by, and to comply with, those Finance Documents to which
the Borrower is a party and the Master Swap Agreement and the Borrower and any
of the other Security Parties has power to execute and deliver and perform its
obligations under the Security Documents to which it is or is to be a party; all
necessary corporate, shareholder and other action has been taken to authorise
the execution, delivery and performance of the same

     

    
      	
              (c)

            	
              Binding
      obligations

            

    

     

    the
Security Documents constitute or will, when executed, constitute valid and
legally binding obligations of the relevant Security Parties enforceable in
accordance with their respective terms;

     

    
      	
              (d)

            	
              No conflict with other
      obligations

            

    

     

    the
execution and delivery of, the performance of their obligations under, and
compliance with the provisions of the Security Documents by the relevant
Security Parties will not (i) contravene any existing applicable law, statute,
rule or regulation or any judgment, decree or permit to which any of the
Security Parties is subject, (ii) conflict with, or result in any
breach

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    of
any of the terms of, or constitute a default under, any agreement or other
instrument to which any of the Security Parties is a party or is subject or by
which it or any of its property is bound.

     

    
      	
              (e)

            	
              No
      litigation

            

    

     

    there
are no claims or actions pending or to the knowledge of any officer of the
Security Parties, threatened and no litigation, arbitration or administrative
proceeding is taking place, pending or, to the knowledge of any officer of the
Security Parties, is threatened against any of such Security Parties or any of
their Affiliates and/or Subsidiaries, which, if adversely determined could have
a material adverse effect on the business, assets or financial condition of
them, or could affect the validity or enforceability of any of the Security
Documents.

     

    
      	
              (f)

            	
              No filings
      required

            

    

     

    save
for the registration of the Mortgage under the laws of the Flag State, it is not
necessary to ensure the legality, validity, enforceability or admissibility in
evidence of any of the Security Documents, that they or any other instrument be
notarised, filed, registered or enrolled in any court, public office or
elsewhere or that any tax be paid in any Relevant Jurisdiction on or in relation
to the Security Documents and/or to their enforcement.

     

    
      	
              (g)

            	
              Choice of
      law

            

    

     

    the
choice of English law to govern the Security Documents, except the Mortgage
which is governed by the law of the flag of the Vessel, the Pledges and the
Corporate Guarantee which is governed by the laws of Greece and the submission
by the Security Parties to the nonexclusive jurisdiction of the English Courts
and/or Piraeus Courts are valid and binding;

     

    
      	
              (h)

            	
              No
    immunity

            

    

     

    none
of the Security Parties is entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceeding (which shall include, without
limitation, suit, attachment prior to judgment, execution or other enforcement)
and in case any such immunity will be granted to them the Security Parties
concerned will unreservedly waive as against the Bank all their respective
rights and/or entitlement to such immunity.

     

    
      	
              (i)

            	
              Consents
      obtained

            

    

     

    every
consent, licence or approval of, or registration with or declaration to, public
bodies or authorities or courts required by any Security Party in connection
with the execution, delivery, validity, enforceability or admissibility in
evidence of each of the Security Documents or the performance by each Security
Party of its obligations under the Security Documents has been obtained or made
and is in full force and effect;

     

    
      	
              (j)

            	
              Financial
      statements

            

    

     

    The
financial statements of the Security Parties which have been or will be
delivered to the Bank are complete and accurate, have been prepared in
accordance with generally accepted principles of good accounting practice and
fairly present the financial condition of the Security Parties as at the date
thereof and the results of their operations.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    
      	
              (k)

            	
              No adverse
      changes

            

    

     

    There
has been no material adverse change in the financial condition of the Security
Parties or in their ability to perform their obligations under the Security
Documents since the date of the above financial statements.

     

    4.2       Further
Representations and Warranties

     

    The
Borrower further represents and warrants to the Bank that:

     

    
      	
              (a)

            	
              No default under any
      Indebtedness

            

    

     

    none
of the Security Parties nor any of their Subsidiaries and/or Affiliates are (nor
would with the giving of notice or lapse of time or the satisfaction of any
other condition be) in breach of or in default under the present or any other
agreement relating to indebtedness to which they are a party or by which they
may be bound;

     

    
      	
              (b)

            	
              Information

            

    

     

    the
information, exhibits and reports furnished by any Security Party to the Bank
are true and accurate in all material respects, do not omit material facts and
all reasonable enquiries have been made to verify the facts and statements
contained therein;

     

    
      	
              (c)

            	
              No
  Taxes

            

    

     

    no
Taxes e.t.c. are imposed by withholding or otherwise on any payment to be made
by any Security Party under the Security Documents or are imposed on or by
virtue of the execution or delivery by the Security Parties of the Security
Documents or any other document or instrument to be executed or delivered under
any of the Security Documents;

     

    4.3       Representations
concerning the Vessel

     

    
      	
              (a)

            	
              The
      Borrower (is and) will be during the life of this Agreement the sole legal
      owner of Vessel.

            

    

     

    
      	
              (b)

            	
              The
      Vessel will conform to existing international regulations, and will be
      registered as Ships under the laws and flag of the Flag
    State.

            

    

     

    
      	
              (c)

            	
              The
      Vessel is and will be during the life of this Agreement operationally
      seaworthy and in every way fit for service. The Vessel is and will always
      continue to be classed in the highest class with a Classification Society
      member of IACS and approved by the Bank free of all recommendations
      notations or average damage affecting class and will be insured in
      accordance with the provisions of this
  Agreement.

            

    

     

    
      	
              (d)

            	
              The
      Vessel will on the drawdown of the Commitment be subject to no charter or
      contract of affreightment nor to any agreement to enter into any charter
      or contract other than disclosed to the
Bank.

            

    

     

    
      	
              (e)

            	
              Neither
      the Vessel, nor the Earnings, or Insurances nor any part thereof will, on
      the drawdown of the Commitment, or thereafter during the course of this
      Agreement, be subject to any encumbrances other than encumbrances in
      favour of the Bank, neither to any participation entitlement of any other
      except the Borrower.

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

     

    
      	
              (f)

            	
              The
      Borrower shall keep the Vessel insured at all times during the Loan
      period, while navigating or in port, to the Bank’s full satisfaction. All
      insurances shall be in form and substance satisfactory to the Bank and
      with Underwriters acceptable to it in accordance with the provisions of
      Schedule II and shall include as a
minimum:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Hull
      and Machinery (disbursements and/or an increased value sum insured) for an
      amount not less than 120% of the aggregate amount of the Loan and the Swap
      Exposure.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              War
      Risks for the above amount.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Protection
      and Indemnity (with Excess Liability Insurance for Oil Pollution and FD
      and D cover).

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Mortgagee’s
      Interest Insurance (MII) to be effected and maintained by the Bank at
      Borrower’s expense for an amount not less than 120% of the aggregate
      amount of the Loan and the Swap
Exposure.

            

    

     

    
      	
               
      

            	
              (v)

            	
              Mortgagee’s
      Additional Perils (Pollution) (MAPI) (if required by the Bank at its sole
      discretion) to be effected and maintained by the Bank on account of the
      Bank at Borrower’s expense for an amount not less than 120% of the
      aggregate amount of the Loan and the Swap
  Exposure.

            

    

     

    
      	
              (g)

            	
              The
      Vessel will on the Drawdown Date of the Commitment be in the absolute
      ownership of the Borrower.

            

    

     

    
      	
              (h)

            	
              There
      are and there will be no commissions, rebates, premiums or other
      repayments by or to or on account of the Borrower, any other Security
      Party other than as disclosed to the Bank by the Borrower in
      writing.

            

    

     

    4.4       (a)
Compliance with Environmental Laws and Approvals

     

    except
as may already have been disclosed by the Borrower arid acknowledged in writing
by the Bank:

     

    
      	
               
      

            	
              (i)

            	
              the
      Borrower, the Corporate Guarantor and the other Relevant Parties and to
      the best of the Borrower’s knowledge and belief their respective
      Environmental Affiliates have complied, and will comply during the tenure
      of this Agreement with the provisions of all Environmental Laws applicable
      at any area the Vessel is sailing in or anchored
  at.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Borrower, the Corporate Guarantor and the other Relevant Parties and to
      the best of the Borrower’s knowledge and belief their respective
      Environmental Affiliates have obtained all Environmental Approvals and are
      and will be during the tenure of this Agreement in compliance with all
      such Environmental Approvals; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              neither
      the Borrower, nor the Corporate Guarantor, nor any other Relevant Party
      nor to the best of the Borrower’s knowledge and belief any of their
      respective Environmental Affiliates has received notice of any
      Environmental Claim that the Borrower or any other Relevant Party or any
      such Environmental Affiliate is not in compliance with any Environmental
      Law or any Environmental Approval;

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

     

    
      	
              (b)

            	
              No Environmental
      Claims

            

    

     

    except
as may already have been disclosed by the Borrower and acknowledged in writing
by the Bank, there is no Environmental Claim pending or, to the best of the
Borrower’s knowledge and belief, threatened against the Borrower or the Vessel
or any other Relevant Party or any other Relevant Ship or to the best of the
Borrower’s knowledge and belief any of their respective Environmental
Affiliates;

     

    
      	
              (c)

            	
              The
      Borrower shall not trade within any area if it does not comply with all
      Environmental Laws applicable in that area, and that it shall require that
      none of their Environmental Affiliates trade within any area if the
      Environmental Affiliate cannot or does not comply with all Environmental
      Laws applicable in that area which relate to the Vessel or its operation
      or its carriage of cargo;

            

    

     

    
      	
              (d)

            	
              The
      Borrower upon the request of the Bank, conduct and complete all reasonably
      necessary investigations, studies, sampling, audits and testing required
      in connection with any known (or threatened) Release of Materials of
      Environmental Concern which would have a Material Adverse Effect;
      and

            

    

     

    
      	
              (e)

            	
              The
      Borrower shall, promptly upon the occurrence of any of the following
      events, provide to the Bank a certificate specifying in detail the nature
      of such event and the proposed response of the Borrower or the
      Environmental Affiliate concerned:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      receipt by the Borrower or any Environmental Affiliate of any
      Environmental Claim which would have a Material Adverse Effect;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      (or any threatened) Release of Materials of Environmental Concern which
      would have a Material Adverse
Effect,

            

    

     

    and
upon the written request by the Bank, the Borrower shall submit to the Bank, at
reasonable intervals, a report updating the status of any occurrence of an
Environmental Claim or a Release of Materials of Environmental Concern, which
would have a Material Adverse Effect.

     

    4.5        ISM
Code

     

    As
regards the Vessel, the Borrower shall:

     

    
      	
              (a)

            	
              at
      all times comply, and be responsible for compliance by itself and by the
      Vessel, with the ISM Code;

            

    

     

    
      	
              (b)

            	
              at
      all times ensure that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Vessel has a valid Safety Management
  Certificate;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Vessel is subject to a safety management system which complies with the
      ISM Code; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              it
      has a valid Document of Compliance on board the Vessel to which the
      Documents of Compliance relates,

            

    

     

    and
shall deliver to the Bank a copy of a valid Safety Management Certificate and a
valid Document of Compliance in respect of the Vessel in each case duly
certified by an officer of the Borrower;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

     

    
      	
              (c)

            	
              promptly
      notify the Bank of any actual or threatened withdrawal of an applicable
      Safety Management Certificate or Document of
  Compliance;

            

    

     

    
      	
              (d)

            	
              promptly
      notify the Bank of the identity of the person ashore designated for the
      purposes of paragraph 4 of the ISM Code and of any change in the identity
      of that person; and

            

    

     

    
      	
              (e)

            	
              promptly
      notify the Bank of the occurrence of any accident or major
      non­conformity requiring action under the ISM
  Code.

            

    

     

    4.6       ISPS
Code

     

    As
regards the Vessel, the Borrower shall:

     

    
      	
              (a)

            	
              at
      all times comply, and be responsible for compliance by the Vessel with the
      ISPS Code;

            

    

     

    
      	
              (b)

            	
              at
      all times ensure that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Vessel has a valid Ship Security
Certificate;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Vessel is subject to a security system and any associated security
      equipment of the Vessel which comply with the ISPS Code;
    and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              it
      has an approved Ship Security Plan on board the
  Vessel

            

    

     

    and
shall deliver to the Bank a copy of a valid Ship Security Certificate in respect
of the Vessel duly certified by an officer of the Borrower;

     

    4.7       Annex
VI

     

     

    As
regards the Vessel,the Borrower shall:

    
      	
              (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)

            	
              obtain,
      following its drydocking in 2008, and maintain thereafter a valid and
      current IAPPC for the Vessel throughout the Facility Period and provide a
      copy to the Bank; and

            

    

     

    
      	
              (c)

            	
              immediately
      notify the Bank in writing of any actual or threatened withdrawal,
      suspension, cancellation or modification of the IAPPC of the
      Vessel.

            

    

     

    4.8       Repetition
of representations and warranties

     

    On
the Drawdown Date and on each Interest Payment Date the Borrower unless it
states otherwise in writing to the Bank, shall be deemed to further represent
and warrant to the Bank (a) that the then latest audited and/or not audited (as
the case may be) financial statements delivered to the Bank have been prepared
in accordance with generally accepted accounting principles and practices which
have been consistently applied and present fairly and accurately the financial
position of the Borrower and the Corporate Guarantor as at the end of the
financial period to which the same relate and the results of their operations
and, as at the end of such financial period, the Borrower and the Corporate
Guarantor did not have any significant liabilities (contingent or otherwise) or
any unrealised or anticipated losses which are not disclosed by, or reserved
against or provided for in, such financial statements and (b) that the
representations and warranties contained in Clauses 4.1. to 4.6. are true
and

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    correct
on and as of the Drawdown Date and on each Interest Payment Date, as if each
representation and warranty was made at such time.

     

    5           ARRANGEMENT
FEE

     

    5.1       Arrangement
Fee

     

    The
Borrower shall pay to the Bank a non-refundable Arrangement Fee in the amount of
United States Dollars forty thousand (USD 40,000), payable on the Drawdown Date
of the Loan.

     

    5.2       The
Arrangement Fee shall be payable to the Bank whether or not any part of the
Commitment is ever advanced.

     

    6           EVIDENCE

     

    It
is hereby agreed that abstracts or photocopies or other reproductions of the
Loan Ac count and/or from the books and/or records of the Bank certified by an
officer of the Bank as well as statements of accounts or a certificate signed by
two authorised officers of the Bank shall be, in the absence of a manifest
error, conclusive evidence and binding on the Borrower and on the other Security
Parties as to the existence and/or the amount of the Indebtedness, of any amount
due under this Agreement, of the applicable
Interest Rate or Default Rate or any other rate referred to in this Agreement,
the Interest Period, the value of additional securities under Clause 13.5., the
payment or non payment of any amount and/or the occurrence of any other Event of
Default.

     

    7           REPAYMENT AND
PREPAYMENT

     

    7.1       The
Borrower hereby absolutely and unconditionally covenants and agrees to repay the
Loan to the Bank in freely transferable Dollars by thirty two (32) consecutive
quarterly instalments, each instalment amounting to United States Dollars one
hundred and sixty thousand (USD 160,000), plus a balloon payment of United
States Dollars four million eight hundred eighty thousand (USD 4,880,000)
payable together the thirty second (32nd)
instalment at final maturity.

     

    The
time, the amount and the balance of the Loan following the payment of each such
instalment are specified for convenience purposes in Schedule IV. In case the
Bank shall advance a sum of less than United States Dollars ten million (USD
10,000,000) the Repayment Instalments will be reduced accordingly pro-rata. Each
such instalment together with interest as hereinafter set forth shall be
correspondingly payable on each of the Repayment Dates. The first Repayment Date
shall be the day falling three (3) months after the Drawdown Date of the
Commitment and each of the subsequent Repayment Dates shall fall at consecutive
intervals of three (3) months thereafter. The Final Repayment Date of the Loan
shall be the day falling 96 months after the Drawdown Date of the Commitment and
it must coincide with the last day of the final Interest Period to be adjusted
accordingly.

