Document:

d1007404_ex4-76.htm

     

    Exhibit
4.76

     

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    	
                                                            Dated
      26 March 2008

                                                          	 
      
	
                                                             
      

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                          	 
      
	
                                                            SUPPLEMENTAL
      AGREEMENT

                                                            relating
      to a

                                                            Term
      Loan and

                                                            Revolving
      Credit Facility

                                                            of
      originally US$545,656,899.82

                                                            provided
      by

                                                          	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	
                                                             
      

                                                             

                                                             

                                                          	 
      
	
                                                            THE
      ROYAL BANK OF SCOTLAND plc

                                                          	
                                                            (1)

                                                          
	
                                                             

                                                             

                                                            to

                                                             

                                                             

                                                          	 
      
	
                                                            TOP
      SHIPS INC.

                                                          	
                                                            (2)

                                                          
	 
      	 
      

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
 

    ^

    NORTON
ROSE

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Contents

     

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                	Clause	 	
                                                                        Page

                                                                      
	
                                                                         

                                                                         

                                                                      	 	
                                                                         

                                                                      
	
                                                                        1

                                                                      	
                                                                        Definitions

                                                                      	
                                                                        1

                                                                      
	 
      	 
      	 
      
	
                                                                        2

                                                                      	
                                                                        Agreement
      of the Bank

                                                                      	
                                                                        2

                                                                      
	 
      	 
      	 
      
	
                                                                        3

                                                                      	
                                                                        Amendments
      to Principal Agreement

                                                                      	
                                                                        2

                                                                      
	 
      	 
      	 
      
	
                                                                        4

                                                                      	
                                                                        Representations
      and warranties

                                                                      	
                                                                        2

                                                                      
	 
      	 
      	 
      
	
                                                                        5

                                                                      	
                                                                        Conditions

                                                                      	
                                                                        4

                                                                      
	 
      	 
      	 
      
	
                                                                        6

                                                                      	
                                                                        Security
      Documents

                                                                      	
                                                                        5

                                                                      
	 
      	 
      	 
      
	
                                                                        7

                                                                      	
                                                                        Expenses

                                                                      	
                                                                        5

                                                                      
	 
      	 
      	 
      
	
                                                                        8

                                                                      	
                                                                        Miscellaneous
      and notices

                                                                      	
                                                                        5

                                                                      
	 
      	 
      	 
      
	
                                                                        9

                                                                      	
                                                                        Law
      and jurisdiction

                                                                      	
                                                                        5

                                                                      
	 
      	 
      
	
                                                                        Schedule
      1 Form of Supplemental Letter

                                                                      	
                                                                        7

                                                                      
	 
      	 
      
	
                                                                        Schedule
      2 Form of Mortgage Addendum

                                                                      	
                                                                        8

                                                                      
	 
      	 
      
	
                                                                        Part
      (a) Dauntless Mortgage Addendum

                                                                      	
                                                                        9

                                                                      
	 
      	 
      
	
                                                                        Part
      (b) loannis P Mortgage Addendum

                                                                      	
                                                                        10

                                                                      
	 
      	 
      
	
                                                                        Schedule
      3 Form of Amended and Restated Loan Agreement

                                                                      	
                                                                        11

                                                                      

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

    
 

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    THIS AGREEMENT is dated 26
March 2008 and is made BETWEEN:

     

    
      	
              (1)  

            	
              TOP SHIPS INC. (formerly
      known as Top Tankers Inc.) with its principal place of business at 1, Vas.
      Sofias & Meg. Alexandrou Str., 151 24 Maroussi, Greece (the "Borrower");
      and

            

    

     

    
      	
              (2)  

            	
              THE ROYAL BANK OF SCOTLAND plc,
      acting for the purposes of this Agreement through its office at the
      Shipping Business Centre, 5-10 Great Tower Street, London, EC3P 3HX,
      England (the "Bank").

            

    

     

    WHEREAS:

     

    
      	
              (A)  

            	
              this
      Agreement is supplemental to a facilities agreement dated 1 November 2005
      (the "Original
      Agreement")
      made between (1) the Borrower and (2) the Bank as supplemented and
      amended by a first supplemental agreement dated 21 December 2006 (the
      "First Supplemental
      Agreement")
      and a second supplemental agreement dated 22 January 2008 (the
      "Second Supplemental Agreement"),
      each made between (1) the Borrower and (2) the Bank (the Original
      Agreement as supplemented and amended by the First Supplemental Agreement
      and the Second Supplemental Agreement and as further supplemented and
      amended from time to time, the "Principal Agreement")
      pursuant to which the Bank agreed to make a term loan facility of
      up to $195,656,899.82 and a revolving credit facility of up to
      $350,000,000 available to the Borrower upon the terms and conditions set
      out in the Principal Agreement;

            

    

     

    
      	
              (B)  

            	
              pursuant
      to clause 2.4 of the Principal Agreement the Borrower has requested that a
      part of Facility B be drawndown for the purposes of financing part of the
      second contract instalments payable under the Contracts relating to the
      Additional Ships which are newbuildings with hull numbers 5-1025, S-1026,
      S-1027, S-1029, S-1031 and S-1033 (the "Newbuildings");
      and

            

    

     

    
      	
              (C)  

            	
              the
      Bank has agreed to the Borrower's request to make available six Advances
      under Facility B (one Advance per Newbuilding) each in the amount of
      $5,000,000 subject to the terms of the Principal Agreement including,
      without limitation, the satisfaction of all relevant conditions precedent
      and subject to the amendment of the Principal Agreement in the manner set
      out in this Agreement.

            

    

     

    NOW IT IS HEREBY AGREED as
follows:

     

        
1       Definitions

     

    1.1           
Defined
expressions

     

    Words
and expressions defined in the Principal Agreement shall unless the context
otherwise requires or unless otherwise defined herein, have the same meanings
when used in this Agreement.

     

    1.2           
Definitions

    In this
Agreement, unless the context otherwise requires: 

    "Effective Date" means 26
March 2008;

     

    "Dauntless Mortgage" means the
Mortgage over m.v. "DAUNTLESS" (Official Number 2308) executed
by Lefka Shipping Company Limited in favour of the Bank on 3 November
2005

     

    "Dauntless Mortgage Addendum"
means the addendum executed or (as the context may require) to be
executed by Lefka Shipping Company Limited in favour of the Bank substantially
in the form set out in Schedule 2 supplemental to the Dauntless
Mortgage;

     

    "loannis P Mortgage" means the
Mortgage over m.v. "JOANN'S P" (Official Number 2476) executed by Ilisos
Shipping Company Limited in favour of the Bank on dated 9 November
2005;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    "loannis P Mortgage Addendum" means the
addendum executed or (as the context may require) to be executed by Ilisos
Shipping Company Limited in favour of the Bank substantially in the form set out
in Schedule 2 supplemental to the loannis P Mortgage;

     

    "Loan Agreement" means the Principal Agreement
as amended by this Agreement;

     

    "Mortgage Addenda" means the Dauntless Mortgage
Addendum and the loannis P Mortgage Addendum and "Mortgage Addendum" means either of them;
and

     

    "Supplemental Letters" means the letters
supplemental to the Security Documents executed or (as the context may require)
to be executed by the Security Parties who are not party to this Agreement in
favour of the Bank in the form set out in Schedule 2,

     

    1.3         
Principal Agreement

     

    References
in the Principal Agreement to "this Agreement" shall, with effect from the
Effective Date and unless the context otherwise requires, be references to the
Principal Agreement as amended by the First Supplemental Agreement, the Second
Supplemental Agreement and this Agreement and words such as "herein", "hereof',
"hereunder", "hereafter", "hereby" and "hereto", where they appear in the
Principal Agreement, shall be construed accordingly.