     

    7.2       Voluntary
Prepayment

     

    
      	
               
      

            	
              7.2.1

            	
              The
      Borrower may prepay part or all of the Loan at any Interest Payment Date
      relating to the whole of the Loan provided that it will have given a ten
      (10) days prior written notice to the Bank, specifying the amount to be
      prepaid on such date.

            

    

     

    
      	
               
      

            	
              7.2.2

            	
              The
      Borrower may also at any other time prepay the Loan or a part thereof upon
      ten (10) days prior written notice provided that it will also prepay all
      sums that the Bank shall determine to be its loss and cost sustained
      because of the prepayment within an Interest Period or Periods including
      but not limited to payment of interest Break Costs (if any) and of such
      additional amounts (if any) to compensate the Bank for the cost of
      redeploying funds as a result of such prepayment as well as any loss of
      Interest up

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              to
      the end of the then current Interest Period or Periods in respect of the
      whole amount of the Loan
outstanding

            

    

     

    7.3           Conditions

     

    All
prepayments shall be conditional to the prior fulfillment of the following
prerequisites:

     

    
      	
               
      

            	
              7.3.1

            	
              The
      interest accrued on the Loan to the date of prepayment and any other
      additional sums due hereunder and/or under any of the other Security
      Documents will be paid to the Bank.

            

    

     

    
      	
               
      

            	
              7.3.2

            	
              Every
      notice of prepayment shall be effective on actual receipt by the Bank,
      shall be irrevocable, shall oblige the Borrower to make such prepayment on
      the date specified and shall specify the amount to be prepaid, which shall
      be not less than United States Dollars one hundred fifty thousand (USD
      150,000) or a higher integral multiple therof. Any amount so prepaid may
      not be re-borrowed under this
Agreement.

            

    

     

    
      	
               
      

            	
              7.3.3

            	
              Any
      prepayment of less than the whole of the Loan will be applied by the Bank
      towards repayment of the Repayment Instalments in inverse order of
      maturity or any other way determined by the Bank at its
      discretion.

            

    

     

    7.4       Compulsory
Prepayment

     

    Unless
the Bank agrees to accept substitute security in form and substance satisfactory
to the Bank, in line with Clauses 13.5.2 and 13.5.3 hereof, the Borrower shall,
within one hundred eighty (180) days of the Vessel becoming a Total Loss or such
other later day as may be agreed in writing by the Bank, or upon the Vessel
being sold, prepay the Loan together with accrued interest to the date of
prepayment and all other sums payable by the Borrower to the Bank pursuant to
this Agreement and the other Security Documents (and if the Commitment or any
portion thereof has not been drawn yet, it shall be reduced to
zero).

     

    7.5        Unwinding
of Designated Transactions. On or prior to any repayment or prepayment under
this Clause 7 or any other provision of this Agreement, the Borrower shall
either:

     

    
      	
              (a)

            	
              wholly
      or partially reverse, offset, unwind or otherwise terminate one or more of
      the continuing Designated Transactions so that the notional principal
      amount of the continuing Designated Transactions thereafter remaining does
      not and will not in the future (taking into account the scheduled
      amortisation) exceed the amount of the Loan as reducing from time to time
      thereafter pursuant to Clause 7.1;
or

            

    

     

    
      	
              (b)

            	
              provide
      the Bank with additional security in all respects acceptable to the Bank
      to secure the amount determined by the Bank to be equal to the difference
      between the notional principal amount of the continuing Designated
      Transactions and the amount of the Loan as reducing from time to time
      thereafter pursuant to Clause 7.1

            

    

     

    Provided that in the case of a
prepayment made pursuant to the sale of the Vessel, the Borrower may only carry
out any of the matters referred to in this Clause 7.5 after (and not on or prior
to) the prepayment is made due to the sale of the Vessel.

     

    8           INTEREST AND INTEREST
PERIODS

     

    8.1        Interest
Rate

     

    The
Borrower shall pay, on each Interest Payment Date, interest on the Loan (or as
the case may be on each part thereof to which a different Interest Period
relates) at the rate applicable in respect of each

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    Interest
Period. Interest shall accrue on the Loan (or as the case may be on each portion
thereof to which a different Interest Period relates) during each Interest
Period from and including the first day of that Interest Period, to but
excluding the last day thereof. The rate of the interest shall be the rate per
annum determined by the Bank to be the aggregate of (a) the Margin and (b) the
LIBOR unless there is an Agreed Rate in which case the rate for the calculation
of interest shall be the rate per annum determined by the Bank to be the
aggregate of: (a) the Margin and (b) the Agreed Rate.

     

    8.2        Interest
Period

     

    The
Borrower may by written notice to be received by the Bank not later than 10 a.m.
on the second Banking Day before the beginning of each Interest Period specify
whether such next Interest Period shall have a duration of one (1), three (3) or
six (6) months or other period subject to the availability which shall be
determined solely by the Bank.

     

    8.3       Determination
of Interest Periods

     

    Every
Interest Period shall be of the duration specified by the Borrower pursuant to
Clause 8.2. but so that:

     

    
      	
              (a)

            	
              the
      first Interest Period shall commence on the Drawdown Date of the Commitment
      and each subsequent Interest Period in respect thereof shall commence on
      the last day of the immediately preceding Interest Period in
      question

            

    

     

    
      	
              (b)

            	
              if
      the last Interest Period would overrun the last Repayment Date, such
      Interest Period shall end on such Repayment Date. Should an Interest
      Period determined in accordance with the provisions of this Clause overrun
      one or more Repayment Dates, so many additional Interest Periods will be
      specified as the number of the Repayment Dates being overrun by the above
      Interest Period. Each of such additional Interest Periods will be of a
      duration ending at the corresponding Repayment Date and for an amount
      equal to the instalment due on such Date, while the above overrunning
      Interest Period shall be for the remaining balance of the Loan after the
      deduction of the amount(s) of the additional Interest Period(s) ending on
      the Repayment Date(s) falling within the said over-running Interest
      Period.

            

    

     

    
      	
              (c)

            	
              if
      the Borrower fails to specify the duration of an Interest Period in
      accordance with the provisions of Clause 8.2. and this Clause 8.3 such
      Interest Period shall have a duration of three months or such other period
      as shall comply with this Clause
8.3.;

            

    

     

    
      	
              (d)

            	
              if
      the Bank determines that the duration of an Interest Period specified by
      the Borrower in accordance with Clause 8.2. is not readily available, then
      that Interest Period shall have such duration as the Bank after having
      consulted with the Borrower may
determine.

            

    

     

    8.4       Default
Rate.

     

    If
the Borrower fails to pay any sum (including, without limitation, any sum
payable pursuant to this clause 8.4.) on its due date for payment under any of
the Security Documents, the Borrower shall pay interest on such sum (Default
Rate) from the due date up to the date of actual payment (as well after as
before judgment) at a rate determined by the Bank to be the aggregate of (a) two
per cent (2%) per annum, (b) the Margin and (c) the LIBOR for periods of not
more than three (3) Month duration as selected by the Bank. The first of the
above periods shall commence on the due date for payment, while each one of the
subsequent periods shall commence on the last day of the preceding such period.
Such interest shall be compounded and shall be due arid payable on the last day
of each such period as determined by the Bank and each such day shall, for the
purposes of this Agreement, be treated as an Interest Payment Date. If, for the
reasons specified in Clause 8.6.(a), the Bank is unable to determine a rate in
accordance with the foregoing provisions of this clause, interest on any sum
not

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    paid
on its due date for payment shall be calculated at a rate determined by the Bank
to be two per cent (2%) per annum above the aggregate of the Margin and the cost
of funds to the Bank.

     

    8.5        Notification

     

    The
Bank shall notify the Borrower of the duration of each Interest Period and of
each rate of interest determined by it under this Clause 8.

     

    8.6        Non
availability.

     

    
      	
              (a)

            	
              If
      and whenever, at any time prior to the commencement of any Interest
      Period, the Bank shall have determined any of the following facts (which
      determination shall be conclusive):

            

    

     

    
      	
               
      

            	
              (i)

            	
              that
      adequate and fair means do not exist for ascertaining LIBOR during such
      Interest Period; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              that
      deposits in Dollars are not available to the Bank in the London InterBank
      Market in the ordinary course of business in sufficient amounts or it is
      impracticable for the Bank to fund or to continue to fund the Loan in
      Dollars.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              that
      LIBOR for that Interest Period will not adequately reflect the cost of
      funding the Loan for that Interest
Period.

            

    

     

    the
Bank shall forthwith give notice (a “Determination Notice”) thereof to the
Borrower. A Determination Notice shall contain particulars of the relevant
circumstances giving rise to this issue. After the giving of any Determination
Notice the undrawn amount of the Loan shall not be borrowed until notice to the
contrary is given to the Borrower by the Bank.

     

    
      	
              (b)

            	
              During
      the period of 30 Banking Days after any Determination Notice has been
      given by the Bank under Clause 8.6.(a), the Bank shall certify an
      alternative basis (the “Substitute Basis”) for maintaining the Loan. The
      Substitute Basis may (without limitation) include alternative interest
      periods, alternative currencies or alternative rates of interest but shall
      include a margin above the cost of funds to the Bank equivalent to the
      Margin. Each Substitute Basis so certified shall be binding upon the
      Borrower and shall take effect in accordance with its terms from the date
      specified in the Determination Notice until such time as the Bank notifies
      the Borrower that none of the circumstances specified in Sub-clause
      8.6.(a) continues to exist whereupon the normal interest rate fixing
      provisions of the Agreement shall
apply.

            

    

     

    
      	
              (c)

            	
              In
      any event, during the thirty (30) days following the giving of a
      Determination Notice, the Borrower and the Bank shall negotiate in good
      faith in order to arrive at the Substitute Basis for the Bank to fund or
      continue to fund the Loan (or the relevant part thereof) during such
      Interest Period. If within such thirty (30) day period the Substitute
      Basis to fund or to continue to fund the Loan (or the relevant part
      thereof) is agreed upon, then such Substitute Basis shall take effect in
      accordance with its terms. If the Borrower and the Bank fails to agree on
      such Substitute Basis within such thirty (30) day period and such
      circumstances are continuing at the end of such thirty day period, then
      the Bank shall set a Substitute Basis as per Clause 8.6. (b). If the
      circumstance shall continue at the end of such interest period, the
      procedure in this Clause 8.6 (c) shall be repeated. If the Borrower shall
      not agree with such rate then the Borrower may give not less than fifteen
      (15) Business Days irrevocable notice of prepayment to the Bank in which
      case the commitment hereunder of the Bank shall thereupon be cancelled
      and, if the Loan is outstanding, the Borrower shall prepay the Loan on the
      first Business Day after such period in accordance with the terms of this
      Agreement and the obligations of the Bank shall thereupon
      terminate.

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

     

    9           THE MASTER SWAP
AGREEMENT

     

    9.1       Purpose

     

    The
Bank and the Borrower have entered, and/or may during the Facility Period enter,
into one or more Transactions pursuant to a Master Swap Agreement, the terms and
conditions of each of which are or will be specified in a Confirmation sent by
the Bank to the Borrower.

     

    9.2        Additional
Termination Event

     

    If
the Loan is for any reason not advanced to the Borrower on or before the Latest
Permissible Drawdown Date, and the Bank and the Borrower has entered into any
Transactions on or before the Latest Permissible Drawdown Date, for the purposes
of the Master Swap Agreement an Additional Termination Event (with the Bank as
the Affected Party) shall be deemed to have occurred on the Latest Permissible
Drawdown Date.

     

    9.3       Adjustment
of Notional Amounts

     

    If
the aggregate amount of the Loan actually advanced by the Bank to the Borrower
is less than the Notional Amount (or the aggregate Notional Amounts) of the
Transactions entered into on or before the Drawdown Date, the obligations of the
Borrower in respect of those Transactions shall, unless otherwise agreed by the
Bank, be calculated, so far as the Bank considers it practicable to do so, by
reference to a Notional Amount (or aggregate Notional Amounts) equal to the
amount of the Loan actually advanced, reduced on each Repayment Date by the
amount of the Repayment Instalment due on that Repayment Date, adjusted if
necessary in accordance with Clause 7.1.

     

    9.4        Effect
of prepayment

     

    If
the Borrower, subject always to Clause 7, prepay part of the Loan (whether
pursuant to Clause 7, Clause 13.5.2 or any other provision of this Agreement),
and the amount of the Loan remaining outstanding after application of that
prepayment is less than the Notional Amount (or the aggregate Notional Amounts)
of the Transactions then in effect (reduced, if appropriate, in accordance with
the Confirmations relating to those Transactions), the obligations of the
Borrower in respect of those Transactions shall, unless otherwise agreed by the
Bank, be calculated, so far as the Bank considers it practicable to do so, by
reference to a Notional Amount (or aggregate Notional Amounts) equal to the
amount of the Loan remaining outstanding after application of the prepayment in
question, reduced on each Repayment Date by the Repayment Instalment due on that
Repayment Date after taking into account the application of the
prepayment.

     

    9.5       Authority

     

    In
order to give effect to Clauses 9.3 and 9.4, or in the event of voluntary or
compulsory prepayment by the Borrower of the whole of the Loan, the Borrower and
the Bank will agree to amend, restructure, unwind, cancel, net out, terminate,
liquidate, transfer or assign any of the rights and/or obligations created
pursuant to the Master Swap Agreement in respect of those Transactions, and/or
to enter into any other interest rate exchange and/or hedging transaction or
commitment with the Borrower or with any other counterparty approved by the
Bank.

     

    9.6       Termination
of Transactions

     

    If
the exercise of the Bank’s rights under Clause 9.5 results in the termination of
any Transaction (save in the case termination takes place due to voluntary
prepayment), that Transaction shall, for the purposes of the Master Swap
Agreement (including, without limitation, section 6(e)(i) of the
Master

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Swap
Agreement) be treated as a Terminated Transaction resulting from an Event of
Default by the Borrower,

     

    9.7       Indemnity

     

    The
Borrower will indemnify the Bank from time to time on demand in respect of all
liabilities, losses, costs or expenses suffered, incurred or sustained by the
Bank arising in any way in relation to the exercise by the Bank of its rights
under this Clause, or arising in any way from any other termination,
cancellation, unwinding or restructuring of any Transaction, together (in each
case) with interest at the Default Rate from the date of the Bank’s demand until
the date on which the Bank receives payment or reimbursement, before or after
any relevant judgment.

     

    9.8        Transaction
under the Master Swap Agreement.

     

    The
Borrower on the date hereof is signing the Master Swap Agreement with the Bank.
At any time during the Facility Period the Borrower may request the Bank to
conclude Transactions for the purpose of swapping its interest payment
obligations under this Agreement. Signature of the Master Swap Agreement does
not commit the Bank to conclude Transactions, or even to offer terms for doing
so, but does provide a contractual framework within which Transactions may be
concluded and secured, assuming that the Bank is willing to conclude any
Transactions at the relevant time and that, if that is the case, mutually
acceptable terms can then be agreed at the relevant time.

     

    
      	
               
      

            	
              9.8.1

            	
              In
      relation to the Master Swap Agreement, the Borrower hereby agrees and
      undertakes with the Bank throughout the Facility
  Period:-

            

    

     

    
      	
               
      

            	
              9.8.1.1

            	
              at
      the Borrower’s option to use Transactions concluded under the Master Swap
      Agreement for the purpose of (inter alia) swapping its interest payment
      obligations under Clause 8 from LIBOR-based funding to longer-term fixed
      rate funding;

            

    

     

    
      	
               
      

            	
              9.8.1.2

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

            

    

     

    
      	
               
      

            	
              9.8.2

            	
              The
      Borrower gives the Bank a right of first refusal in relation to any
      proposed swap or other Transactions relative to the Loan so that (subject
      only to the rates quoted by the Bank being competitive with other banks
      quoting on the same basis), any swap or other Transactions concluded by
      the Borrower shall be concluded with the Bank under the Master Swap
      Agreement.

            

    

     

    
      	
               
      

            	
              9.8.3

            	
              The
      Bank agrees that, to enable the Borrower to secure its obligations to the
      Bank under the Master Swap Agreement, the security of the Security
      Documents shall be held by the Bank not only to secure the Borrower’s
      obligations under this Agreement but also the Borrower’s obligations under
      the Master Swap Agreement.

            

    

     

    10        PAYMENTS ACCOUNTS &
CALCULATIONS

     

    10.1     Not
set off or counterclaim and no deductions.

     

    
      	
              (a)

            	
              The
      Borrower acknowledges that in performing its obligations under this
      Agreement, the Bank will be incurring liabilities to third parties in
      relation to the funding of amounts to the Borrower, such liabilities
      matching the liabilities of the Borrower to the Bank and that it is
      reasonable for the Bank to be entitled to receive payments from the
      Borrower gross on the due date in order that the Bank is put in a position
      to perform its matching obligations to
the

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    relevant
third parties. Accordingly, all payments to be made by the Borrower under any of
the Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and free and clear of any deductions or withholdings, in
Dollars on the due date (for value on the day on which payment is due) to the
account of the Bank (with a direct tested telex advise to the Bank) or to such
other account at such other bank in such place as the Bank may from time to time
specify for this purpose.

     

    
      	
              (b)

            	
              If
      at any time the Borrower is required to make any deduction or withholding
      in respect of Taxes or otherwise from any payment due under any of the
      Security Documents the sum due from the Borrower in respect of such
      payment shall be increased to the extent necessary to ensure that after
      the making of such deduction or withholding the Bank receives on the due
      date for such payment a net sum equal to the sum which it would have
      received had no such deduction or withholding been required to be made.
      The Borrower shall indemnify the Bank against any losses or costs incurred
      by the Bank by reason of any failure of the Borrower to make any such
      increased payment to the Bank on account of any deduction or withholding
      or by reason of any increased payment not being made on the due date for
      such payment. The Borrower shall promptly forward to the Bank official
      receipts and any other proof evidencing the amounts paid or payable in
      respect of any deduction or withholding as aforesaid. The obligations of
      the Borrower under this provision shall remain in force notwithstanding
      the repayment of the Loan.

            

    

     

    
      	
              (c)

            	
              Payments
      by the Borrower shall be considered to be made as of the date on which the
      Bank receives correctly authenticated advice of the credit of such account
      provided that such advice is received at a time of day when the Bank is
      able in accordance with its usual practice to process and utilize such
      funds on such day, failing which such payment shall be considered to be
      made as of the next Banking Day following receipt of such
      advice.

            

    

     

    10.2     Payments
by the Bank.

     

    All
sums to be advanced by the Bank to the Borrower under this Agreement in respect
of the Loan shall be remitted in Dollars on the Drawdown Date to the account
specified in the Drawdown Notice.

     

    10.3     Calculation

     

    All
interest and other payments periodic or payable by reference to a rate per annum
under this Agreement shall accrue from day to day and be calculated on the basis
of actual number of days elapsed and a 360 day year.

     

    11        UNLAWFULNESS AND INCREASED
COSTS 

     

    11.1     Unlawfulness.

     

    
      	
              (a)

            	
              If
      it is or becomes contrary to any law or regulation for the Bank to
      disburse the Loan or to maintain the Commitment or the Loan, or to fund
      the Loan or to claim or receive any amount payable to it hereunder, the
      Bank shall give notice to the Borrower whereupon (a) the Commitment shall
      be reduced to zero and (b) the Borrower shall be obliged to prepay the
      Loan on a future specified date not being later than the latest
      date.

            

    

     

    
      	
              (b)

            	
              permitted
      by the relevant law or regulation, or, if such date is not provided,
      within 40 days from the notice of the Bank, together with interest accrued
      to the date of prepayment and all other sums payable by the Borrower under
      the Security Documents.

            

    

     

    
      	
              (c)

            	
              If
      circumstances arise which would result in a Notification under Clause
      11.1. then, without in any way limiting the rights of the Bank under
      Clause 11.1., the Bank shall use
reasonable

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    endeavours
to transfer each obligations, liabilities and rights under the Security
Documents to another office or financial institution not affected by the
circumstances.

     

    11.2     Increased
Cost.

     

    If,
as a result of (a) any change in or in the interpretation of any law, regulation
e.t.c. by any governmental authority in any country the laws of which are
applicable on the Bank, or (b) compliance by the Bank with any requirement of
any authority (whether or not having the force of law) but which the Bank
usually complies with or any other set of circumstances including any type of
liquidity, stock, or capital adequacy controls or other Banking or monetary
controls or requirements connected with the manner in which the Bank allocates
capital resources to its obligations hereunder:

     

    
      	
              (a)

            	
              The
      cost to the Bank of making available the Commitment or any part thereof or
      maintaining or funding the Loan is increased;
or

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

            	
              The
      basis of taxation of payments to the Bank of principal or of interest on
      any amounts advanced by it is
changed;

            

    

     

    then
the Borrower shall pay to the Bank on account of the Bank, from time to time,
upon demand, such additional moneys as shall indemnify the Bank for any
increased cost, reduction in principal or interest receivable or other foregone
return whatsoever. The Bank will notify the Borrower in writing of any intention
to claim indemnification and such notification, made in line with the provision
of Clause 6, which will be a conclusive evidence binding on the Borrower as to
the amount of any increased cost or reduction and the method of calculating the
same. Such claim may be made at any time and must be discharged by the Borrower
within fifteen (15) days of demand. It shall not be a defence to a claim by the
Bank hereunder that any increased cost or reduction could have been avoided by
the Bank. Any amount due from the Borrower hereunder shall be due as a separate
debt and shall not be affected by judgement being obtained for any other sums
due under or in respect of this Agreement or of any other Security
Document.

     

    12        SECURITY

     

    12.1     Security
Documents

     

    As
security for the due repayment of all sums from time to time payable to the
Bank, the Borrower shall ensure and procure that the following Security
Documents are duly executed and, where required properly registered in favour of
the Bank at the time specified herein or otherwise as required by the Bank and
ensure that such security, apart from this Agreement, consists of

     

    
      	
              (a)

            	
              A
      Master Swap Agreement and the relevant Schedule attached thereto (the
      “Master Swap Agreement”)
      executed by the Borrower in form and substance satisfactory to the
      Bank;

            

    

     

    
      	
              (b)

            	
              A
      Master Agreement Security Deed (the “Master Agreement Security
      Deed”) executed or (as the context may require) to be executed by
      the Borrower in favour of the Bank;

            

    

     

    
      	
              (c)

            	
              A
      Corporate Guarantee from the Corporate Guarantor in form and substance
      satisfactory to the Bank (the “Corporate
      Guarantee”);

            

    

     

    
      	
              (d)

            	
              A
      duly registered First Preferred Mortgage over the Vessel providing on the
      basis of the provisions of the applicable law the highest degree of
      security for the Bank (the “Mortgage”);

            

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    

     

    
      	
              (e)

            	
              A
      first Priority General Assignment of all the Insurances, Earnings and
      Requisition Compensation for the Vessel in form and substance satisfactory
      to the Bank and respective notices of assignment and acknowledgements
      thereof (the “General
      Assignment”);

            

    

     

    
      	
              (f)

            	
              Specific
      assignments of the benefit of any charter of more than twelve (12)
      calendar months’ duration in respect of the Vessel chartered and
      respective notices and acknowledgements thereof (the “Specific
      Assignment”).

            

    

     

    
      	
              (g)

            	
              Pledge
      agreement(s) in form and substance satisfactory to the Bank executed or
      (as the context may require) to be executed by the Borrower or by the
      Corporate Guarantor in favour of the Bank creating security in respect of
      the Operating Account for the Vessel (the “Operating Account
      Pledge(s)”)

            

    

     

    
      	
              (h)

            	
              A
      pledge agreement in form and substance satisfactory to the Bank executed
      or (as the context may require) to be executed by the Borrower in favour
      of the Bank in respect of the Retention Account (the “Retention Account
      Pledge”);

            

    

     

    
      	
              (i)

            	
              Manager’s
      undertaking in form and substance satisfactory to the Bank pursuant to
      which the Manager will subrogate its rights to the Loan throughout the
      Facility Period (the “Manager’s
      Undertaking”).

            

    

     

    13        COVENANTS

     

    The
Borrower covenants with the Bank that, from the date of this Agreement and as
long as any sums are due and/or owing and/or outstanding under this Agreement or
arty of the other Security Documents, the Borrower will:

     

    13.1     Information
Covenants.

     

    
      	
               
      

            	
              13.1.1

            	
              Furnish
      the Bank, in form and substance satisfactory to the Bank, with annual,
      consolidating and consolidated financial statements of the Borrower, the
      Corporate Guarantor and of any other of the companies of the Group within
      180 days after the end of the financial year concerned, and prepared in
      accordance with generally accepted accounting principles consistently
      applied;

            

    

     

    
      	
               
      

            	
              13.1.2

            	
              Provide
      the Bank from time to time as the Bank may reasonably request and in form
      and substance satisfactory to the Bank with any information on the
      financial conditions commitments and operations of the Borrower and of any
      other of the companies of the
Group.

            

    

     

    
      	
               
      

            	
              13.1.3

            	
              Promptly
      inform the Bank of any occurrence which came to the knowledge of the
      Borrower which might adversely affect the ability of the Borrower or any
      other Security Party to perform its respective obligations under this
      Agreement and/or any of the other Security Documents and of any Event of
      Default forthwith upon becoming aware
thereof;

            

    

     

    
      	
               
      

            	
              13.1.4

            	
              Promptly
      inform the Bank of all major financial developments in the Group such as
      new loans, refinancing/restructuring of existing loans, new acquisitions
      and sales, contracts for term employment of Vessel
  e.t.c.

            

    

     

    13.2     Banking
Arrangements.

     

    
      	
               
      

            	
              13.2.1

            	
              Use
      the Loan exclusively for the purpose specified in this
      Agreement;

            

    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              13.2.2

            	
              Ensure
      that all obligations under this Agreement and the other Security Documents
      will be duly and punctually
performed.

            

    

     

    
      	
               
      

            	
              13.2.3

            	
              Pay
      to the Bank on demand any sum of money which is payable to the Bank under
      this Agreement and the other Security Documents but in respect of which it
      is not specified in any other Clause when it is due and
      payable;

            

    

     

    
      	
               
      

            	
              13.2.4

            	
              Accept
      that a Certificate of any of the Bank or a statement of account executed
      by two authorised officers of any of the Bank or an Extract of the Books
      of any of the Bank certified by an officer of the Bank shall (save for
      manifest error) be conclusive evidence of the amount due under this
      Agreement and shall be final and binding on all parties
      hereto;

            

    

     

    
      	
               
      

            	
              13.2.5

            	
              Upon
      request by the Bank from time to time provide such information and
      evidence to the Bank as the Bank would require to demonstrate compliance
      with the covenants and warranties set forth in this Agreement and any
      other Security Document.

            

    

     

    13.3     Financial
Exposure.

     

    
      	
               
      

            	
              13.3.1

            	
              Incur
      no debt and grant no guarantee to and/or in favour of anybody except in
      the ordinary course of business, without the prior written consent of the
      Bank, which shall not be unreasonably
withheld.

            

    

     

    
      	
               
      

            	
              13.3.2

            	
              Not
      give any loans or credits or advances to any person, or entity without the
      previous consenting opinion of the Bank which shall not be unreasonably
      withheld;

            

    

     

    

    
      	
               
      

            	
              13.3.3

            	
              Not
      declare or pay any dividends or other distribution in case of an Event of
      Default without the prior written consent of the
  Bank;

            

    

     

    
      	
               
      

            	
              13.3.4

            	
              Not
      transfer, sell or otherwise dispose any of its real or personal property,
      assets or rights, whether present or future, without the prior written
      consent of the Bank or allow any part of its undertaking, property, assets
      or rights, whether present or future, to be mortgaged, charged, pledged,
      used as a lien (except for lien created by law) or otherwise encumbered
      without the prior written consent of the
Bank;

            

    

     

    
      	
               
      

            	
              13.3.5

            	
              Ensure
      that the Indebtedness of the Borrower to the Bank hereunder will not be
      subordinated in priority of payment to any other present or future
      claim.

            

    

     

    
      	
               
      

            	
              13.3.6

            	
              Ensure
      that the Borrower or the Corporate Guarantor will maintain throughout the
      Facility Period in an account with the Bank free and unencumbered (save in
      favour of the Bank) minimum liquidity balances equal to United States
      Dollars three thousand
(USD300,000).

            

    

     

    
      	
               
      

            	
              13.3.7

            	
              Ensure
      that the aggregate debt to equity ratio of the vessels owned by the
      Corporate Guarantor will not exceed 75% of their aggregate current market
      values obtained on a charter free basis by a broker appointed by and
      reporting to the Bank, the latter having the right to obtain such
      valuations on a quarterly basis.

            

    

     

    
      	
               
      

            	
              13.3.8

            	
              Ensure
      that the minimum Net Worth of the Corporate Guarantor listed in Nasdaq
      will be United States Dollars fifteen million
    (USD15,000,00).

            

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              13.3.9

            	
              Not
      without the Bank’s prior written consent assign, novate or in any other
      way transfer any of its rights or obligations under or pursuant to the
      Master Swap Agreement, nor enter into any interest rate exchange or
      hedging agreement with anyone other than the Bank, nor any other agreement
      or commitment the effect of which is, in the opinion of the Bank,
      materially to prejudice the hedging of the Borrower’s interest rate risk
      effected by the Transaction from time to time entered into between the
      Borrower and the Bank.

            

    

     

    13.4     Business
and Corporate Structure.

     

    
      	
               
      

            	
              13.4.1

            	
              Not
      change the nature, organisation and conduct of the business of the
      Borrower and/or the Corporate Guarantor as shipowner and/or Manager of the
      Vessel as the case may be;

            

    

     

    
      	
               
      

            	
              13.4.2

            	
              Not
      merge or consolidate with any other company or other legal
      entity;

            

    

     

    
      	
               
      

            	
              13.4.3

            	
              On
      demand and in any event on the thirty-first day of May in each year
      deliver or cause to be delivered to the Bank official certificates from
      the relevant authority confirming that the Borrower and any other
      corporate Security Party is in good standing in its country of
      incorporation;

            

    

     

    
      	
               
      

            	
              13.4.4

            	
              Ensure
      that there is no change in the Directors and Officers of the Borrower and
      of any other corporate Security Party and moreover ensure that no change
      shall be made directly or indirectly in the ownership, beneficial
      ownership, control or management of the Borrower without the prior written
      consent of the Bank, which shall not be unreasonably
    withheld.

            

    

     

    13.5     Obligation
to maintain the Security Value.

     

    
      	
               
      

            	
              13.5.1

            	
              At
      all times the Borrower will procure that the value of the Vessel and other
      security to be granted to the Bank pursuant to this Clause (the “Security
      Value”) is not less than the Minimum Value at any
  time.

            

    

     

    
      	
               
      

            	
              13.5.2

            	
              If
      the Security Value is less than the Minimum Value at any time, the
      Borrower will within thirty (30) days of a request by the Bank and in
      order to secure the Indebtedness on such terms as may be acceptable to the
      Bank:

            

    

     

    
      	
               
      

            	
              i.

            	
              prepay
      a proportionate part of the Loan and of the Swap Exposure;
      and/or

            

    

     

    
      	
               
      

            	
              ii.

            	
              procure
      for or grant to the Bank such other security as the Bank shall expressly
      approve for the purpose of this Clause
13.5.

            

    

     

    so
that after such prepayment or grant of other security, the Security Value is not
less than the Minimum Value.