     

    1.4         
Headings

     

    Clause
headings and the table of contents are inserted for convenience of reference
only and shall be ignored in the interpretation of this Agreement.

     

    1.5         
Construction of certain
terms

     

    Clause
1.4 of the Principal Agreement shall apply to this Agreement mutatis
mutandis as if set out herein and as if references therein to "this
Agreement" were references to this Agreement.

     

    2       Agreement of the Bank

     

    
    

     

    
      	2.1 	
              The
      Bank, relying upon the representations and warranties on the part of the
      Borrower contained
      in clause 4, agrees with the Borrower that, subject to the terms and
      conditions of this Agreement and in particular, but without prejudice to
      the generality of the foregoing, fulfilment on or before 26 March 2008 of
      the conditions contained in clause 5 the Bank agrees to the amendment of
      the Principal Agreement on the terms set out in clause
      3.

            

    

     

       
3      
  Amendments to Principal Agreement

     

    3.1      
    Amendments

     

    
      The
Principal Agreement shall, with effect from the Effective Date, be (and it is
hereby) amended so as to read in accordance with the form of the amended and
restated Loan Agreement set out in Schedule 3 and (as so amended) will continue
to be binding upon each of the parties hereto in accordance with its terms as so
amended and restated. For the avoidance of doubt as at the date of this
Agreement Facility A has been fully prepaid by the Borrower and has been
cancelled.

    

     

    3.2          
Continued force and effect

     

    Save
as amended by this Agreement, the provisions of the Principal Agreement shall
continue in full force and effect and the Principal Agreement and this Agreement
shall be read and construed as one instrument.

     

       
4        
Representations and warranties

     

    4.1          
Primary representations and
warranties

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     The
Borrower represents and warrants to the Bank that:

    4.1.1        
Existing representations and
warranties

     

    the
representations and warranties set out in clause 7 of the Principal Agreement
and in any of the other Security Documents were true and correct on the date of
the Principal Agreement or such other Security Document and are true and
correct, including to the extent that they may have been or shall be amended by
this Agreement, as if made at the date of this Agreement with reference to the
facts and circumstances existing at such date (and so that the representation
and warranty set out in clause 7.1.9 of the Principal Agreement shall refer to
the latest audited financial statements of the Borrower delivered under clause
8,1.5 of the Principal Agreement);

     

    4.1.2      
Corporate power

     

    the
Borrower has power to execute, deliver and perform its obligations under this
Agreement and all documents and other instruments to be executed by it in
accordance with this Agreement to which it is or is to be a party and all
necessary corporate, shareholder and other action has been taken by the Borrower
to authorise the execution, delivery and performance of this Agreement and all
documents and other instruments to which it is or is to be a party;

     

    4.1.3      
Binding obligations

     

    this
Agreement constitutes valid and legally binding obligations of the Borrower
enforceable in accordance with its terms;

     

    4.1,4      
No conflict with other
obligations

     

    the
execution, delivery and performance of this Agreement by the Borrower will not
(a) contravene any existing law, statute, rule or regulation or any judgment,
decree or permit to which the Borrower is subject, (b) conflict with, or result
in any breach of any of the terms of, or constitute a default under, any
agreement or other instrument to which the Borrower is a party or is subject or
by which it or any of its properties is bound, (c) contravene or conflict with
any provision of the constitutional documents of the Borrower or (d) result in
the creation or imposition of or oblige the Borrower to create any Encumbrance
(other than a Permitted Encumbrance) on any of the undertakings, assets, rights
or revenues of the Borrower;

     

    4.1.5         No filings required

     

    save
for the registration of the Mortgage Addenda in the Marshall Islands it is not
necessary to ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement that it or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or elsewhere in any
Relevant Jurisdiction or that any stamp, registration or similar tax or charge
be paid in any Relevant Jurisdiction on or in relation to this Agreement and
this Agreement is in proper form for its enforcement in the courts of each
Relevant Jurisdiction;

     

    4,1.6        
Choice of law

     

    the
choice of English law to govern this Agreement and the choice of the laws of the
Marshall Islands to govern the Mortgage Addenda and the submission by the
Borrower to the non-exclusive jurisdiction of the English courts are valid and
binding; and

     

    4.1.7        
Consents obtained

     

    every
consent, authorisation, licence or approval of, or registration or declaration
to, governmental or public bodies or authorities or courts required by the
Borrower in connection with the execution, delivery, validity, enforceability or
admissibility in evidence of this Agreement or the performance by the Borrower
of its obligations under this Agreement has

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    been
obtained or made and is in full force and effect and there has been no default
in the observance of any conditions or restrictions (if any) imposed in, or in
connection with, any of the same.

     

    4.2           
Repetition of representations and
warranties

     

    Each of
the representations and warranties contained in this Agreement, clause 7 of the
form of the amended and restated Loan Agreement set out in Schedule 3 and each
of the Security Documents shall be deemed to be repeated by the Borrower on the
date of execution of this Agreement as if made with reference to the facts and
circumstances existing on such day.

     

        5        
Conditions

     

    5.1           
Documents
and evidence

     

    The
agreement of the Bank referred to in clause 2 shall be subject to the receipt by
the Bank of the following conditions precedent in a form and substance
satisfactory to the Bank in its sole discretion:

     

    5,1.1        
the Supplemental Letters duly executed;

     

    5,1.2        
evidence as to the due authority of the person(s) executing this Agreement and
the Supplemental
Letters;

     

    5.1.3        
evidence that the Borrower has properly and validly executed this Agreement and
that the provisions
of this Agreement is 

    binding
upon it;

     

    5.1.4        
evidence that each Security Party has properly and validly executed a
Supplemental Letter in
relation to those Security 

    Documents
to which it is a party and that the provisions of the relevant Supplemental
Letter are binding upon it;

     

    
      
        
          
            	
                    5.1.5

                  	
                    evidence
      that the Borrower and each of the other Security Parties have obtained all
      consents and authorisations necessary to enable each of them to enter into
      this Agreement (in the case of the Borrower) and the Supplemental Letters
      (in the case of the Security Parties) and all documents and other
      instruments to be executed by each of them in connection therewith or
      pursuant thereto;

                  

          

        

      

      

      
        
          
            	
                    5.1.6

                  	
                    evidence
      that the Borrower, each Owner and the Manager are in good standing under
      the laws of the Marshall
Islands;

                  

          

        

      

      

      
        
          
            	
                    5.1.7

                  	
                    evidence
      that the Mortgage Addenda have been properly and validly executed and
      registered against the relevant Ship through the
  Registry;

                  

          

        

      

      

      
        	
                5.1,8

              	
                a
      legal opinion in relation to the laws of the Marshall Islands in favour of
      the Bank confirming (inter alia) the due execution of this Agreement, the
      Supplemental Letters and the Mortgage Addenda;
  and

              

      

      

      
        	
                5.1.9

              	
                an
      original or certified true copy of a letter from the Borrower's agent for
      receipt of service of proceedings accepting its appointment under this
      Agreement as the Borrower's process
agent.

              

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              5.2

                                            	
                                              General
      conditions precedent

                                            
	 
      	 
      
	 
      	
                                              The
      agreement of the Bank referred to in clause 2 shall be further subject
      to:

                                            
	 
      	 
      
	
                                              5.2.1

                                            	
                                              the
      representations and warranties in clause 4 being true and correct on the
      Effective Date as if each was made with respect to the facts and
      circumstances existing at such time; and

                                            
	 
      	 
      
	
                                              5.2.2

                                            	
                                              no
      Default having occurred and continuing on the Effective
    Date.