     

    
      	
               
      

            	
              13.5.3

            	
              As
      far as clause 13.5.2.(ii) is concerned
:

            

    

     

    
      	
               
      

            	
              i.

            	
              cash
      provided by way of security shall be valued in Dollars at its principal
      amount;

            

    

     

    
      	
               
      

            	
              ii.

            	
              any
      other security shall be valued on such basis as the Bank shall reasonably
      determine in its discretion from time to time;
  and

            

    

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              iii.

            	
              there
      shall be deducted from any value or valuation the amount which is owing
      and might become owing and which is secured on the asset concerned by any
      prior or equal ranking Security Interest (other than in favour of the Bank
      to secure the Indebtedness).

            

    

     

    
      	
               
      

            	
              iv.

            	
              cash
      deposits and/or any other security acceptable to the Bank it will be
      provided in a way and manner also acceptable to the
  Bank.

            

    

     

    
      	
               
      

            	
              13.5.4

            	
              At
      least once every year and/or at any time that the Bank might consider it
      useful and reasonably request the Borrower to undertake to have at its own
      cost the Vessel valued with or without physical inspection (as the Bank
      may require) in Dollars, on the basis of sale for prompt delivery free of
      Encumbrances in favour of the Bank for cash at arm’s length on normal
      commercial terms as between a willing seller and a willing buyer by an
      independent shipbroker selected by or acceptable to the Bank and reporting
      to the Bank. Such valuation shall be made on the basis of the value of the
      Vessel charter free. The Borrower agrees to accept the valuation made as
      aforesaid as conclusive evidence of the market value of the Vessel at the
      date of valuation. The Borrower will supply to the Bank and to the above
      shipbrokers such information as such shipbrokers shall
      require.

            

    

     

    13.6     Covenants
concerning the Vessel.

     

    
      	
               
      

            	
              13.6.1

            	
              Ensure
      that the Vessel will maintain its present ownership, management, control
      and ultimate beneficial ownership;

            

    

     

    
      	
               
      

            	
              13.6.2

            	
              Ensure
      that the Vessel is and will remain properly certified in respect with the
      ISM Code and in compliance with the ISO 9001 and the ISPS code whe a
      applicable and moreover that it will remain in class free of
      recommendations, notations or average damage affecting class and provide
      the Bank on demand with copies of all ISM and/or all class and/or trading
      certificates of the Vessel.

            

    

     

    
      	
               
      

            	
              13.6.3

            	
              Ensure
      that at all times the Vessel is managed by the Manager or by such company
      as may be approved in writing by the Bank and that such company is and
      will remain ISM certified and in compliance with the ISO 9001 and the ISPS
      Code when applicable and that it shall maintain at all times an
      organisation and personnel which in the opinion of the Bank is adequate to
      provide sufficient management, agency, financial, secretarial and other
      services for the Vessel.

            

    

     

    
      	
               
      

            	
              13.6.4

            	
              Maintain
      all Insurances of the Vessel and comply with all insurance requirements
      specified in this Agreement (including in particular Schedule II) and in
      case it fails to maintain the Vessel and/or such other property so
      insured, the Borrower hereby, for the purpose of serving the interest of’
      the Bank, irrevocably authorises the Bank and grant to it the right to
      effect the insurances of the Vessel and/or of the property as provided for
      in Schedule III in the amount and in terms acceptable to the Bank from
      time to time at the cost and on behalf of the Borrower. The Bank will have
      the right but not the obligation to effect all or any of such insurances
      at the cost of the Borrower and such cost shall consist Expenses in the
      meaning of the Clause 1;

            

    

     

    
      	
               
      

            	
              13.6.5

            	
              Supply
      copies of all cover notes, certificates of entry, insurance policies and
      documents and furnish details of all insurances contemplated by Schedule
      [I and/or contracted to the Bank. The Bank may submit all such insurance
      documents for examination to an insurance consultant nominated by the
      Bank. The Bank will be at liberty to decide on the adequacy and the
      compliance of the cover with the
provisions

            

    

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              of
      the Security Documents including Schedule II and its decision shall be
      final and binding on the Borrower. The cost including Value Added Tax of
      such insurance consultant shall be considered as
  Expenses;

            

    

     

    
      	
               
      

            	
              13.6.6

            	
              The
      Bank will be at liberty to conduct at the Borrower’s cost physical
      condition survey of the Vessel and a comprehensive record inspection by a
      surveyor appointed by the Bank.

            

    

     

    
      	
               
      

            	
              13.6.7

            	
              At
      the Bank’s reasonable request, promptly provide a consultant nominated and
      appointed by the Bank to monitor the collection of claims of whatsoever
      nature with whatever information and documentation the Bank shall require.
      All the cost including Value Added Tax in respect of the appointment of
      such consultant shall be considered as
Expenses;

            

    

     

    
      	
               
      

            	
              13.6.8

            	
              Not
      grant or permit any charge, lien (except for lien created by law)or other
      encumbrance to be imposed upon the Vessel or otherwise dispose of any of
      its rights under any charterparty or contract of affreightment relating to
      the Vessel or any other earnings of the
Vessel;

            

    

     

    
      	
               
      

            	
              13.6.9

            	
              Ensure
      that the Vessel is maintained and trade in conformity with the laws ofits
      flag, of its owning company or of the nationality of the officers, or
      crew, and in conformity with the requirements of the Insurances and
      nothing is done or permitted to be done which could endanger the flag of
      the Vessel, or its free ownership and operation or its
      Insurances;

            

    

     

    
      	
               
      

            	
              13.6.10

            	
              Always
      comply with all the covenants provided for in the mortgage on the
      Vessel

            

    

     

    
      	
               
      

            	
              13.6.11

            	
              Not
      without the prior written consent of the Bank enter into a charterparty,
      contract of affreightment, agreement or related document in respect of the
      employment of the Vessel (i) for a period of more than twelve (12) months
      or (ii) below the market rate prevailing at the time when the Vessel is
      fixed in or on terms which are not in accordance with the commercial
      practice prevailing at the relevant time or (iii) on demise
      charterparty;

            

    

     

    
      	
               
      

            	
              13.6.12

            	
              Execute
      and deliver to the Bank within fifteen (15) days of signing of any
      charter, the duration of which is to be for a period, directly or by
      extension of more than twelve (12) months, (a) a specific assignment of
      such charter in form and substance satisfactory to the Bank and (b) a
      notice of any such assignment addressed to the relevant charterer and
      endorsed with an acknowledgement of receipt by the relevant charterer all
      in form and substance satisfactory to the
Bank;

            

    

     

    
      	
               
      

            	
              13.6.13

            	
              The
      Borrower undertakes to notify the Bank
  forthwith:

            

    

     

    
      	
               
      

            	
              (a)

            	
              of
      any Environmental claim for an amount exceeding USD 300,000 made against
      the Vessel and/or its owner.

            

    

     

    
      	
               
      

            	
              (b)

            	
              upon
      becoming aware of any incident which may give rise to an Environmental
      Claim and to keep the Bank advised in writing of the owners’ response to
      such Environmental claim on such regular basis and in such detail as the
      Bank shall require.

            

    

     

    13.7     Validity
of securities

     

    
      	
               
      

            	
              13.7.1

            	
              Ensure
      and procure that all approvals or consents and/or any other steps required
      for the validity, enforceability and legality of this Agreement and the
      other Security

            

    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              Documents
      and for the performance thereof by the Borrower and any other Security
      Party are appropriately taken and are maintained in full force and
      effect.

            

    

     

    
      	
               
      

            	
              13.7.2

            	
              Ensure
      and procure that, unless and until directed by the Bank otherwise (i) all
      the Earnings of the Vessel shall be paid to the Operating Account and (ii)
      the persons from whom the Earnings are from time to time due are
      irrevocably instructed to pay them to the Operating Account in accordance
      with the provisions hereof and of the relevant Security
      Documents;

            

    

     

    
      	
               
      

            	
              13.7.3

            	
              Pay
      all Taxes, and other governmental charges when the same fall due, except
      to the extent that the same are being contested in good faith by
      appropriate proceedings and adequate reserves have been set aside for
      their payment if such proceedings
fail;

            

    

     

    
      	
               
      

            	
              13.7.4

            	
              From
      time to time at the request of the Bank execute and deliver to the Bank or
      procure the execution and delivery to the Bank of all such documents as
      shall be deemed desirable at the sole discretion of the Bank for giving
      full effect to this Agreement, and for perfecting, protecting the value of
      or enforcing any rights or securities granted to the Bank under the
      Security Documents and any other documents executed pursuant hereto or
      thereto.

            

    

     

    
      	
               
      

            	
              13.7.5

            	
              The
      covenants specified in this Clause are inserted solely for the benefit of
      the Bank and may be waived in whole or in part and with or without
      conditions by the Bank without prejudicing the right of the Bank to
      require fulfillment of such covenants at such time and manner as specified
      by the Bank.

            

    

     

    13.8     Admission,
and warranties of the Security Parties as regards their liability.

     

    
      	
              (a)

            	
              The
      giving of the Corporate Guarantee by the Guarantor is to the commercial
      benefit of such Guarantor in that the Guarantor has close financial
      cooperation and mutual assistance with the Borrower and that by lending
      its support to the Borrower through such Guarantee it further its own
      business interests within the scope of its constitutional
      documents;

            

    

     

    
      	
              (b)

            	
              The
      liability of the Borrower and of the other Security Parties shall in all
      cases, whether so expressed to be or not, be joint and several and each
      representation and warranty and each covenant and agreement made or given
      or to be made or given by any one of them will be considered as made or
      given by them all jointly and
severally;

            

    

     

    
      	
              (c)

            	
              The
      Borrower further represents that none of the Security Parties shall be
      exonerated and its liability hereunder shall not be lessened or impaired
      by any time, indulgence or relief being given by the Bank to any other
      Security Party or by the variation, compromise, renewal or release of or
      refusal or neglect to perfect or enforce any right, remedies or securities
      against the Borrower or any other Security Party, by anything done or
      omitted which but for this provision might operate to exonerate any other
      Security Parties;

            

    

     

    
      	
              (d)

            	
              The
      obligations of the Borrower shall not be affected by any legal limitation,
      disability, incapacity or other circumstances relating to any other
      Security Party, whether or not known to the Bank, by any invalidity in or
      irregularity or unenforceability of the obligations of such other Security
      Party under any of the Security Documents or otherwise or by any change in
      the constitution of, or any amalgamation or reconstruction of any Security
      Party or of the Bank.

            

    

     

    14        EVENTS OF
DEFAULT

     

    The
following events shall constitute an Event of Default (whether or not caused by
any reason whatsoever outside the control of the Borrower or whether such Event
shall occur or come about by

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    operation
of Law or regulation or pursuant to, or in compliance with any judgment, decree
or order of any Court or other authority):

     

    14.1     Non
Performance of Obligations.

     

    
      	
               
      

            	
              14.1.1

            	
              If
      the Borrower and/or any other Security Party fail to pay any sum due
      hereunder and/or under the other Security Documents when due, or in the
      case of any sum payable on demand, within seven (7) Banking Days of such
      demand;

            

    

     

    
      	
               
      

            	
              14.1.2

            	
              If
      the Borrower and/or any other Security Party fail to obtain and/or
      maintain the Insurances (as defined in Schedule II) or if any insurer in
      respect of such Insurances becomes entitled to cancel the insurances or to
      disclaim liability;

            

    

     

    
      	
               
      

            	
              14.1.3

            	
              If
      the Borrower and/or any other Security Party default in the due
      performance and/or observance of any covenant, term, obligation or
      undertaking under this Agreement and/or any of the other Security
      Documents (other than those referred to in sub-Clauses 14.1.1. and 14.1.2.
      hereinabove). In case such default is in the opinion of the Bank, capable
      of remedy, if it will continue unremedied for seven (7) Banking Days after
      its occurrence.

            

    

     

    14.2     Representations
incorrect

     

    If
any representation or warranty explicitly made or implied by or in respect of
the Borrower pursuant to the Security Documents proves to have been incorrect or
misleading in a material way when made or at any time during the currency of
this Agreement.

     

    14.3     Events
affecting the Borrower and/or any other Security Party

     

    
      	
               
      

            	
              14.3.1

            	
              If
      a creditor of the Borrower attaches or takes possession of, or a distress
      execution, sequestration or other process is levied or enforced upon or
      sued against the whole or any part of the property of the Borrower and/or
      any other Security Party and it is not discharged within fifteen (15)
      Banking days;

            

    

     

    
      	
               
      

            	
              14.3.2

            	
              If
      the Borrower and/or any other Security Party is found bankrupt or
      insolvent or any order is made by any competent court or resolution passed
      by the Borrower and/or any other Security Party or petition presented for
      the winding-up or dissolution of the Borrower and/or any other Security
      Party or for the appointment of a liquidator, trustee, receiver,
      administrator or conservator of any part of the undertakings, assets,
      rights or revenues of the Borrower and/or any other Security
      Party;

            

    

     

    
      	
               
      

            	
              14.3.3

            	
              If
      the Borrower and/or any other Security Party suspend payment of their
      debts or are (or are reasonably deemed to be) unable to or admit inability
      to pay their debts as they fall due or propose or enter into any
      composition or other arrangement for the benefit of creditors generally or
      proceedings are commenced in relation to the Borrower and/or any other
      Security Party relating to reconstruction or readjustment of
      debts;

            

    

     

    
      	
               
      

            	
              14.3.4

            	
              If
      a meeting is convened by any Security Party for the purpose of passing any
      resolution to purchase, reduce or redeem any of its share
      capital;

            

    

     

    
      	
               
      

            	
              14.3.5

            	
              If
      a material part of the undertakings, assets, rights or revenues of the
      Borrower and/or any other Security Party are seized, nationalised,
      expropriated or compulsorily acquired by or under the authority of any
      government;

            

    

     

    
      	
               
      

            	
              14.3.6

            	
              If
      any event occurs or proceeding is taken with respect to the Borrower
      and/or any other Security Party in any jurisdiction to which anyone of
      them is subject which has

            

    

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              an
      effect equivalent or similar to any of the events mentioned in Clauses
      14.3.1. to 14.3.5.;

            

    

     

    
      	
               
      

            	
              14.3.7

            	
              If
      the Borrower and/or any other Security Party suspend or threaten to
      suspend or cease to carry on its
business;

            

    

     

    
      	
               
      

            	
              14.3.8

            	
              If
      there occurs, in the opinion of the Bank, a materially adverse change in
      the financial condition of the Borrower and/or any Security
      Party;

            

    

     

    
      	
               
      

            	
              14.3.9

            	
              If
      any other event occurs not mentioned in this Clause 14.3. or circumstances
      arise which, in the reasonable opinion of the Bank, is likely adversely to
      affect either (i) the ability of the Borrower and/or any other Security
      Party to perform all or any of their obligations under or otherwise to
      comply with the terms of this Agreement and/or any of the other Security
      Documents, or (ii) the security created by this Agreement and/or any of
      the other Security Documents;

            

    

     

    
      	
               
      

            	
              14.3.10

            	
              If
      there is any change in the beneficial ownership of the shares in the
      Borrower and/or any other Security Party as declared to the Bank prior to
      the execution hereof or as represented to the Bank in the Certificate of
      beneficial shareholding given to the Bank pursuant to Schedule I, Part
      1.