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

       

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  
                                                                                                                                                    
                                                                                                                                                      
                                                                                                                                                        
                                                                                                                                                          
                                                                                                                                                            	
                                                                                                                                                                    5.3

                                                                                                                                                                  	
                                                                                                                                                                    Waiver
      of conditions precedent

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    The
      conditions specified in this clause 5 are inserted solely for the benefit
      of the Bank and may be waived by the Bank in whole or in part with or
      without conditions.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    6

                                                                                                                                                                  	
                                                                                                                                                                    Security
      Documents

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    The
      Borrower further acknowledges and agrees, for the avoidance of doubt,
      that:

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    6.1.1

                                                                                                                                                                  	
                                                                                                                                                                    each
      of the Security Documents to which it is a party, and its respective
      obligations thereunder, shall remain in full force and effect
      notwithstanding the amendments made to the Principal Agreement by this
      Agreement; and

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    6.1.2

                                                                                                                                                                  	
                                                                                                                                                                    with
      effect from the Effective Date, references to "the Agreement" or "the Loan
      Agreement" in any of the Security Documents to which each is a party shall
      henceforth be reference to the Principal Agreement as amended by this
      Agreement and as from time to time hereafter amended.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                          
      7

                                                                                                                                                                  	
                                                                                                                                                                    Expenses

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    The
      Borrower hereby undertakes to pay all legal and other expenses or
      disbursements incurred by the Bank in the negotiation, preparation and
      execution of this Agreement and in connection with the fulfilment of the
      conditions specified in clause 5,

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                          
      8

                                                                                                                                                                  	
                                                                                                                                                                    Miscellaneous
      and notices

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    8.1

                                                                                                                                                                  	
                                                                                                                                                                    Notices

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    The
      provisions of clause 16.1 of the Principal Agreement shall extend and
      apply to the giving or making of notices or demands hereunder as if the
      same were expressly stated herein.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    8.2

                                                                                                                                                                  	
                                                                                                                                                                    Third
      Party Rights

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    No
      term of this Agreement shall be enforceable pursuant to the Contracts
      (Rights of Third Parties) Act 1999 by a person who is not a party to this
      Agreement.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    8.3

                                                                                                                                                                  	
                                                                                                                                                                    Counterparts

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    This
      Agreement may be executed in any number of counterparts and by the
      different parties on separate counterparts, each of which when so executed
      and delivered shall be an original but all counterparts shall together
      constitute one and the same instrument.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    9

                                                                                                                                                                  	
                                                                                                                                                                    Law
      and jurisdiction

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    9.1

                                                                                                                                                                  	
                                                                                                                                                                    Law

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    This
      Agreement shall be governed by, and construed in accordance with, English
      law.

                                                                                                                                                                  
	 
      	 
      
	
                                                                                                                                                                    9.2

                                                                                                                                                                  	
                                                                                                                                                                    Submission
      to jurisdiction

                                                                                                                                                                  
	 
      	 
      
	 
      	
                                                                                                                                                                    The
      Borrower agrees, for the benefit of the Bank, that any legal action or
      proceedings arising out of or in connection with this Agreement against
      the Borrower or any of its assets may be brought in the English courts.
      The Borrower irrevocably and unconditionally submits to the jurisdiction
      of such courts and irrevocably designates, appoints and empowers Top
      Tankers (U.K.) Limited at present of 8 Duke Street, London W1 U 3EW,
      England to receive for it and on its behalf, service of process issued out
      of the English courts in any such legal action or proceedings. The
      submission to such jurisdiction shall not (and shall not be construed so
      as to) limit the right of the Bank to take proceedings against the
      Borrower
in

                                                                                                                                                                  

                                                                                                                                                          

                                                                                                                                                        

                                                                                                                                                      

                                                                                                                                                    

                                                                                                                                                  

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

       

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      

       

      
        	 
      	
                the
      courts of any other competent jurisdiction nor shall the taking of
      proceedings in any one or more jurisdictions preclude the taking of
      proceedings in any other jurisdiction, whether concurrently or
      not.

              
	 
      	 
      
	 
      	
                The
      parties further agree that only the courts of England and not those of any
      other State shall have jurisdiction to determine any claim which the
      Borrower may have against the Bank arising out of or in connection with
      this Agreement.

              

      

      

      IN WITNESS WHEREOF this Agreement has been duly
executed and delivered on the date first above written.

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

        Scheduel
1
Form of Supplemental Letter

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      
        Scheduel
1
Form of Mortgage Addendum

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        Part (a)

         

        Dauntless Mortgage
Addendum

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          Part (a)

           

          Ioannis P Mortgage
Addendum

        

         

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

    

     

    Scheduel
3
Form of Amended and Restated Loan Agreement

     

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Private
      & Confidential

              
	
                As
      amended and restated by a Supplemental Agreement dated 26 March
      2008

                 

                Dated
      1 November 2005

                _____________________

                 

              
	
                 

                                                                                   
                      
        TOP SHIPS INC.    
                         (1)

                and

                                                                                    
      THE ROYAL BANK OF SCOTLAND
      plc                                                                (2)

                 

              

      

      

      
        
          	
                                                                                     

                  ____________________________

                   

                  FACILITIES AGREEMENT

                  Term
      Loan and

                  Revolving
      Credit Facility

                  of
      originally US$545,656,899.82

                  _____________________________

                                                                                     

                

        

      

      

NORTON ROSE

    
    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Contents

    Clause                                                                                 Page

     

    

      
        
          
            
              	
                      1

                    	
                      Purpose
      and definitions

                    	
                      1

                    
	
                      2

                    	
                      The
      Facilities

                    	
                      15

                    
	
                      3

                    	
                      Interest
      and Interest Periods

                    	
                      18

                    
	
                      4

                    	
                      Repayment,
      prepayment and reborrowing

                    	
                      20

                    
	
                      5

                    	
                      Commitment
      commission, fees and expenses

                    	
                      24

                    
	
                      6

                    	
                      Payments
      and taxes; accounts and calculations

                    	
                      25

                    
	
                      7

                    	
                      Representations
      and warranties

                    	
                      26

                    
	
                      8

                    	
                      Undertakings

                    	
                      31

                    
	
                      9

                    	
                      Conditions

                    	
                      43

                    
	
                      10

                    	
                      Events
      of Default

                    	
                      45

                    
	
                      11

                    	
                      Indemnities

                    	
                      49

                    
	
                      12

                    	
                      Unlawfulness
      and increased costs

                    	
                      50

                    
	
                      13

                    	
                      Security
      and set off

                    	
                      51

                    
	
                      14

                    	
                      Accounts

                    	
                      52

                    
	
                      15

                    	
                      Assignment,
      transfer and lending office

                    	
                      54

                    
	
                      16

                    	
                      Notices
      and other matters

                    	
                      55

                    
	
                      17

                    	
                      Governing
      law and jurisdiction

                    	
                      56

                    

            

          

        

      

       

      
        
          
            	
                    Schedule
      1 Part 1 - Initial Ships

                  	 
      	
                    57

                  

          

        

      

       

      
        
          
            	 
      	
                    Part
      1 - Initial Ships

                  	
                    57

                  
	 
      	
                    Part
      2 - Additional Ship Selection Criteria

                  	
                    59

                  
	 
      	
                    Part
      3 - Maximum amount of Intra-Group Loan per Initial Ship

                  	
                    60

                  
	 
      	
                    Part
      4 - Details of Initial Owners

                  	
                    61

                  

          

        

      

      

      
        
          	
                  Schedule
      2 Form of Drawdown Notice

                	 
      	
                  62

                
	
                  Schedule
      3 Documents and evidence required as conditions precedent to the
      Commitment

                	 
      	
                  63

                
	
                  Schedule
      4 Additional Cost

                	 
      	
                  72

                
	
                  Schedule
      5 Form of Compliance Certificate

                	 
      	
                  73

                
	
                  Schedule
      6 Master Swap Agreement and Novation Agreement

                	 
      	
                  74

                
	
                  Schedule
      7 Form of Master Swap Agreement Security Deed

                	 
      	
                  75

                
	
                  Schedule
      8 Form of Intra-Group Loan Agreements

                	 
      	
                  76

                
	
                  Schedule
      9 Form of Assignment of Intra-Group Loan Agreements

                	 
      	
                  77

                
	
                  Schedule
      10 Form of Owner’s Guarantee

                	 
      	
                  78

                
	
                  Schedule
      11 Forms of Mortgages

                	 
      	
                  79

                

        

      

      

      
        
          
            	 
      	
                    Part
      1 - Form of Cyprus Mortgage

                  	
                    79

                  
	 
      	
                    Part
      2 - Form of Liberian/Marshall Islands Mortgage

                  	
                    80

                  

          

        

      

      

      
        
          
            	
                    Schedule
      12 Form of Deed of Covenant

                  	 
      	
                    81

                  
	
                    Schedule
      13 Forms of General Assignments

                  	 
      	
                    82

                  

          

        

      

      

      
        	 
      	
                Part
      1 - Form of Cyprus General Assignment

              	
                82

              
	 
      	
                Part
      2 - Form of Liberian/Marshall Island General Assignment

              	
                83

              

      

      

      
        
          
            	
                    Schedule
      14 Form of Operating Accounts Charge

                  	 
      	
                    84

                  
	
                    Schedule
      15 Form of Manager’s Undertaking

                  	 
      	
                    85

                  

          

        

      

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    THIS AGREEMENT is
dated                                   2005
and made BETWEEN:

     

    
      	
              (1)  

            	
              TOP SHIPS INC. as
      borrower (the “Borrower”);
      and

            

    

     

    
      	
              (2)  

            	
              THE ROYAL BANK OF SCOTLAND
      plc as bank (the “Bank”).

            

    

     

    IT IS AGREED as
follows:

     

    
      	
              1  

            	
              Purpose
      and definitions

            

    

     

    
      	
              1.1  

            	
              Purpose

            

    

     

    This Agreement sets out the terms and conditions upon and subject
to which the Bank agrees to make available to the Borrower (i) a term loan
facility of up to one hundred and ninety five million six hundred and fifty six
thousand eight hundred and ninety nine Dollars and eighty two cents
($195,656,899.82) which is to be applied by the Borrower in making available to
the relevant Initial Owners intra-group loans under Intra-Group Loan Agreements
to assist in refinancing part of the existing indebtedness on the Initial Ships
and (ii) a revolving credit facility originally of up to three hundred and fifty
million dollars ($350,000,000) which has been reduced on 3 August 2006 to one
hundred and fifty eight million Dollars ($158,000,000) and shall be further
reduced on 26 March 2008 to one hundred and twenty three million Dollars
($123,000,000) which is to be applied by the Borrower (a) to the extent of one
hundred and forty four million Dollars ($144,000,000) in making available to the
relevant Initial Owners intra-group loans under Intra-Group Loan Agreements to
assist in refinancing part of the existing indebtedness of the Initial Ships and
(b) any balance from time to time in making available to the Additional Owners
intra-group loans under Intra-Group Loan Agreements to allow the Additional
Owners to finance part of the purchase price of the Additional Ships and
Expected Project Costs in accordance with the Additional Ship Selection
Criteria.

     

    
      	
              1.2  

            	
              Definitions

            

    

     

    In this
Agreement, unless the context otherwise requires:

     

    “Additional Cost” means in
relation to any period a percentage calculated for such period at an annual rate
determined by the application of the formula set out in Schedule 4;

     

    “Additional Cost Rate” has the
meaning given to it in Schedule 4;

     

    “Additional Owner” means any
company incorporated in a jurisdiction, capitalised, structured and managed in a
manner acceptable to the Bank in its sole discretion which becomes the owner of
an Additional Ship;

     

    “Additional Ship Selection
Criteria” means, in relation to an Additional Ship, the selection
criteria for such Additional Ship set out in Part 2 of Schedule 1 or such other
criteria for an Additional Ship which are approved by the Bank at the request of
the Borrower from time to time;

     

    “Additional Ships” means the
additional ships which meet the Additional Ship Selection Criteria purchased or
(as the context may require) to be purchased by an Additional Owner with the
prior written approval of the Bank and “Additional Ship” means any of
them;

     

    “Advance” means each borrowing
of a proportion of the Commitment by the Borrower (whether being an Advance
constituting Facility A or forming part of Facility B) or, as the context may
require, the principal amount of such borrowing for the time being outstanding
and “Advances” means all
of them;

     

    “Approved Shipbrokers” means
Braemar Seascope Ltd, Clarksons, Fearnleys AS or any other independent firm or
firms of shipbrokers appointed by the Bank and “Approved Shipbroker” means any
of them;

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Assignee” has the meaning
ascribed thereto in clause 15.3;

    “Assignment of Intra-Group Loan
Agreements” means the assignment executed or (as the context may require)
to be executed by the Borrower in favour of the Bank in the form set out in
Schedule 9;

     

    “Bank” means The Royal Bank of
Scotland plc whose registered office is at 36 St. Andrew Square, Edinburgh EH2
2YB, Scotland acting for the purposes of this Agreement through its office at
the Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX, England
(or of such other address as may last have been notified to the Borrower
pursuant to clause 15.6) and includes its successors in title and permitted
assignees and transferees;

     

    “Banking Day” means a day on
which dealings in deposits in Dollars are carried on in the London Interbank
Eurocurrency Market and (other than Saturday or Sunday) on which banks are open
for business in London and New York City (or any other relevant place of payment
under clause 6);

     

    “Borrowed Money” means
Indebtedness in respect of (i) money borrowed or raised and debit balances at
banks, (ii) any bond, note, loan stock, debenture or similar debt instrument,
(iii) acceptance or documentary credit facilities, (iv) receivables sold or
discounted (otherwise than on a non-recourse basis), (v) deferred payments for
assets or services acquired, (vi) finance leases and hire purchase contracts,
(vii) swaps, forward exchange contracts, futures and other derivatives, (viii)
any other transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of money or
of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of
any person falling within any of (i) to (viii) above;

     

    “Borrower” means Top Ships Inc.
a corporation incorporated in the Marshall Islands with its principal place of
business at 1 Vas. Sofias & Meg. Alexandrou Str., 151 24 Marroussi, Greece
and includes its successors in title;

     

    “Borrower’s Group” means the
Borrower and its Related Companies;

     

    “Borrower’s Security Documents”
means, at any relevant time, such of the Security Documents as shall have been
executed by the Borrower at such time;

     

    “Builder” means, in relation to
an Additional Ship which is a newbuilding, the builder of that Additional Ship
and includes its successors in title and “Builders” shall be construed
accordingly;

     

    “Classification”
means:

     

    
      	
              (a)  

            	
              in
      relation to an Initial Ship, the classification set out in Part 1 of
      Schedule 1; and

            

    

     

    
      	
              (b)  

            	
              in
      relation to any Additional Ship, the highest class available to vessels of
      its type with the relevant Classification
  Society,

            