            

    

     

    
      	
               
      

            	
              14.3.11

            	
              If
      any debt of any Security Party is not paid when due or any debt of any
      Security Party becomes due and payable prior to the date when it would
      otherwise have become due (unless as a result of the exercise by the
      relevant Security Party of a voluntary right of prepayment), or any
      creditor of an .y Security Party becomes entitled to declare its claim due
      and payable, or arty facility or commitment available to any Security
      Party is withdrawn, suspended or cancelled by reason of any default
      (however described) of such Security
Party;

            

    

     

    14.4     Events
affecting the Security Documents

     

    
      	
               
      

            	
              14.4.1

            	
              If
      this Agreement or any of the other Security Documents shall at any time
      and for any reason become invalid or unenforceable or otherwise cease to
      remain in full force and effect, or if the validity or enforceability of
      any of the Security Documents shall at any time and for any reason be
      contested by any party thereto (other than the Bank), or if any such party
      shall deny that it has any, or any further, liability thereunder or shall
      otherwise repudiate any of the Security Documents or do or cause or permit
      to be done any act or thing evidencing an intention to repudiate this
      Agreement or any of the other Security Documents or it becomes impossible
      or unlawful for the Borrower and/or any other Security Party to fulfill
      any of its covenants and obligations contained in this Agreement or any of
      the other Security Documents or for the Bank to exercise the rights or any
      of them vested in them thereunder or
otherwise;

            

    

     

    
      	
               
      

            	
              14.4.2

            	
              If
      any Encumbrance in respect of any of the properties (or part thereof)
      which belongs to the Security Parties (or any of them) becomes
      enforceable.

            

    

     

    
      	
               
      

            	
              14.4.3

            	
              If
      a notice is sent by the Bank under section 6(a) of the Master Swap
      Agreement, or by any person under section 6(b)(iv) of the Master Swap
      Agreement, in either case designating an Early Termination Date for the
      purpose of the Master Swap Agreement, or if the Master Swap Agreement is
      for any other reason terminated, cancelled, suspended, rescinded, revoked
      or otherwise ceases to remain in full force and effect;
  or

            

    

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    

     

    14.5     Events
concerning the Vessel

     

    
      	
               
      

            	
              14.5.1

            	
              if,
      due to Borrower’s default, any charter or contract of affreightment
      relating to the Vessel for the time being mortgaged to the Bank hereunder
      ceases for more than thirty (30) days (other than complete performance in
      accordance with its terms) to be in full force and
  effect.

            

    

     

    
      	
               
      

            	
              14.5.2

            	
              If
      the Vessel either:

            

    

     

    (a)           becomes
a Total Loss or

     

    (b)           suffers
damage or is involved in an accident which in the opinion of the Bank may result
in being subsequently considered to be a Total Loss or which may otherwise
reduce the security of the Bank.

     

    
      	
               
      

            	
              14.5.3

            	
              If
      the registration of the Vessel under the laws and flag of the Flag State
      is cancelled
      or terminated without the prior written consent of the
      Bank.

            

    

     

    
      	
               
      

            	
              14.5.4

            	
              If
      the Flag State of the Vessel becomes involved in hostilities or civil war
      if, in any such case, such event could in the opinion of the Bank
      reasonably be expected to have a material adverse effect on the security
      constituted by any of the Security Documents and Borrower fails to comply
      with the Bank’s request to change flag acceptable to the Bank within
      fifteen (15) Banking Days.

            

    

     

    14.6     Environmental
Events.

     

    If
the Borrower and/or any other Security Party and/or any other Relevant Party
and/or any of their respective Environmental Affiliates fails to comply with any
Environmental Law or any Environmental Approval or any of the Vessel or any
other Relevant Ship is involved in any incident which gives rise or which may
give rise to any Environmental Claim if, in any such case, such non-compliance
or incident, or the consequences thereof could, in the opinion of the Bank, be
expected to have a Material Adverse Effect on the business assets, operations,
property or financial condition of the Borrower or any other Security Party or
on the security created by any of the Security Documents.

     

    14.7     Consequences
of Default

     

    
      	
               
      

            	
              14.7.1

            	
              At
      any time after the occurrence of any Event of Default, the Bank may,
      without prejudice to any other of its
rights,

            

    

     

    
      	
               
      

            	
              (a)

            	
              by
      notice to the Borrower declare that the obligation of the Bank to make the
      Commitment available shall be terminated, whereupon the Commitment shall
      be reduced to zero forthwith and/or

            

    

     

    
      	
               
      

            	
              (b)

            	
              by
      notice to the Borrower declare that the Loan and interest and all sums
      payable under this Agreement and the other Security Documents have become
      due and payable, or payable on demand, whereupon the same shall
      immediately, or in accordance with the terms of such notice, become due
      and payable jointly and severally by the Borrower and the other Obligors,
      without any further demand protest or notice or any other procedure from
      the Bank,

            

    

     

    
      	
               
      

            	
              (c)

            	
              put
      into force and exercise all or any of the rights, powers and remedies
      possessed by it under this Agreement and/or under any other Security
      Document.

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              14.7.2

            	
              If
      an event occurs in respect of the Borrower or any of the other Security
      Parties of the type described in Clauses 14.3.2. to 14.3.6. the obligation
      of the Bank to make the Commitment available shall terminate immediately
      and all amounts under sub-clause 14.7.1.(b) above shall become immediately
      due and payable without the need for any demand from the Bank or any
      notice to the Borrower or other action of any kind
    whatsoever.

            

    

     

    15        APPLICATION OF
RECEIPTS

     

    15.1     Normal order of application.
Except as any Security Document may otherwise provide, any sums which are
received or recovered by the Bank under or by virtue of any Security Document
after the service of notice on the Borrower shall he applied:

     

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

     

    
      	
               
      

            	
              (i)

            	
              firstly,
      in or towards satisfaction pro rata of all amounts then due and payable to
      the Bank under the Security Documents and the Master Swap Agreement (in
      respect of Designated Transaction) other than those amounts referred to at
      (ii) and (iii) below;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Bank under the Security Documents and the
      Master Swap Agreement (in respect of Designated Transaction) (and, for
      this purpose, the expression “interest” shall include any net amount which
      the Borrower shall have become liable to pay or deliver under section 2(e)
      (Obligations) of the Master Swap Agreement (in respect of Designated
      Transaction) but shall have failed to pay or deliver to the Bank at the
      time of application or distribution under this Clause 15);
    and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              thirdly,
      in or towards satisfaction pro rata of the Loan and the Swap Exposure (in
      the case of the latter, calculated as at the actual Early Termination Date
      applying to each particular Designated Transaction, or if no such Early
      Termination Date shall have occurred, calculated as if an Early
      Termination Date occurred on the date of application or distribution
      hereunder);

            

    

     

    SECONDLY:
in retention of an amount equal to any amount not then due and payable under any
Security Document or the Master Swap Agreement (in respect of Designated
Transaction) but which the Bank, by notice to the Borrower and the Security
Parties, states in its reasonable opinion will or may become due and payable in
the future and, upon those amounts becoming due and payable, in or towards
satisfaction of them in accordance with the foregoing provisions of this Clause
15.1(a); and

     

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

     

    15.2     Variation of order of application.
The Bank may (following the occurrence of an Event of Default or a
Potential Event of Default which is continuing), by notice to the Borrower and
the Security provide for a different manner of application from that set out in
Clause 15.1 either as regards a specified sum or sums or as regards sums in a
specified category or categories.

     

    15.3     Notice of variation of order of
application. The Bank may give notices under Clause 15.2 from time to
time in respect of sums which may be received or recovered in the
future.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    

     

    15.4     Appropriation rights overridden.
This Clause 15 and any notice which the Bank gives under Clause 15.2
shall override any right of appropriation possessed, and any appropriation made,
by the Borrower or any Security Party.

     

    15.5     Application of Earnings -Payment of
Earnings. The Borrower undertakes with the Bank to ensure that,
throughout the Facility Period (and subject only to the provisions of the
General Assignment for the Vessel) all the Earnings of the Vessel are paid to
the Operating Account for the Vessel and subject to no Event of Default having
occurred which is continuing at the relevant time, all credit balances on the
Operating Account shall be freely available to the Borrower.

     

    16        ACCOUNTS

     

    16.1     Loan
Account

     

    The
Bank shall maintain in accordance with its usual practice, an account evidencing
the amounts from time to time lent by, owing to and paid to it under the
Security Documents. Such account confirmed by the Bank as per Clause 6 hereof
shall, be conclusive as to the amount from time to time owing by the Borrower
under the Security Documents.

     

    16.2     Set-off

     

    
      	
               
      

            	
              16.2.1

            	
              Upon
      the occurrence of any Event of Default, the Borrower authorises the Bank,
      without notice to the Borrower, to apply any credit balance to which the
      Borrower is then entitled and/or to whatever currency standing upon any
      such account of the Borrower with any branch of the in or towards
      satisfaction of the Indebtedness. For this purpose, the Bank is authorised
      to purchase with the moneys standing to the credit of such account such
      other currencies as may be necessary to effect such application. The Bank
      shall not be obliged to exercise any right given to it by this clause. The
      Bank shall notify the Borrower without delay upon the exercise or
      purported exercise of any right of set-off giving details in relation
      thereto.

            

    

     

    
      	
               
      

            	
              16.2.2

            	
              The
      rights conferred on the Bank by this Clause shall be in addition to, and
      without prejudice to or limitation of, the rights of netting and set off
      conferred on the Bank by the Master Swap Agreement. The Borrower
      acknowledges that the Bank shall be under no obligation to make any
      payment to the Borrower under or pursuant to the Master Swap Agreement if,
      at the time that payment becomes due, there shall have occurred an Event
      of Default or Potential Event of Default, or an Event of Default or
      Termination Event (as those terms are, respectively defined in the Master
      Swap Agreement).

            

    

     

    16.3     Operating
Account

     

    
      	
               
      

            	
              16.3.1

            	
              The
      Borrower undertakes with the Bank that it
will:

            

    

     

    
      	
               
      

            	
              (a)

            	
              on
      or before the Drawdown Date open with the Bank the Operating Account;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              procure
      that all moneys payable to the Borrower in respect of the Earnings cr
      other receivables regarding the Vessel shall, unless and until the Bank
      directs to the contrary be paid to the Operating Account free from
      Encumbrances (save for Encumbrances in favour of the Bank); Provided
      however that if any moneys paid to the Operating Account are payable in a
      currency other than Dollars, the Bank shall convert such moneys into
      Dollars at the Bank spot rate of exchange at the relevant time for the
      purchase of Dollars with such currency and the term “spot rate
      of

            

    

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              exchange”
      shall include any premium and costs of exchange payable in connection with
      the purchase of Dollars with such
currency.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Operating Account shall bear interest at the rate quoted by the Bank to
      its customers for comparable deposits in Dollars and for such periods as
      the Bank may determine, such interest to be credited to the Operating
      Account at intervals the Bank usually pays interest on
      deposits.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Borrower hereby assigns to the Bank as a continuing security for the
      payment of the Indebtedness the Operating Account and all moneys from time
      to time standing to the credit thereof including any interest from time to
      time accrued and accruing thereon, such assignment to take effect
      immediately upon the occurrence of an Event of
  Default.

            

    

     

    
      	
               
      

            	
              16.3.2

            	
              Withdrawals.

            

    

     

    So
long as no Default shall have occurred the Borrower shall be entitled to
withdraw from the Operating Account any amount. Provided however that if in the
opinion of the Bank there will be insufficient sums standing to the credit of
the Operating Account to meet principal falling due on the next Repayment Date
or interest due on the next Interest Payment Date or any other moneys which are
due and payable to the Bank, the Bank shall be entitled to refuse any withdrawal
from the Operating Account.

     

    
      	
               
      

            	
              16.3.3

            	
              Application
      of Operating Account

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Bank shall be entitled (but not obliged) at any time to deduct from the
      balance for the time being standing to the credit of the Operating Account
      all other moneys which may fall due to be paid to the Bank under the terms
      of the Security Documents or otherwise howsoever in connection with the
      Loan.

            

    

     

    
      	
               
      

            	
              (b)

            	
              At
      any time after the occurrence of an Event of Default, the Bank may,
      without notice to the Borrower, apply all moneys then standing to the
      credit of the Operating Account (together with interest from time to time
      accruing or accrued thereon) in or towards satisfaction of any sums due to
      the Bank under the Security Documents in the manner specified in Clause
      15.

            

    

     

    
      	
               
      

            	
              16.3.4

            	
              Relocation of
      Operating
      Account

            

    

     

    The
Borrower, at its own costs and expenses, undertake to comply with any written
requirement of the Bank from time to time as to the location or relocation of
the Operating Account and will from time to time enter into such documentation
as the Bank may require in order to create or maintain a security interest in
the Operating Ac count.

     

    16.4     Retention
Account

     

    
      	
               
      

            	
              16.4.1

            	
              The
      Borrower on or before the Drawdown Date will open with the Bank the
      Retention Account.

            

    

     

    
      	
               
      

            	
              (a)

            	
              For
      so long as any moneys are owing under the Security Documents, the Borrower
      shall pay to the Retention Account, at monthly intervals commencing with a
      first payment on the date falling one Month after the Drawdown Date and at
      monthly intervals thereafter (each such day being hereinafter called
      “Monthly Retention Date”) such sum (each sum being hereinafter called
      “Monthly Retention Amount”) as shall be the aggregate
  of:

            

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              i.

            	
              the
      quotient of the Repayment Instalment amount from time to time falling due
      on the each time next Repayment Date divided by the number of the months
      intervening between the immediately previous and the such next Repayment
      Date, pursuant to Clause 7 hereof;
and

            

    

     

    
      	
               
      

            	
              ii.

            	
              the
      quotient of the amount of interest from time to time falling due in
      respect of the Loan or each part thereof on the each time next Interest
      Payment Date divided by the number of months of the relevant Interest
      Period.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Bank is hereby irrevocably authorised by the Borrower to debit at every
      Monthly Retention Date the Operating Account with the Monthly Retention
      Amounts and to credit them to the Retention
  Account.

            

    

     

    
      	
               
      

            	
              (c)

            	
              In
      case that any Earnings paid to the Operating Account relate to a period of
      employment of the Vessel longer than one (1) Month, then upon receipt of
      such Earnings the Retention Account shall be funded by an amount equal to
      so many Monthly Retention Amounts or part thereof as shall correspond to
      the longer period to which the said Earnings relate or any amount as may
      be determined by the Bank.

            

    

     

    
      	
               
      

            	
              16.4.2

            	
              Unless
      and until there shall occur an Event of Default all Monthly Retenticn
      Amounts credited to the Retention Account together with interest from time
      to time accruing or at any time accrued thereon shall be set off and
      applied by the Bank (and express and irrevocable authority is hereby given
      by the Borrower to the Bank so to set off and apply the same) upon each
      Repayment Date and upon each Interest Payment Date in or towards payment
      of the Repayment Instalment then falling due and/or (as the case may be)
      the amount of interest then due. Each such set off and application by the
      Bank shall constitute a payment in or towards satisfaction of the
      corresponding payment obligations of the Borrower under this Agreement but
      shall be strictly without prejudice to the obligations of the Borrower to
      make any such payment to the extent that the aforesaid set off application
      by the Bank is insufficient to meet the
same.

            

    

     

    
      	
               
      

            	
              16.4.3

            	
              Any
      amount for the time being standing to the credit of the Retenticn Account
      shall bear interest at the rate quoted by the Bank to its customers fbr
      deposits in Dollars for such period as the Bank may determine and for an
      amount comparable with the amount for the time being standing to the
      credit of the Retention Account.

            

    

     

    
      	
               
      

            	
              16.4.4

            	
              Upon
      the occurrence of an Event of Default or at any time thereafter the Bank
      will set off and apply all sums standing to the credit of the Retention
      Account including accrued interest (if any) in the manner specified in
      Clause 15 without notice to the
Borrower.

            

    

     

    17        INDEMNITY

     

    17.1     Miscellaneous
Indemnities

     

    The
Borrower will indemnify the Bank against any and all expenses, claims, losses or
liabilities sustained or incurred by the Bank as a result of

     

    
      	
              (a)

            	
              The
      Loan not being drawdown hereunder whether before or after the giving of
      the Drawdown Notice in accordance with the provisions of Clause 2.2.
      hereof for any reason whatsoever including but not limited to the refusal
      of the Bank to allow the disbursement of
the

            

    

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    Commitment
because of the non fulfillment of the Conditions Precedent contained in Schedule
I or any of them;

     

    
      	
              (b)

            	
              any
      default in payment by the Borrower of any sum under any of the Security
      Documents;

            

    

     

    
      	
              (c)

            	
              the
      occurrence of any other Event of
Default;

            

    

     

    
      	
              (d)

            	
              the
      prepayment or repayment of the Loan or part thereof being made otherwise
      than on an Interest Payment Date relating to the part of the Loan prepaid
      or repaid.

            

    

     

    including
in any such case, but not limited to, any loss or expense suffered as a result
of reemploying deposits acquired by the Bank (or any person to whom the Bank
have sold a participation in the Loan) for the purpose of funding the Loan at a
rate of return lower than the cost of acquiring the deposits or any expense
incurred by the Bank (or such person) in liquidating the deposits as defined as
“Break Costs” in Clause 1 hereof.

     

    17.2     Currency

     

    If,
any payment by any of the Security Parties under any of the Security Documents
is made or falls to be satisfied in a currency (the “payment currency”) other
than the currency in which such payment is due under or in connection with such
Security Documents (the “contractual currency”), then, to the extent that the
amount of such payment actually received by the Bank, when converted into the
contractual currency at the rate of exchange, falls short of the amount due
under the Security Documents, the Borrower, as a separate and independent
obligation, shall indemnify and hold harmless the Bank against the amount of
such shortfall. For the purposes of the present Clause “rate of exchange” means
the rate at which the Bank is able on or about the date of such payment to
purchase the contractual currency with the payment currency and shall take into
account any premium and other costs of exchange with respect
thereto.

     

    17.3     Environmental
Indemnity

     

    The
Borrower shall indemnify the Bank on demand and hold the Bank harmless from and
against all costs, losses, liabilities, actions, proceedings, penalties, fines,
sanctions or other outgoings of whatever nature which may be suffered, or
asserted against the Bank at any time, whether before or after the repayment in
full of principal and interest under this Agreement, relating to, or arising
directly or indirectly for any cause or reason whatsoever out of an
Environmental Claim made or asserted against the Bank if such Environmental
Claim would not have been made or asserted against the Bank if it had not
entered into any of the Security Documents and/or exercised any of its rights,
powers and discretions thereby conferred and/or performed any of its obligations
thereunder and/or been involved in any of the transactions contemplated by the
Security Documents.

     

    17.4     Communications
Indemnity

     

    Express
authority is hereby given by the Borrower to the Bank to accept (at the sole
discretion of the Bank) all tested or untested communications given by
facsimile, telex cable or e-mail, regarding any or all of the notices, requests,
instructions or other communications under this Agreement.

     

    The
Borrower hereby assumes promises and recognises that the Bank shall not be held
responsible for any loss, liability or expense that may result from the Bank’s
compliance with such communications and the Borrower undertakes to indemnify the
Bank from all actions, proceedings, damages, claims, expenses and any and all
direct and/or indirect losses which the Bank may suffer, by reason of the Bank
following such communications.

     

    With
regard to the above communications issued by electronic and/or mechanical
processes (e.g. by facsimile, telex or e-mail), the risk of equipment
malfunction, including, without limitation, paper

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    shortage,
transmission errors, omissions and distortions of Borrower’s mechanical
equipment is assumed fully and accepted by the Borrower.

     

    The
risks of misunderstandings and errors of communications being given as mentioned
above, are for the Borrower and the Bank will be indemnified in full pursuant to
this Clause.

     

    Notwithstanding
the above, the Bank may at any time, (and such discretion of the Bank is
expressly admitted by the Borrower hereby) refuse to execute the notices,
requests. instructions or communications of the Borrower, or any part thereof
given by telex or fax if not confirmed in a manner acceptable to the Bank,
without incurring any responsibility for loss, liability or expense arising out
of such refusal.

     

    18        REMEDIES AND
WAIVERS

     

    18.1     Remedies
Modifications

     

    The
Borrower shall not be released from the obligations contained herein by the
granting of time or any other indulgence to the Borrower or by any other act or
thing whatsoever or whereby the Borrower is and has been so released and no
failure to exercise nor any delay in exercising on the part of the Bank any
right or remedy hereunder and/or the other Security Documents or by law shall
operate as a waiver thereof nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise thereof or the exercise of
any other rights or remedy. No modification or waiver by the Bank of any
provision of this Agreement or of any of the other Security Documents nor any
consent by the Bank to any departure therefrom by the Borrower shall be
effective unless the same shall be in writing and then shall only be effective
in the specific case and for the specific purpose for which given. No notice to
or demand on any such party in any such case shall entitle such party to any
other or further notice or demand in similar or other
circumstances.

     

    18.2     Cumulative
Remedies

     

    The
rights and remedies provided herein and/or in any other Security Document are
cumulative and not exclusive of each other nor of any other rights or remedies
provided by law.

     

    18.3     Event
of Default

     

    The
Borrower accepts that upon an Event of Default occurring the Bank has an
absolute right to take immediate steps to realize its security and recover all
and any sums due to it (including but not limited to the Loan remaining
outstanding and any other moneys which may then be due and owing under this
Agreement and/or any of the other Security Documents) exercising all powers
available to it by law and/or set forth in the Security Documents or otherwise
and nothing contained in the Security Documents shall be construed to the
contrary.

     

    19        LEGAL
IMMINENCE

     

    This
Agreement and the other Security Documents contain the entire agreement of the
parties and their provisions supersede the provisions of the Commitment Letter
addressed by the Bank to the Borrower and others (save for the provisions
thereof which relate to fees) and any and all other prior correspondence and
oral negotiation by the parties in respect of the matters regulated by this
Agreement.

     

    19.1     Over
Other Security Documents

     

    In
the event of any inconsistency between the provisions of this Agreement and the
previsions of any other Security Document the provisions of this Agreement shall
prevail.

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    

     

    19.2     Contracts
(Rights of Third Parties) Act 1999

     

    Notwithstanding
the provisions of the: Contracts (Rights of Third Parties) Act 1999, no term of
this Agreement is enforceable by a person who is not a party to it.

     

    20        COUNTERPARTS

     

    This
Agreement may be executed in any number of counterparts each of which when
executed and delivered shall constitute an original but all the counterparts
shall together constitute both one and the same instrument.

     

    21        INVALIDITY

     

    If
at any time any one or more provisions of any Security Document and/or any
Security Document or any other documents executed pursuant hereto or thereto is
or becomes invalid illegal or unenforceable in any respect under any applicable
law in any jurisdiction whatsoever, the validity legality and enforceability of
the remaining previsions hereof or thereof shall not in any way be affected or
impaired thereby. If, however, this event becomes known to the Bank prior to the
drawdown of the Commitment the Bank shall be entitled to refuse drawdown until
this discrepancy is remedied. Where, however, the provisions of any such
applicable law may be waived, they are hereby waived by the parties hereto to
the full extent permitted by that law to the intent that this Agreement, the
other Security Documents and any other documents executed pursuant hereto or
thereto shall be deemed to be valid binding and enforceable in accordance with
their respective terms.

     

    22        ASSIGNMENT

     

    This
Agreement shall constitute continuing and primary obligations of the Borrower
and shall be binding on and inure to the benefit of the Borrower the Bank and
their respective successors and assigns provided that:

     

    22.1     Assignment
by the Borrower

     

    The
Borrower and any other parties to the Security Documents may not assign any
rights and/or obligations hereunder and/or any other Security Document or any
documents executed pursuant thereto without the prior written consent of the
Bank and

     

    22.2     Assignment
by the Bank

     

    The
Bank may at any time assign, transfer or offer participations to any affiliated
company of the EFG Group or, with the prior written consent of the Borrower,
such consent not to be unreasonably withheld, to other banks or financial
institutions in whole or in part, or in any manner dispose of all or any of its
rights and/or obligations arising or accruing under this Agreement or under any
of the other Security Documents or any documents executed pursuant to this
Agreement and/or the other Security Documents. The Bank may disclose to a
potential assignee, transferee or participant or to any other person who may
propose entering into a contractual relations with the Bank in relation this
Agreement such information about the Borrower and the Security Parties as the
Bank shall reasonably consider appropriate.

     

    23        EXPENSES

     

    
      	
              (a)

            	
              The
      Borrower shall reimburse the Bank immediately upon demand for all expenses
      including but not limited to the fees and expenses of the Legal Counsels
      of the Insurance Experts and/or

            

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              any
      other Experts the Bank may use e.t.c. as well as all legal fees and
      disbursements printing costs and other out of pocket expenses of
      whatsoever nature incurred by the
Bank

            

    

     

    
      	
               
      

            	
              (i)

            	
              in
      the negotiation preparation execution and where relevant registration of
      any of the Security Documents and of any amendment or extension of or
      granting of any waiver or consent hereunder and/or any other Security
      Document

            

    

     

    
      	
               
      

            	
              (ii)

            	
              in
      contemplation of, or the enforcement of or preservation of any rights
      under any of the Security Documents or otherwise in respect of moneys
      owing under any of the Security
Documents

            

    

     

    
      	
               
      

            	
              (iii)

            	
              all
      fees and expenses payable pursuant to the present Clause shall be paid
      together with value added tax or any other tax (if any) properly
      chargeable thereon. Any value added tax or other tax chargeable in respect
      of any services supplied by the Bank under this Agreement shall be paid in
      addition to any sum agreed to be paid
hereunder.

            

    

     

    
      	
              (b)

            	
              The
      Borrower shall pay all Taxes, the Security Documents are or at any time
      may be subject and shall indemnify the Bank against any liabilities costs
      claims arid expenses resulting from any omission to pay or delay in paying
      any such duties levies, dues and/or
taxes.

            

    

     

    23.2     If
the Bank pays any of the amounts mentioned above as payable by the Bank, the
Borrower shall reimburse same to the Bank together with interest at the rate
referred to in Clause 8.4. from the date of Bank’s actual disbursement or loss
to the date of payment to the Bank. The expenses are payable on
demand.

     

    24        NOTICE

     

    24.1     Address

     

    Each
notice, request, demand or other communication to be given or made hereunder
and/or any other Security Document shall be given in writing addressed to the
Borrower c/o Eurobulk Ltd. at 40, Agiou Konstantinou Str., 151 24 Maroussi,
Greece, fax no 0030 2111 804097 who is hereby irrevocably appointed by the
Borrower as Its agent and who is empowered by it to receive and take delivery on
Borrower’s behalf and account all documents and/or instruments addressed to the
Borrower of whatever nature, and the Borrower hereby confirms and warrants that
all such notifications, notices, or other communications e.t.c. delivered to its
above agent will be considered by it as having been delivered to and received by
itself. All such notifications notices, requests, demands or other
communications if addressed to the Bank shall be delivered or mailed to the Bank
at No 83, Akti Miaouli Street, Piraeus Greece or to such other address as is
notified by one party to the other party hereunder in writing.

     

    24.2     Time
of Delivery

     

    Any
notice, request, demand or other communication to be given or made to the
Borrower shall be deemed to have been delivered three (3) Banking Days after
having been sent to its agent appointed by them in the preceding Clause, by
first - class registered post prepaid in an envelope addressed as aforesaid but
in the case of a telex facsimile transmission or other means of
telecommunication in permanent written form or delivery by hand, such notice
shall be deemed to have been delivered at the time of dispatch. If the day of
dispatch is not a Banking Day it shall be deemed to have been received at the
opening of business on the next such Banking Day.

     

    
      25        GOVERNING LAW AND
JURISDICTION

       

      
        	
                (a)

              	
                This
      Agreement and the Security Documents unless otherwise provided for herein,
      shall be governed by and construed in accordance with English Law. The
      Mortgage shall be governed by the law of the Flag State of the Vessel. The
      Pledges, the Corporate Guarantee shall be governed by the laws of
      Greece

              

      

       

    

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    

    
      	
              (b)

            	
              For
      the exclusive benefit of the Bank, the Borrower hereby irrevocably submits
      itself to the non-exclusive jurisdiction of the Courts of England.
      Further, the Borrower agrees that any summons, writ or other legal process
      issued against any of the Security Parties either in England or Greece or
      in any other country as the case may be, shall be served upon the Borrower
      in Greece c/o Hill Taylor Dickinson at 2, II Merarchias Street 185 35
      Piraeus Greece, fax no 0030 210 4284777), or in England c/o Messrs Hill
      Taylor Dickinson at Irongate House, Duke’s Place, London EC3A 7LP, England
      or to their successors, who are hereby authorised by the Borrower, acting
      on its own behalf to accept such service, which shall be deemed to be good
      service on the Borrower. The foregoing shall not limit the right of the
      Bank to start proceedings in any other country or to serve process in any
      other manner permitted by law. The Borrower hereby waives any objections
      as to the inconvenience of any forum elected by the
  Bank.

            

    

     

    
      	
              (c)

            	
              If
      it is decided by the Bank that any such proceedings should be commenced in
      any other country, then any objections as to the jurisdiction or any claim
      as to the inconvenience of the forum is hereby waived by the Borrower all
      of whom the Borrower confirms that they are representing and binding, and
      it is agreed and undertaken by the Borrower to accept service of legal
      process and not to contest the validity of such proceedings as far as the
      jurisdiction of the court or courts involved is
  concerned.

            

    

     

     

     

     

    
 

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    

    Schedule
I

    Documents
and evidence required as conditions precedent to the Loan being
made

     

     

    Part
1

     

    
      	
              (a)

            	
              Constitutional
      documents

            

    

     

    copies,
legalized by a lawyer and certified by an officer of the Borrower as true,
complete and up to date copies of all documents which contain or establish or
relate to the constitution and organization of the Borrower and of any corporate
shareholder of the Borrower. In case of a Liberian or Marshall Island Company,
copies of

     

    
      	
               
      

            	
              (i)

            	
              the
      transfer of subscription

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Organizational Meeting

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      first Meeting of Directors

            

    

     

    
      	
               
      

            	
              (iv)

            	
              all
      resolutions regarding election and resignation of Directors (if any) from
      the first meeting till today.

            

    

     

    
      	
              (b)

            	
              Corporate
      authorisations

            

    

     

    copies
of the relevant minutes containing the resolutions of the directors and
shareholders of each Security Party approving the Security Documents to which
such Security Party is, or is to be, party and authorizing the signature,
delivery and performance of such Security Party’s obligations thereunder, as
well as copies of the resolutions of the Corporate Shareholders to participate
at the relative meeting of the shareholders of the respective Security Party.
All copies of the meetings and resolutions of the Directors and Shareholders of
each such Security Party to be certified (in a certificate dated not earlier
than five Banking Days prior to the date of this Agreement) by the Secretary of
such Security Party as:

     

    
      	
               
      

            	
              (i)

            	
              being
      complete true and correct;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              being
      duly passed at meetings duly convened and held of the directors of such
      Security Party where the directors were present in person at arid
      throughout the said meetings and the resolutions were passed
      unanimously;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              not
      having been amended, modified or revoked;
and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              being
      in full force and effect

            

    

     

    and
duly notarised and legalised by the appropriate consul as well as the originals
or certified copies of any Powers of Attorney issued by any Security Party
pursuant to such resolutions duly notarised and legalized by the appropriate
consul.

     

    
      	
              (c)

            	
              Official
      Certificates of Good Standing of the
Borrower.

            

    

     

    
      	
              (d)

            	
              Certificate of Incumbency:
      a list of directors and officers of each Security Party and of
      every corporate shareholder specifying the names and positions of such
      persons, certified (in a certificate dated not earlier than five Banking
      Days prior to the date of this Agreement) by an appropriate government
      authority, or if this is not possible, by the Secretary of such Security
      Party, or of the corporate shareholder to be true, complete and up to date
      and duly notarised and legalised by the appropriate
  consul.