    

     

    or, in
each case, such other classification as the Bank shall, at the request of the
Borrower, have agreed in writing shall be treated as the Classification in
relation to such Ship for the purposes of the Security Documents;

     

    “Classification Society”
means:

     

    
      	
              (a)  

            	
              in
      relation to an Initial Ship, the classification society set out in Part 1
      of Schedule 1; and

            

    

     

    
      	
              (b)  

            	
              in
      relation to any Additional Ship, a classification society which is a
      member of the International Association of Classification
      Societies,

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    or, in
each case, such other classification society which the Bank shall, at the
request of the Borrower, have agreed in writing shall be treated as the
Classification Society in relation to such Ship for the purposes of the Security
Documents;

     

    “Commercial Manager” means Top
Tanker Management Inc. with its registered address at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 or any other
person appointed by the Borrower, with the prior written consent of the Bank, as
the commercial manager of the Ships and includes its successors in title and
assignees;

     

    “Committed Facility B Amount”
means that part of the Total Facility B Commitment that shall have been made
available by the Bank to the Borrower either as the Initial Revolving Amount or
as an Advance to acquire Additional Ship(s) as the same may be reduced on each
Reduction Date and as advised by the Bank to the Borrower from time to
time;

     

    “Commitment” means the
aggregate of the Total Facility A Commitments and the Total Facility B
Commitments, being in total five hundred and forty five million six hundred and
fifty six thousand eight hundred and ninety nine Dollars and eighty two cents
($545,656,899.82) at the date of this Agreement;

     

    “Compliance Certificate” means
each certificate received by the Bank from the Borrower pursuant to
clause 8.1.6 substantially in the form set out in Schedule 5
confirming compliance by the Borrower of the financial covenants contained at
clause 8.5 of this Agreement and duly signed by an authorised signatory of the
Borrower;

     

    “Compulsory Acquisition” means
requisition for title or other compulsory acquisition, requisition,
appropriation, expropriation, deprivation, forfeiture or confiscation for any
reason of a Ship by any Government Entity or other competent authority, whether
de jure or de facto, but shall exclude requisition for use or hire not involving
requisition of title;

     

    “Contract” means:

     

    
      	
              (a)  

            	
              in
      relation to any second-hand Additional Ship, the memorandum of agreement
      or other contract for the sale and purchase of such Ship (to be in a form
      and substance satisfactory to the Bank) made or (as the context may
      require) to be made, between the Seller of such Ship and the relevant
      Owner as buyer of such Ship; and

            

    

     

    
      	
              (b)  

            	
              in
      relation to any Additional Ship which is a newbuilding, a shipbuilding
      contract made between the relevant Builder of such Additional Ship and the
      relevant Additional Owner of that Additional Ship and/or the relevant
      Seller of that Additional Ship (to be in a form and substance satisfactory
      to the Bank) and as the same may subsequently be supplemented and/or
      amended,

            

    

     

    and
“Contracts” means all of
them;

     

    “Contract Assignment Consent and
Acknowledgements” means the acknowledgements of notice of, and consent
to, the assignment in respect of a Contract relative to an Additional Ship which
is a newbuilding to be given by the relevant Builder, in the form scheduled to
the relevant Pre-delivery Security Assignment;

     

    “Contract Instalment Advance”
means, in relation to any Additional Ship which is a newbuilding, an Advance of
Facility B made, or to be made, to finance the payment of an instalment of the
relevant Contract Price falling due before the Delivery Date for that Additional
Ship;

     

    “Contract Price” means in
relation to any Additional Ship, the price payable by the relevant Owner to the
relevant Builder or Seller (as appropriate) in accordance with the relevant
Contract;

     

    “Credit Support Document” has
the meaning given to that expression in Section 14 of the Master Swap
Agreement and as set out in paragraph (f) of Part 4 of the Schedule to
the Master Swap Agreement;

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Credit Support Provider” means
any person defined as such in the Master Swap Agreement pursuant to
Section 14 of the Master Swap Agreement;

     

    “Dauntless”
means the vessel m.t. “DAUNTLESS” owned by the Dauntless Borrower and registered
under Marshall Islands flag under Official Number 2308;

     

    “Dauntless Borrower” means
Lefka Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Deeds of Covenant” means,
where appropriate, all of the deeds of covenant collateral to the Mortgages
executed or (as the context may require) to be executed by the Owners in favour
of the Bank in the form set out in Schedule 12 and “Deed of Covenant” means any of
them;

     

    “Default” means any Event of
Default or any event or circumstance which with the giving of notice or lapse of
time or the satisfaction of any other condition (or any combination thereof)
would constitute an Event of Default;

     

    “Delivery” means the delivery
of a Ship to, and the acceptance of the relevant Ship by the relevant Owner
pursuant to the relevant Contract;

     

    “Delivery Date” means, in
relation to each Additional Ship, the date on which such Ship is delivered to
the relevant Owner in accordance with the relevant Contract;

     

    “Delivery Date Advance” means,
in relation to an Additional Ship which is a newbuilding, an Advance of Facility
B made, or to be made, to finance the instalment of the Contract Price falling
due on the Delivery Date for that Additional Ship;

     

    “DOC” means a document of
compliance issued to the Operator in accordance with the ISM Code;

     

    “Dollars” and “$” mean the lawful currency of
the United States of America and in respect of all payments to be made under any
of the Security Documents mean funds which are for same day settlement in the
New York Clearing House Interbank Payments System (or such other U.S. dollar
funds as may at the relevant time be customary for the settlement of
international banking transactions denominated in U.S. dollars);

     

    “Doubtless”
means the vessel m.t. “DOUBTLESS” owned by the Doubtless Borrower and registered
under the Liberian flag under Official Number 9363;

     

    “Doubtless Borrower” means
Falakro Shipping Company Limited, a corporation incorporated in the Republic of
Liberia whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Drawdown Date” means any date,
being a Banking Day falling during the Drawdown Period,  on which an
Advance is, or is to be, made;

     

    “Drawdown Notice” means a
notice substantially in the terms of Schedule 2;

     

    “Drawdown Period”
means:

     

    
      	
              (a)  

            	
              in
      relation to Facility A, the period from and including the date of this
      Agreement and ending on the Termination Date relative to Facility A;
      and

            

    

     

    
      	
              (b)  

            	
              in
      relation to Facility B, the period from and including the date of this
      Agreement and ending on the Termination Date relative to Facility
      B,

            

    

     

    or, in
each case, the period ending on such earlier date (if any) on which (i) the
aggregate of all of the Advances is, in the case of Facility A, equal to the
Commitment or (ii) the Commitment is reduced to zero pursuant to clauses 10.2 or
12;

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Earnings” means, in relation
to each Ship, all moneys whatsoever from time to time due or payable to the
relevant Owner of such Ship during the Security Period arising out of the use or
operation of such Ship including (but without limiting the generality of the
foregoing) all freight, hire and
passage moneys, income arising out of pooling arrangements, compensation payable
to the relevant Owner in the event of requisition of such Ship for hire,
remuneration for salvage or towage services, demurrage and detention moneys and
damages for breach (or payments for variation or termination) of any
charterparty or other contract for the employment of such Ship and any sums
recoverable under any loss of earnings insurance;

     

    “Encumbrance” means any
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, trust arrangement or security interest or other encumbrance of any
kind securing any obligation of any person or any type of preferential
arrangement (including without limitation title transfer and/or retention
arrangements having a similar effect);

     

    “Endless”
means the vessel m.t. “ENDLESS” owned by the Endless Borrower and registered
under the Marshall Islands flag under Official Number 2040;

     