            

    

     

    
      	
              (e)

            	
              A
      certificate, on behalf of the Borrower, by a Director having been
      authorised to execute same, on which the documents mentioned sub-sections
      (a), (b), (c), (d) and (e) of this Part 1 of Schedule I will have been
      attached, reading substantially as
follows:

            

    

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    CERTIFICATE

     

    I,
the undersigned, _______________the Secretary of (name of the Borrower or of the
other Security Party) __________________ (“the Company”), a company duly
organized and existing under the laws of __________hereby certify
that:

     

    
      	
              1.

            	
              Attached
      hereto and marked “A” is a true and complete copy of the Articles of
      Incorporation and of all documents relating to the constitution of the
      Company (and of all amendments thereof) which are in full force and effect
      as of the date hereof.

            

    

     

    
      	
              2

            	
              Attached
      hereto and marked “B” is a true and complete copy of the Minutes of a
      Meeting of the Directors of the Company held in ___________ on the
      ________ day of _______ 2007 at which Meeting all the Directors of the
      Company were present in person and acted throughout and the Resolutions
      passed at the Meeting were passed unanimously and have not been varied or
      revoked and remain in full force and effect as of the date
      hereof.

            

    

     

    
      	
              3.

            	
              Attached
      hereto and marked “C” is a true and complete copy of the Minutes of the
      meeting of the Shareholders of the Company held in ___________ on the ___
      day of ________ 2007 at which meeting bearer share certificates
      representing all of the authorised and issued shares of the Company were
      tabled and voted throughout by the holders thereof (or, as the case may
      be, the registered shareholders of all of the authorised and issued shares
      of the Corporation were present in person or by proxy and acted
      throughout) such meeting having been convened and notice thereof having
      been duly waived by all persons entitled thereto and the Resolutions
      passed at such meeting remain in full force and effect and unamended as of
      the date hereof.

            

    

     

    
      	
              4.

            	
              Attached
      hereto marked “D” is a true and complete copy of the Power of Attorney
      approved by the Directors and Shareholders of the Company at the Meetings
      described in paragraphs, 2 and 3 above, a copy of which Power of Attorney
      has been attached to the Minutes of the said
  Meetings.

            

    

     

    
      	
              5.

            	
              The
      Directors and Officers of the Company are, as at the date hereof, and
      were, as at the date of the Meeting of the Directors, the following, being
      all the Directors and Officers of the
Company:

            

    

     

    
      	 
      	 
      	
              Director/President

            
	 
      	 
      	
              Director/Secretary

            
	 
      	 
      	
              Director/Treasurer

            

    

    

     

    
      	
              6.

            	
              The
      legal shareholder(s) of the Company is/are, as the date hereof, and
      was/were, as at the date of the Meetings of the Directors and
      shareholders, that referred to in the copy of the Minutes of the Meeting
      of Shareholders attached hereto and marked
C.

            

    

     

    
      	
              7.

            	
              The
      name, title and specimen signature of each person who has executed or will
      execute any of the Security Documents (as such term is defined in the Loan
      Agreement referenced in the Resolutions certified in item 2 above) and/or
      any other document incidental hereto and thereto on behalf of our Company
      are as set forth below, and each such person is on the date hereof and
      thereunto duly authorised.

            

    

     

    
      	
              Name
      and Title

            	 
      	
              Specimen
      Signature

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    

    
      	 
      	 
      	 
      

    

    
      	
              8.

            	
              I
      confirm that I am duly authorised by the Company to execute this
      certificate. If any certification contained herein ceases to be true and
      correct at any time prior to the execution and delivery of the
      documentation referenced in the Resolutions in paragraph 2 above, I will
      immediately give to the Bank notice to that
  effect.

            

    

     

    All
terms defined in the Loan Agreement and used but not defined herein have the
meanings given to them in such Agreement.

     

    IN
WITNESS WHEREOF, this certificate has been executed on and as of __________
2007

     

    
      	 
      	
              (name
      of the Security Party)

            
	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	
              Title:

            	 
      
	 
      	 
      

    

    

    
      	
              (f)

            	
              Opinions

            

    

     

    an
opinion on the validity of the Security Documents addressed to the Bank by
special legal advisers approved by it and having particular knowledge of the
national law by which the validity of the relative Security Document may be
affected.

     

    
      	
              (g)

            	
              Further
      opinions

            

    

     

    an
opinion of the legal adviser to the Borrower as to all matters of law as the
Bank shall deem relevant to the Loan Agreement as it may require.

     

    
      	
              (h)

            	
              Borrower’s
      process agent

            

    

     

    a
copy, certified as a true copy by the Borrower’s solicitors of a letter from the
Borrower’s agent for receipt of service of proceedings accepting its appointment
under the Security Documents in which it is or is to be appointed as such agent;
and

     

    
      	
              (i)

            	
              Insurance
      Opinion

            

    

     

    an
opinion from insurance consultants approved by the Bank, on the insurances
effected in respect of the Vessel.

     

    
      	
              (j)

            	
              Arrangement
      Fee

            

    

     

    Evidence
that the Arrangement Fee has been paid in full up to the date.

     

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    
 

    Documents and evidence
required as conditions precedent and (where the context permits)
subsequent.

     

    Part 2

    Evidence
concerning the Vessel

     

    
      	
              (a)

            	
              Charter
      free valuation and preparation of insurance report of the Vessel as at the
      date determined by the Bank prior to the drawdown prepared on the basis
      specified in the Agreement.

            

    

     

    
      	
              (b)

            	
              Evidence
      that the Vessel has been duly registered in the ownership of its owner
      under the laws and flag of its shipping registry free from any
      Encumbrances (including those on its earnings, insurances, charter rights
      and requisition compensation) save for those in favour of the Bank and
      that the Mortgage on the Vessel has been recorded in the respective
      Registry with first priority.

            

    

     

    
      	
              (c)

            	
              Evidence
      that the Vessel has been surveyed at the cost of the Borrower by surveyors
      appointed and/or approved by the Bank and a copy of the surveyors’ report
      has been delivered to it.

            

    

     

    
      	
              (d)

            	
              Certificate
      of Confirmation of Class for hull and machinery confirming that the Vessel
      is classed in the highest Class of a Classification Society acceptable to
      the Bank and remains free of recommendations notations affecting class.
      The Bank should be notified of the Classification Society with which the
      Vessel will be or is (as the case may be) classed at least fifteen days
      prior to the Drawdown Date.

            

    

     

    
      	
              (e)

            	
              Due
      authorisation enabling the Bank to obtain copies of class records or other
      information at its discretion from the Classification Society regarding
      the Vessel and a confirmation from the classification Society that it will
      forward to the Bank all the quarterly listings issued in respect with that
      Vessel’s condition.

            

    

     

    
      	
              (f)

            	
              Photocopies
      of the Vessel’s current and unexpired trading
  certificates.

            

    

     

    
      	
              (g)

            	
              Evidence
      that the Vessel has been or will -on drawdown- be insured in accordance
      with the insurance requirements provided for in the Schedule of this
      Agreement with Underwriters, Insurance Companies, P & I and War Risks
      Associations which meet with the approval of the Bank. Such evidence shall
      include Hull and Machinery Marine risks full cover notes, stating all
      terms and conditions listing the security involved and incorporating the
      Loss Payable Clause and in the case of War Risks and Protection and
      Indemnity cover the Certificate of Entry and/or cover notes if
      appropriate.

            

    

     

    
      	
              (h)

            	
              Letters
      of Undertaking for the Vessel acceptable to the Bank and issued by Hull
      and Machinery brokers and/or War Risks Associations or brokers and
      Protection & Indemnity Associations approved by the Bank for the
      Vessel acceptable to the Bank.

            

    

     

    
      	
              (i)

            	
              Certified
      true photocopies of any charterparty or other contract of employment of
      the Vessel which will be in force on the Drawdown
  Date.

            

    

     

    
      	
              (j)

            	
              Certified
      true photocopies of the management agreement relating to the Vessel and
      the Manager’s Undertaking duly executed by the Manager confirming that it
      will throughout the Facility Period manage the Vessel on behalf of its
      Owner and subordinate all its rights against the Owner or the Vessel to
      those of the Bank.

            

    

     

    
      	
              (k)

            	
              Evidence
      that the Manager and the Vessel has obtained certification of compliance
      with ISM Code and/or ISPS Code.

            

    

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    

     

    
      	
              (l)

            	
              Documentary
      evidence as to the light displacement tonnage of the
    Vessel.

            

    

     

    
      	
              (m)

            	
              Confirmations
      by the Insurers of the Vessel addressed to the Bank that they will issue
      letters of undertaking and endorse notices of assignment and loss payable
      Clauses on the Insurances, as soon as they receive the respective notices
      of assignment.

            

    

     

    
      	
              (n)

            	
              As
      a condition subsequent authenticated copy of a Transcript of Registry
      issued by the Registrar of Ships proving the registration of the Vessel in
      the ownership of the Borrower and the recording of the Mortgage on first
      priority. Such evidence must be produced to the Bank not later than three
      (3) Banking Days after the Drawdown
Date.

            

    

     

    

     

    

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    

     

    Schedule
II

    INSURANCE
REQUIREMENTS

     

    A.   
  PREAMBLE

     

    This
Schedule is an integral part of the above Agreement to which it is attached. All
the terms and conditions hereinbelow and/or any other provision concerning
Insurance in any Clause of the Security Documents form the Insurance
requirements thereof.

     

    All
the words and expressions used in this Schedule shall have the meaning stated in
the Agreement and the following expressions shall be interpreted as
follows:

     

    “Approved Brokers”: Insurance
Broker(s) and/or firm of Insurance Brokers, appointed by the Owner, as may from
time to time be approved by the Bank in writing and/or appointed by the Bank for
the purposes of this Agreement;

     

    “Excess Risks”: The proportion
(if any) of claims for general average, salvage and salvage charges and under
the standard collision clause which will not be recoverable, in consequence of
the value at which the Vessel is assessed for the purpose of such claims
exceeding its insured value;

     

    “Insurances”: All the policies
and contracts of insurance as set forth under paragraph B hereinbelow which are
taken out or entered into by or for the benefit of the Owners (whether in the
sole name of the Owners or, if required by the Bank, in the joint names of the
Owners and the Bank) in respect of the Vessel and its earnings or otherwise
howsoever in connection with the Vessel and all benefits of such policies and/or
contracts (including all claims of whatsoever nature and return of
premiums);

     

    “Insurers” means the
underwriters or insurance companies with whom any insurance is effected and the
associations of any protection and indemnity, FD & D or war risks or the
managers of such associations in which the Vessel may at any time be entered. Al
Insurances must be contracted with Insurers approved by the Bank;

     

    “Loss Payable Clause”: The
provisions regulating the manner of payment of sums receivable under the
Insurance which are to be incorporated in the relevant insurance document, such
Loss Payable Clauses to be in the forms set out in Paragraph D (1) hereinbelow,
or such other form as may from time to time be approved in writing by the
Bank;

     

    “Owners”: The owners of the
Vessel referred to in the Loan Agreement as Borrower;

     

    “Protection and Indemnity Risks”:
The usual risks covered by a Protection and Indemnity Association
(whether actually covered by Protection & Indemnity Association(s) and/or
underwriters) and/or insurance companies), including the proportion (if any)
which is not recoverable in the case of collision under the standard collision
clause;

     

    “Required Amount” means the
aggregate of the insured amounts on the Vessel referred to in the Loan
Agreement, which Required Amount can not be less than 120 per cent of the amount
of the Loan;

     

    “War Risks”: Risks including
the risk of mines and all risks excluded from the standard form of marine policy
by the free of capture and seizure clause;

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    

     

     

    B.        INSURANCES TO BE EFFECTED AND
MAINTAINED

    

    The
Insurance must be effected and maintained according to the provisions of the
Loan Agreement, including this Schedule and the risks set forth in this as
follows:

     

    a.         Hull
and Machinery

    Insurance
against fire and usual marine risks (including Excess Risks if so required by
the Bank) on an agreed value basis, on a full cover and all risks basis
according to English or American or similar Hull Clauses, for the Required
Amount, with such reasonable deductible and upon such terms as shall from time
to time be approved in writing by the Bank;

     

    b.        
Increased Value

    (if
required by the Bank) Insurance of increased value (Total Loss only, Excess
Liabilities included) as per the applicable English or American Institute
Clauses or similar clauses (Disbursement/Increased Value/Excess Liabilities) up
to an amount no less than the Required Amount, as shall from time to time be
approved in writing by the Bank;

     

    c.         War
Risks

    Insurance
against War Risks according to London Institute War Clauses or similar, on an
agreed value basis, for the Required Amount upon such terms as shall from time
to time be approved in writing by the Bank, attaching also the so-called War
Protection and Indemnity Clauses. If not fully covered by these insurances, crew
war liabilities insurance shall have to be effected separately;

     

    d.        
Protection and Indemnity

    Insurance
against Protection and Indemnity Risks for the full value and tonnage of the
Vessel insured (as approved in writing by the Bank) in accordance with the
relevant Rules/Protection and Indemnity Institute Clauses and deductibles
provided thereof and/or agreed for all risks including Pollution with Excess
Liability insured by P&I Club(s) and/or underwriter(s) and/or insurance
company(ies) approved in writing by the Bank. No risks will be excluded and no
deductibles provided for in the rules and/or agreed will be altered, without the
written consent of the Bank having been previously obtained. If crew liabilities
(inductively, loss of life, injury or illness) have been excluded from the
insurance cover or insured on a deductible excess basis, such liabilities shall
be further insured separately with other underwriters, always acceptable to the
Bank and upon such terms as shall from time to time be approved in writing by
the Bank;

     

    e.       
 Pollution Liability

    Supplementary
insurance of oil pollution liability including full cover of pollution risks for
the amount up to the maximum commercially available limit and upon such terms as
shall be commercially available and approved in writing by the
Bank;

     

    f.      
   USA Pollution Risk

    Supplementary
insurance of oil pollution liability (in the event the Vessel insured is
scheduled to operate within or nearby USA jurisdiction) for an amount and upon
such terms as shall from time to time be approved in writing by the
Bank;

     

    g.        
FD & D Cover

    Insurance
of Freight, Demurrage and Defence upon such terms and conditions as shall from
time to time be approved in writing by the Bank;

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    

     

    h.       
 Mortgagee’s Interest

    Insurance
of the mortgagee’s interest, to be effected and maintained by the Bank, in the
name of the Bank, but at the expenses of the Owner, or Borrower including (if
required by the Bank at its sole discretion) Mortgagee’s Asset Protection
(Pollution) coverage and/or additional perils pollution in the event the Vessel
insured trades in the United States waters or in the Exclusive Economic Zone of
the United States (as such term is used in the United States Oil Pollution Act
of 1990) or other similar insurance in respect of any pollution claim(s) against
such Vessel insured, for the Required Amount, calculated at the last Interest
Payment Date, under the “german wording” or similar, for 360 days (or less) or
upon such terms as shall from time to time be determined by the
Bank;

     

    i.       
  Other

    Insurance
of such other matters of whatsoever nature and howsoever arising in respect of
which the Bank would at any time reasonably require the Vessel to be
insured;

     

    j.       
  Port
Risks

    (in
the event the Vessel insured is laid up for an extended period) Insurance
effected and maintained with prior written consent of the Bank instead of the
insurances required under the provisions of sub-clauses a, e, f, and k above,
against Hull and Machinery Risks, Protection and Indemnity Risks, subject to the
conditions of “Institute Time Clauses Hulls, Port Risks”, or similar, including
War Risks subject to the conditions of “Institute War and Strikes Clauses,
Hulls, Time”, or similar, extended to include War Protection and Indemnity Risks
or other such similar insurance clauses or contact the terms of which shall be
approved in writing by the Bank.

     

    C.         TERMS AND OBLIGATIONS FOR
EFFECTING AND MAINTAINING INSURANCES

     

     

    It
is hereby undertaken by the Owner and/or any other person which is obliged under
the Security Documents, that until all moneys payable to the Bank (whether
actually or contingently) pursuant to the Loan Agreement and the other Security
Documents have been paid in full, the Owner shall comply with the following
undertaking:

     

    

    1.           To
effect and maintain at all timers the Insurances in form and substance and under
terms satisfactory to the Bank.

     

    2.           To
effect the Insurances in Dollars or such other currency as the Bank may approve
and through the Approved Brokers (other than the said mortgagee’s interest
insurance which shall be effected through brokers nominated by the Bank) and
with such Insurers as shall from time to time be appointed and/or be approved in
writing by the Bank.

     

    3.           To
effect and maintain the Insurances free of cost and expense to the Bank in the
sole name of the Owner or, if so required by the Bank, in the joint names of the
Owner and the Bank (but without liability on the part of the Bank for premiums
or calls).

     

    4.           Unless
otherwise agreed in writing by the Bank, the amount in respect of which the
Insurances should be effected shall be equal to at least the market value of the
Vessel and shall at least be 120% of the amount of the Loan and the Swap
Exposure.

     

    5.           Any
person which is obliged under the Loan Agreement to which these Insurance
Requirements are attached to effect and maintain the Insurances, it will be
obliged and hereby

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    undertakes,
jointly and severally with any other person having the same obligation to (and
will ensure that the Owner, if they are different persons shall)

     

    
      	
              (a)

            	
              procure
      and ensure that the Approved Brokers and/or Insurers as the case may be,
      shall send to the Bank a Letter of Undertaking in respect of the
      Insurances in form and substance satisfactory to the Bank and a Notice of
      Cancellation as per Paragraph D hereinbelow. Said Letter of Undertaking
      shall be in accordance with the form recommended by Lloyd’s Insurance
      Brokers Committee, or any subsequent LIBC form, or any other similar form,
      which is approved by the Bank and shall include a further undertaking to
      give immediate notice of any insurance being subject to the Condition
      Survey Warranty (J.H. 115) and/or structural Conditions Warranty (J.H.
      722) and/or the Classification Clause (Hulls) dated 29/6/89, fifteen days
      prior to the attachment date of any insurance bearing any of these
      warranties, or in such shorter time as the Bank may
  agree.

            

    

     

    
      	
              (b)

            	
              If
      any of the Insurances form part of a fleet cover, procure that the Vessel
      shall be considered by insurers as separately insured and further procure
      that the Approved Brokers and/or Insurers as the case may be, shall
      undertake to the Bank that they shall neither set off against any claims
      in respect of the Vessel any premiums due in respect of other vessels
      under such fleet cover or any premiums due for other insurances, nor
      cancel the insurance of the Vessel for reason of non-payment of premiums
      for other vessels under such fleet cover or of premiums for such other
      insurances, and shall undertake to issue a separate policy in respect of
      the Vessel if and when so requested by the
Bank;

            

    

     

    
      	
              (c)

            	
              punctually
      pay all premiums, calls, contributions or other sums payable in respect of
      all Insurances and produce all relevant receipts and details or other
      evidence of payment when so required by the
  Bank;

            

    

     

    
      	
              (d)

            	
              notify
      the Bank of the names of the brokers and/or all of the Insurers proposed
      to be employed by the Owners for the purposes of the renewal of such
      Insurances and of the amounts and terms in which such Insurances are
      proposed to be renewed and the risks to be covered at least twenty one
      (21) days before the relevant policies, contracts or entries, expire, (or
      in such shorter period as the Bank may agree), and, subject to compliance
      with any requirements of the Bank under these Insurance Requirements,
      procure that appropriate instructions for the renewal of such Insurances
      on the terms so specified are given to the Approved Brokers and/or to the
      approved Insurers at least fourteen (14) days before the relevant
      policies, contracts or entries expire, and that the Approved Brokers
      and/or the approved Insurers will at least seven (7) days before such
      expiry (or within such shorter period as the Bank may from time to time
      agree) confirm in writing to the Bank as and when such renewals have been
      effected in accordance with the instructions so given and to procure that
      a Cancellation Clause shall be endorsed on the relevant policies,
      contracts or entries for a Notice of Cancellation to the Bank on the terms
      set out in Paragraph D of this
Schedule.

            

    

     

    
      	
              (e)

            	
              arrange
      for the execution and delivery of such guarantees or indemnities as may
      from time to time be required by any protection and indemnity or war risks
      association;

            

    

     

    
      	
              (f)

            	
              deposit
      with the Approved Brokers (procure the deposit of) all slips, cover notes,
      policies, certificates of entry or other instruments of insurance from
      time to time issued and procure that the interest of the Bank shall be
      endorsed thereon by incorporation of the relevant Loss Payable Clause and
      by means of a Notice of Assignment (signed by the Owners) in the form set
      out in Paragraph D hereinbelow or in such other form as may from time to
      time be agreed in writing by the Bank, and that the Bank shall be
      furnished with pro forma copies
thereof.

            

    

     

    
      	
              (g)

            	
              procure
      that the Insurers shall note the Bank’s interest and endorse the relevant
      Loss Payable Clause on the relevant certificates of entry or policies and
      shall furnish the Bank with a copy of such certificates of entry or
      policies;

            

    

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    

     

    
      	
              (h)

            	
              do
      all other necessary things and provide all such documents, evidence and
      information, so as to enable the Bank to collect and recover any moneys
      which shall at any time become due in respect of the
      Insurances;

            

    

     

    
      	
              (i)

            	
              not
      employ or permit the Vessel to be employed in any other way than in
      conformity with the terms of the Insurances (including any warranties
      express or implied therein) and with any applicable law without first
      obtaining the consent of the Insurers to such employment and complying
      with such requirements as to extra premium or otherwise as the Insurers
      may prescribe;

            

    

     

    
      	
              (j)

            	
              apply
      all sums receivable under the Insurances which are paid to the Owner in
      accordance with the Loss Payable Clauses in repairing all damage and/or in
      discharging the liability in respect of which such sums shall have been
      received;

            

    

     

    
      	
              (k)

            	
              in
      case that the Vessel is scheduled to operate or operates within or nearby
      USA, make all the Protection & Indemnity Club US Voyage Quarterly
      Declarations for each quarter in time and/or obtain prior to the Vessel’s
      arrival in US territorial waters all relevant certificates as from time to
      time may be required, such as COFR, or any other similar, and forward
      copies of same to the Bank;

            

    

     

    
      	
              (l)

            	
              not
      without the prior consent of the Bank alter any insurance nor make,
      consent or agree to any act or omission which would or might render any
      insurance invalid, void, voidable or unenforceable or render any sum paid
      out under any insurance repayable in whole or in
  part.

            

    

     

    
      	
              (m)

            	
              reimburse
      the Bank for any premiums paid by the Bank or pay to the Bank the amount
      of any premiums to be paid by the Bank in order to effect and maintain a
      policy of Mortgagee’s Interest Insurance or any other additional insurance
      that the Bank decides to take at its discretion as well as reimburse the
      Bank for all expenses and premiums paid by the Bank in order to effect
      insurances that the Owner failed to
effect.

            

    

     

    6.           Fleet
cover is permitted only subject to the prior written approval of the Bank under
the conditions set out in Paragraph 5(b) above and the Bank prior express
written approval of fleet aggregate deductibles.

     

    D.           FORMS AND
WORDING

     

    (a)           Loss payable
clause

     

    The
Loss Payable Clauses to be attached to the Insurances should be substantially 1n
the following form:

     

    (1)           Hull and Machinery (Marine
& War Risks): It is hereby noted that by an assignment dated
_______________________ the  Owner _______(insert name) _______ has
assigned to  EFG EUROBANK ERGASIAS S.A (the Mortgagees) all rights
title and interest in and to all policies and contracts of insurance from time
to time taken out or entered into by or for the benefit of the Owner in respect
of ________ (insert name of Vessel) _____________ and all benefits arising
thereof including all claims of whatsoever nature (including return of premiums)
thereunder and accordingly:

     

    Save
as hereinafter provided, all claims arising under the Insurances, whether in
respect of an actual, constructive, compromised or arranged Total Loss of the
Vessel or otherwise howsoever, shall be payable to the Mortgagees or as it may
direct, (provided that the written consent of the Mortgagees shall be obtained
prior to a compromised or arranged Total Loss being agreed with the Insurers)
and provided always that unless and until written notice to the contrary has
been received from the

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    Mortgagees,
claims (other than Total Loss claims) not exceeding USD three hundred United
States Dollars (USD 300,000) or its equivalent in any other currency (inclusive
of any deductible) in respect of any one claim may be paid to the Owner or its
order.

     

    (2)           Protection and Indemnity
Risks: Payment of any recovery in respect of protection and indemnity
risks which _____________ (the “Owner”) is entitled to make out of the funds of
the Insurers in respect of any liability, costs or expenses incurred by the
Owner, shall be made to the Owner or to its order unless and until the Insurer
receives notice to the contrary from EFG EUROBANK ERGASIAS S.A (the Mortgagees)
in which event all recoveries shall thereafter be paid to the Mortgagees or to
its order; provided that no liability whatsoever shall attach to the Insurers or
its agents for failure to comply with the latter obligation until the expiry of
two clear business days from the receipt of such notice.

     

    (b)           Notice of
Assignment.

     

    The
notice of assignment shall be in the following form:

     

    (For
attachment by way of endorsement to the Policy) __________ the Owner of M/V (the
“Vessel”) , HEREBY GIVE NOTICE that by an assignment of even date herewith and
entered into by us with EFG EUROBANK ERGASIAS S.A there have been assigned by us
to the said Bank, as Mortgagees of the Vessel, all insurances in respect thereof
and all benefits arising under the insurances taken or entered into from time to
time by the Owners or for the benefit of the Owners in respect
________________________________ thereof including but not limited to the
insurances constituted by the policy whereon this notice is endorsed or shall be
endorsed.

     

     

    Signed

    For
and behalf of

    Owner

    Dated

    

    (c)           Notice of
Cancellation

     

    Owners
to procure that Notices of Cancellation of Insurances be given by the Insurers
and/or by the brokers to EFG EUROBANK ERGASIAS S.A. at its branch office at 83,
Akti Miaouli street, Piraeus, 185 38, Greece (and such Notices of Cancellation
be endorsed on the Insurances) providing that the same will be given to the Bank
in the following cases:

     

    (1)           immediately
in the event of any material changes affecting the insurances.

     

    (2)           not
later than ten days prior to the expiry of any of the insurances, if
ins:ructions have not been received for the renewal thereof and, in the event of
instructions being received to renew, of the details thereof;

     

    (3)           immediately
if the underwriters give notice of their intention to cancel the Insurances
provided that the underwriters will not exercise any rights of cancellation by
reason of unpaid premiums without giving the Bank fourteen (14) days from the
receipt of such notice in which to remit the sums due.

     

    

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    

    Schedule
III

    

    Notice of
Drawdown

    

    To:

    EFG
EUROBANK ERGASIAS S.A 83, Akti Miaouli street

    Piraeus

     

    Dear
Sirs,

    NOTICE
OF DRAWDOWN

     

    We
refer to the Loan Agreement dated 7 June 2007 made between the Bank and the
Borrower (“the Loan
Agreement”).

     

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

     

    Pursuant
to Clause 2.2 of the Loan Agreement we hereby irrevocably request that you
advance the amount of Dollars representing the Loan to us on 2007, which is a
Business Day, by paying the said sum as to

     

    We
hereby warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date hereof and will be true and
correct on 2007 and that no Event of Default nor any event which would with the
giving of notice and/or the passage of time and/or the satisfaction of any
materiality test constitute an Event of Default has occurred or is continuing,
and that no Event of Default will result from the drawdown of the
Loan.

     

     

    We
select the period of [ ] months as the first interest period for the whole of
the said amount.

     

    

    
      	 
      	
              Yours
      faithfully,

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              For
      and on behalf of

              Manolis
      Shipping Limited

            	 
      
	 
      	 
      	 
      

    

    

     

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

     

     

    
 

    Schedule
IV

    PAYMENT
SCHEDULE

     

    
      	
              Instalment

              No

            	
              Payment
      Date

            	
              Repayment

              Instalment

            	
              Total
      Principal

              Amount

            
	
              1

            	
              3
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,840,000

            
	
              2

            	
              6
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,680,000

            
	
              3

            	
              9
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,520,000

            
	
              4

            	
              12
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,360,000

            
	
              5

            	
              15
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,200,000

            
	
              6

            	
              18
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      9,040,000

            
	
              7

            	
              21
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,880,000

            
	
              8

            	
              24
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,720,000

            
	
              9

            	
              27
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,560,000

            
	
              10

            	
              30
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,400,000

            
	
              11

            	
              33
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,240,000

            
	
              12

            	
              36
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      8,080,000

            
	
              13

            	
              39
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,920,000

            
	
              14

            	
              42
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,760,000

            
	
              15

            	
              45
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,600,000

            
	
              16

            	
              48
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,440,000

            
	
              17

            	
              51
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,280,000

            
	
              18

            	
              54
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      7,120,000

            
	
              19

            	
              57
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,960,000

            
	
              20

            	
              60
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,800,000

            
	
              21

            	
              63
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,640,000

            
	
              22

            	
              66
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,480,000

            
	
              23

            	
              69
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,320,000

            
	
              24

            	
              72
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,160,000

            
	
              25

            	
              75
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      6,000,000

            
	
              26

            	
              78
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,840,000

            
	
              27

            	
              81
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,680,000

            
	
              28

            	
              84
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,520,000

            
	
              29

            	
              87
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,360,000

            
	
              30

            	
              90
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,200,000

            
	
              31

            	
              93
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      5,040,000

            
	
              32

            	
              96
      months after the Drawdown Date

            	
              USD
      160,000

            	
              USD
      4,880,000

            
	 
      	
              Plus
      Balloon Payment payable together with the 32nd

              Instalment

            	
              USD4,880,000

            	 
      

    

    

    

     

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    
 

    Schedule
V

    DESIGNATION
NOTICE

     

    To:
EFG EUROBANK ERGASIAS S.A.

    83,
Akti Miaouli Street

    185
38 Piraeus

    Greece

    For
the attention of Mr Sissy Hydreou

    

    [date]

     

    Dear
Sirs

     

    Loan
Agreement dated 7 June 2007 made between (i) ourselves as Borrower and (ii)
yourselves as Lender and Swap Bank (the “Loan Agreement”).

     

    We
refer to:

     

    1.           The
Loan Agreement;

    2.           the
Master Swap Agreement; and

    3.           a
Confirmation delivered pursuant to the said Master Swap Agreement dated
[         ]

     

    In
accordance with the terms of the Loan Agreement, we hereby give you notice of
the said Confirmation and hereby confirm that the Transaction evidenced by it
will be designated as a “Designated Transaction” for the purposes of the Loan
Agreement and the Finance Documents.

     

    Yours
faithfully,

     

    

     

    Stephania
Karmiri

     

    for
and on behalf of

    MANOLIS SHIPPING LIMITED

     

    

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    IN
WITNESS whereof the parties hereto have caused this Agreement to be executed the
day and year first above written.

    

    
      	
              SIGNED and DELIVERED

              By
      Stephania Karmiri

              the
      duly appointed Attorney for and on

              behalf
      of MANOLIS SHIPPING
      LIMITED

              in
      the presence of Katerina Avramidou

            	
              )

              )

              )

              )

              )

               

            	 
      
	 
      	 
      	 
      

    

    

    

    
      	
              SIGNED
      and DELIVERED

              by
      Marina Tzoutzourakis and

              Ioannis
      Toirikos

              the
      duly authorised attorneys

              for
      and on behalf of

              EF’G
      EUROBANK ERGASIAS S.A.

              in
      the presence of Katerina Avramidou

            	
              )

              )

              )

              )

              )

              )

              )

            	 
      
	 
      	 
      	 
      

    

    

     

    
      
         

      

      
        56

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