    “Endless Borrower” means
Litochoro Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 
and includes its successors in title;

     

    “Environmental Claim”
means:

     

    
      	
              (a)  

            	
              any
      and all enforcement, clean-up, removal or other governmental or regulatory
      action or order or claim instituted or made pursuant to any Environmental
      Law or resulting from a Spill; or

            

    

     

    
      	
              (b)  

            	
              any
      claim made by any other person relating to a
  Spill;

            

    

     

    “Environmental Incident” means
any Spill:

     

    
      	
              (a)  

            	
              from
      any Fleet Vessel; or

            

    

     

    
      	
              (b)  

            	
              from
      any other vessel in circumstances
where:

            

    

     

    
      	
              (i)  

            	
              any
      Fleet Vessel or its owner, operator or manager may be liable for
      Environmental Claims arising from the Spill (other than Environmental
      Claims arising and fully satisfied before the date of this Agreement);
      and/or

            

    

     

    
      	
              (ii)  

            	
              any
      Fleet Vessel may be arrested or attached in connection with any such
      Environmental Claims;

            

    

     

    “Environmental Laws” means all
laws, regulations and conventions concerning pollution or protection of human
health or the environment;

     

    “Event of Default” means any of
the events or circumstances described in clause 10.1;

     

    “Existing Loan Agreement” means
the loan agreement dated 2 February 2005 (as supplemented and amended from time
to time) made between (inter alia) the Initial Owners and the Bank in connection
with a loan of up to four hundred and twenty four million seven hundred and
ninety four thousand Dollars ($424,794,000);

     

    “Expected Project Costs”
means:

     

    
      	
              (a)  

            	
              in
      connection with the construction of an Additional Ship, all reasonable
      pre-delivery costs up to the Delivery Date of such Additional Ship which
      have been approved by the Bank in its sole
  discretion;

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              in
      connection with the acquisition of an Additional Ship from a Seller, the
      deposit payable in respect of such Additional Ship pursuant to the
      relevant Contract in an amount approved by the Bank;
  and

            

    

     

    
      	
              (c)  

            	
              all
      interest paid by the Borrower on the relevant Advance under clause 3 of
      this Agreement up to the Delivery Date of such Additional
      Ship;

            

    

     

           
“Facility” means
Facility A or Facility B and “Facilities” means both of
them;

            

    “Facility A” means the term
loan facility made available under this Agreement as described in clause 2.3 or
the principal amount outstanding for the time being under Facility
A;

     

    “Facility B” means the
revolving credit facility made available under this Agreement as described in
clause 2.4 or the principal amount outstanding for the time being under Facility
B;

     

    “Facility B Repayment Amount”
means an amount determined by multiplying that part of the Loan forming Facility
B by the same percentage as the Total Facility B Commitment is being reduced on
each Reduction Date:

     

    “Fair Market Value” means, in
relation to each Ship, the fair market value of such Ship determined in
accordance with clause 8.2.2;

     

    “Faithful”
means the vessel m.t. “FAITHFUL” owned by the Faithful Borrower and registered
under the Marshall Islands flag under Official Number 1689;

     

    “Faithful Borrower” means
Gramos Shipping Company Inc., a corporation incorporated in the Marshall Islands
whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Faultless”
means the vessel m.t. “FAULTLESS” owned by the
Faultless Borrower and registered under Liberian flag under
Official  Number 12601;

     

    “Faultless Borrower” means
Parnasos Shipping Company Limited, a corporation incorporated in the Republic of
Liberia whose registered office is set out in Part 4 of Schedule 1 and includes
its successors in title;

     

    “Final Reduction Date” means 31
August 2013;

     

    “Final Repayment Date” means in
relation to Facility A 30 November 2012 and in relation to Facility B 31 August
2013;

     

    “First Supplemental Agreement”
means the agreement dated 21 December 2006 supplemental to this Agreement made
between (1) the Borrower and (2) the Bank;

     

    “Flag State”
means:

     

    
      	
              (a)  

            	
              in
      relation to an Initial Ship, the flag state set out in Part 1 of Schedule
      1 or
      such other state or territory designated in writing by the Bank, at the
      request of the Borrower or an Owner, as being the “Flag State” of that
      Owner’s Ship for the purposes of the Security Documents;
  or

            

    

     

    
      	
              (b)  

            	
              in
      relation to an Additional Ship any of the flag states as set out in Part 1
      of Schedule 1, or such other state or territory designated in writing by
      the Bank, at the request of the Borrower or the Owner, as being the “Flag State” of that
      Owner’s Ship for the purposes of the Security
  Documents;

            

    

     

    “Flawless”
means the vessel m.t. “FLAWLESS” owned by the Flawless Borrower and
registered under the Liberian flag under Official Number 9475;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Flawless Borrower” means Pylio
Shipping Company Limited, a corporation incorporated in the Republic of Liberia
whose registered office is set out in Part 4 of Schedule 1 and includes its
successors in title;

     

    “Fleet Vessel” means each of
the Ships and any other vessel owned, operated, managed or crewed by any member
of the Borrower’s Group;

     

    “GAAP” means accounting
principles, concepts, bases and policies generally adopted and accepted in the
United States of America consistently applied;

     

    “General Assignments” means,
where appropriate, all of the general assignments collateral to the Mortgages
executed or (as the context may require) to be executed by the Owners in favour
of the Bank in the form set out in Schedule 13 and “General Assignment” means any
of them;

     

    “Government Entity” means and
includes (whether having a distinct legal personality or not) any national or
local government authority, board, commission, department, division, organ,
instrumentality, court or agency and any association, organisation or
institution of which any of the foregoing is a member or to whose jurisdiction
any of the foregoing is subject or in whose activities any of the foregoing is a
participant;

     

    “Indebtedness” means any
obligation for the payment or repayment of money, whether as principal or as
surety and whether present or future, actual or contingent;

     

    “Initial Owners” means, in
relation to each Initial Ship, the Owner of that Initial Ship set out in Part 1
of Schedule 1 and “Initial
Owner” means any or all of them;

     

    “Initial Revolving Amount”
means the Advance forming part of Facility B of up to one hundred and forty four
million Dollars ($144,000,000);

     

    “Initial Ships” means the
initial ships whose names and particulars are set out in Part 1 of
Schedule 1 and “Initial
Ship” means any of them;

     

    “Interest Payment Date” means
the last day of an Interest Period;

     

    “Interest Period” means, in
relation to any Advance, Facility A, Facility B or the Loan as the case may be,
each period for the calculation of interest in respect of such Advance, Facility
A, Facility B or the Loan ascertained in accordance with clauses 3.2 and
3.3;

     

    “Intra-Group Loan Agreements”
means the loan agreements in a form and substance acceptable to the Bank
executed or (as the context may require) to be executed by the Borrower and each
Owner relating to the intra-group loan to be made available by the Borrower to
each Owner to enable each such Owner to finance the acquisition and/or
refinancing of the relevant Ship in the form set out in Schedule 8 and
“Intra-Group Loan Agreement” means any of them;

     

     “ISM Code” means the
International Safety Management Code for the Safe Operation of Ships and for
Pollution Prevention constituted pursuant to Resolution A.741(18) of the
International Maritime Organisation and incorporated into the Safety of Life at
Sea Convention and includes any amendments or extensions thereto and any
regulation issued pursuant thereto;

     

    “ISPS Code” means the
International Ship and Port Facility Security Code constituted pursuant to
Resolutions A924(22) of the International Maritime Organisation and incorporated
into the Safety of Life at Sea Convention and includes any amendments or
extensions thereto and any regulation issued pursuant thereto;

     

    “ISSC” means an International
Ship Security Certificate issued in respect of a Ship under the provisions of
the ISPS Code;

     

    “LIBOR” means, in relation to a
particular period, the rate determined by the Bank to be that at which deposits
in Dollars and in an amount comparable with the amount in relation to which
LIBOR is to be determined and for a period equal to the relevant period were
being offered by the Bank to prime banks in the London Interbank Market at the
time the rate is fixed in accordance with clauses 3.2 and 3.3 hereof on the
second Banking Day before the first day of such period, provided that if the
Borrower shall at any time enter into any Transaction(s) under the Master Swap
Agreement, LIBOR shall (during the period when any such Transaction(s) are
effective and for an amount equal to the notional amount of such Transaction(s))
be the rate for deposits in Dollars for a period equivalent to such period at or
about 11 a.m. on the second Banking Day before the first day of such period as
displayed on Telerate page 3750 (British Bankers’ Association Interest
Settlement Rates) (or such other page as may replace such page 3750 on such
system or on any other system of the information vendor for the time being
designated by the British Bankers’ Association to calculate the BBA Interest
Settlement Rate (as defined in
the British Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS” terms) dated August,
1985));

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Limitless”
means the vessel m.t. “LIMITLESS” owned by the Limitless Borrower and registered
under the Marshall Islands flag under Official Number 2034;

     

    “Limitless Borrower” means
Mytikas Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Loan” means the aggregate
principal amount owing to the Bank under this Agreement at any relevant time
whether forming part of Facility A or Facility B;

     

    “Management Agreements” means
the agreements executed or (as the context may require) to be executed between
the relevant Owner and the Manager in a form previously approved in writing by
the Bank or any other agreement previously approved in writing by the Bank
between the relevant Owner and the Manager providing (inter alia) for the
Manager to manage the Ships and “Management Agreement” means
any of them;

     

    “Managers” means the Commercial
Manager and the Technical Manager and “Manager” means either of
them;

     

    “Manager’s Undertaking” means
an undertaking executed or (as the context may require) to be executed by the
Commercial Manager and/or the Technical Manager in favour of the Bank as a
condition precedent to the approval of the appointment of the Manager as manager
of a Ship, such undertaking to be in the form set out in Schedule 15 and
“Manager’s Undertakings”
means all of them;

     

    “Margin” means:

     

    
      	
               
      

            	
              (a)

            	
              up
      until 26 March 2008 the margin listed in the following table which shall
      be adjusted at each Margin Set
Date:

            

    

     

    
      
        
          
            
              	
                      Facility

                    	
                      Loan/Security
      Value

                      Ratio

                    	
                      Margin

                    
	
                      Facility
      A

                    	
                      ≤
      60%

                    	
                      0.875%

                    
	
                      Facility
      B

                    	
                      ≤
      60%

                    	
                      0.85%

                    
	
                      Loan

                    	
                      >60%

                    	
                      1.0%

                    

            

          

        

      

    

    

    and

    

    (b)              from
26 March 2008, 1.25%;

    

    “Margin Set Date” means the
initial Drawdown Date, 31 December 2005 and each of the dates falling at
quarterly intervals thereafter.

     

    “Master Swap Agreement” means
the agreement dated 2 February 2005 as amended and novated pursuant to a
Novation agreement dated 28 October 2005 and made between (inter alia) the
Borrower and the Bank or (as the context may require) in the form or
substantially in the form set out in Schedule 6, and any Confirmations (as
defined therein) supplemental thereto;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Master Swap Agreement Security
Deed” means the deed executed or (as the context may require) to be
executed by the Borrower in favour of the Bank in the form set out in Schedule
7;

     

    “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 (a) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it shall
end on the last Banking Day in such next calendar month and (b) if such
numerically corresponding day is not a Banking Day, the period shall end
on the next following Banking Day in the same 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, in relation
to each Ship, a first priority statutory mortgage or first preferred mortgage of
such Ship executed or (as the context may require) to be executed by the
relevant Owner in favour of the Bank in the form set out in Schedule 11 and
“Mortgages” means all of
them;

     

    “Mortgaged Ship” means, at any
relevant time, any Ship which is at such time subject to a Mortgage and the
Earnings, Insurances and Requisition Compensation (as defined in the relevant
Ship Security Documents) of which are subject to an Encumbrance pursuant to the
relevant Security Documents and a Ship shall for the purposes of this Agreement
be deemed to be a Mortgaged Ship as from the date that the Mortgage of that Ship
shall have been executed and registered in accordance with this Agreement until
whichever shall be the earlier of (i) the payment in full of the amount required
to be paid to the Bank pursuant to clause 4.5 following the sale or Total
Loss of such Ship and (ii) the date on which all moneys owing under the Security
Documents have been repaid in full;

     

    “Noiseless”
means the vessel m.t. “NOISELESS” owned by the Noiseless Borrower and
registered  under Marshall Islands flag under Official Number
2234;

     

    “Noiseless Borrower” means
Imitos Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Operating Account Charges” the
charges of the Operating Accounts executed or (as the context may require) to be
executed by the Borrower and each Owner in favour of the Bank in respect of each
Operating Account in the form set out in Schedule 14 and “Operating Account Charge”
means any of them;

     

    
             
“Operating Accounts”
means

    

     

    
      	
              (a)  

            	
              in
      relation to an Initial Owner and the Borrower, the accounts with account
      numbers as set out in Part 1 of Schedule 1;
and

            

    

     

    
      	
              (b)  

            	
              in
      relation to any Additional Owner, accounts of the Borrower and such Owner
      opened or (as the context may require) to be opened by the Borrower and
      such Owner with the Bank

            

    

     

    and
includes any other account designated in writing by the Bank to be an Operating
Account for the purposes of this Agreement and “Operating Account” means any
of them;

     

    “Operator” means any person who
is at any time during the Security Period concerned in the operation of a Ship
and falls within the definition of “Company” set out in rule 1.1.2 of the ISM
Code;

     

    “Owners” means the Initial
Owners and the Additional Owners and “Owner” means any of
them;

     

    “Owner’s Guarantee” means, in
relation to each Owner, a guarantee issued or (as the context may require) to be
issued by that Owner in favour of the Bank in the form set out in Schedule 10 or
in such other form as the Bank may from time to time require as (inter alia)
security for the Loan and “Owner’s Guarantees” means all
of them;

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Permitted Encumbrance” means
any Encumbrance in favour of the Bank created pursuant to the Security Documents
and Permitted Liens;

     

    “Permitted Liens” means any
lien on a Ship for master's, officer's or crew's wages outstanding in the
ordinary course of trading, any lien for salvage and any ship repairer's or
outfitter's possessory lien for a sum not (except with the prior written consent
of the Bank) exceeding the Casualty Amount (as defined in the Ship Security
Documents for such Ship);

     

    “Pollutant” means and includes
oil and its products, any other polluting, toxic or hazardous substance and any
other substance whose release into the environment is regulated or penalised by
Environmental Laws;

     

    “Priceless”
means the vessel m.t. “PRICELESS” owned by the Priceless Borrower and registered
under Marshall Islands flag under Official Number 1598;

     

    “Priceless Borrower” means
Kisavos Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4
of  Schedule 1 and includes its successors in title;

     

    “Pre-delivery Security Assignment” means, in
relation to any Additional Ship which is a newbuilding, an assignment of the
relevant Contract and the relevant Refund Guarantee with respect to that
Additional Ship executed or (as the context may require) to be executed by the
relevant Owner of that Additional Ship in favour of the Bank in a form and
substance acceptable to the Bank in its sole discretion and “Pre-delivery Assignments”
means all of them;

     

    “Protocol of Delivery and
Acceptance” means, in relation to any Additional Ship, the protocol of
delivery and acceptance to be signed by or on behalf of the relevant Seller and
the relevant Owner as buyer of such Ship evidencing the delivery and acceptance
of such Ship pursuant to the relevant Contract, such protocol to be in a form
satisfactory to the Bank;

     

    “Reduction Date” means in
relation to Facility B 30 November 2008 and each of the dates falling at three
(3) monthly intervals thereafter up to and including the Final Reduction
Date;

     

    “Refund Guarantee” means, in
relation to any Additional Ship which is a newbuilding, the guarantee issued or
to be issued by the relevant Refund Guarantor in respect of the relevant
Builder’s obligations under the relevant Contract and any further guarantee(s)
to be issued by such Refund Guarantor in respect of such obligations, pursuant
to any agreement supplemental to the relevant Contract, and any extensions,
renewals or replacements thereto or thereof and “Refund Guarantees” means all
of them;

     

    “Refund Guarantee Assignment Consent
and Acknowledgements” means the acknowledgements of notice, and consent
to, the assignment in respect of any Refund Guarantee to be given by the
relevant Refund Guarantor in the form scheduled to the relevant Pre-delivery
Security Assignment;

     

    “Refund Guarantor” means, in
relation to any Refund Guarantee, the refund guarantor stipulated under the
relevant Contract and includes its successors in title (which shall be
acceptable to the Bank in its sole discretion) and “Refund Guarantors” shall be construed
accordingly;

     

    “Registry” means the office of
the registrar, commissioner or representative of the relevant Flag State who is
duly authorised and empowered to register the relevant Ship, the relevant
Owner’s title to such Ship and the relevant Mortgage under the laws and flag of
the relevant Flag State through the relevant Registry;

     

    “Related Company” of a person
means any Subsidiary of such person, any company or other entity of which such
person is a Subsidiary and any Subsidiary of any such company or
entity;

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Relevant Jurisdiction” means
any jurisdiction in which or where any Security Party is incorporated, resident,
domiciled, has a permanent establishment, carries on, or has a place of business
or is otherwise effectively connected;

     

    “Repayment Dates” means
(subject to clause 6.3):

     

    
      	
              (a)  

            	
              in
      relation to Facility A, 30 November 2005 and each of the dates falling at
      six (6) monthly intervals thereafter up to and including the Final
      Repayment Date relative to Facility A;
and

            

    

     

    
      	
              (b)  

            	
              in
      relation to Facility B, 30 November 2008 and each of the dates falling at
      three (3) monthly intervals thereafter up to and including the Final
      Repayment Date relative to Facility
B;

            

    

     

    “Requisition Compensation”
means all sums of money or other compensation from time to time payable during
the Security Period by reason of the Compulsory Acquisition of a
Ship;

     

    “Second Supplemental Agreement”
means the agreement dated 22 January 2008 supplemental to this Agreement made
between, among others, (1) the Borrower and (2) the Bank;

     

    “Security Documents” means this
Agreement as supplemented and amended by the First Supplemental Agreement and
the Second Supplemental Agreement, the Master Swap Agreement, the Assignment of
the Intra-Group Loan Agreement, the Mortgages, the Deeds of Covenant, the
General Assignments, the Owner’s Guarantees, the Operating Account Charges, the
Master Swap Agreement Security Deed, the Manager’s Undertakings, any
Pre-Delivery Security Assignment, any Contract Assignment Consent and
Acknowledgements, any Refund Guarantee Assignment Consents and Acknowledgements,
the Supplemental Agreement and any other documents as may have been or shall
from time to time after the date of this Agreement be executed to guarantee
and/or secure all or any part of the Loan, interest thereon and other moneys
from time to time owing by the Borrower pursuant to this Agreement (whether or
not any such document also secures moneys from time to time owing pursuant to
any other document or agreement) as such document may be supplemented or amended
from time to time;

     

    “Security Party” means the
Borrower, any Builders, any Refund Guarantors, the Owners, the Managers or any
other person who may at any time be a party to any of the Security Documents
(other than the Bank) or any of them;

     

    “Security Period” means the
period commencing on the date hereof and terminating upon discharge of the
security created by the Security Documents by payment of all monies payable
thereunder;

     

    “Security Requirement” means,
subject to the provisions of clause 4.5, the amount in Dollars (as certified by
the Bank whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Borrower and the Bank) which is at any relevant
time one hundred and thirty per cent (130%) (or for the purposes of clause 4.5
only one hundred and sixty seven per cent (167%)) of (a) the Loan and (b) the
notional or actual costs as certified by the Bank in its discretion at any
relevant time of cancelling, netting out, terminating, liquidating, transferring
or assigning the rights, benefits and obligations created by any Transaction or
the Master Swap Agreement;

    

    “Security Value” means the
amount in Dollars (as certified by the Bank whose certificate shall, in the
absence of manifest error, be conclusive and binding on the Borrower and the
Bank) which, at any relevant time, is the aggregate of (a) the charter-free
market value of the Mortgaged Ships as most recently determined in accordance
with clause 8.2.2; (b) the value of any Additional Ships which are newbuildings
as most recently determined in accordance with clause 8.2.2 less any part of the
Contract Price which has not been paid by the Borrower or the relevant Owner to
the relevant Builder under the relevant Contract; and (c) the market value of
any additional security for the time being actually provided to the Bank
pursuant to clause 8.2;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “Seller” means in relation to
any Additional Ship the relevant Seller or Builder of such Additional Ship
“Sellers” means all of
them;

     

    “Shareholders” means in
relation to the Borrower, Kingdom Holdings Inc. and Sovereign Holdings Inc. each
of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
Islands;

     

    “Ship Security Documents” means
in respect of each Ship the relevant Mortgage, the relevant Deed of Covenant
and/or General Assignment and the relevant Manager’s Undertakings and in the
case of an Additional Ship which is a newbuilding the relevant Pre-delivery
Security Assignment and “Ship
Security Document” means any of them;

    “Ships” means the Initial Ships
and the Additional Ships and “Ship” means any of
them;

     

    “SMC” means a safety management
certificate issued in respect of each Ship in accordance with rule 13 of the ISM
Code;

     

    “Soundless”
means the vessel m.t. “SOUNDLESS” owned by the
Soundless Borrower and registered under Marshall Islands flag under Official
Number 2309;

     

    “Soundless Borrower” means
Agrafa Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Spill” means any actual or
threatened emission, spill, release or discharge of a Pollutant into the
environment;

     

    “Spotless”
means the vessel m.t. “SPOTLESS“ owned by the Spotless Borrower and
registered under the Liberian flag under Official Number 9361;

     

    “Spotless Borrower” means Idi
Shipping Company Limited, a corporation incorporated in the Republic of Liberia
whose registered office is set out in Schedule 1 and includes its successors in
title;

     

    “Subsidiary” of a person
incorporated outside England and Wales means any company or entity directly or
indirectly controlled by such person, and for this purpose “control” means either the
ownership of more than fifty per cent (50%) of the voting share capital (or
equivalent rights of ownership) of such company or entity or the power to direct
its policies and management, whether by contract or otherwise;

     

    “Supplemental Agreement” means
the agreement dated 26 March 2008 supplemental to this Agreement and made
between the Borrower and the Bank;

     

    “Taintless”
means the vessel m.t. “TAINTLESS” owned by the Taintless Borrower and registered
under Marshall Islands flag under Official Number 2307;

     

    “Taintless Borrower” means
Giona Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Taxes” includes all present
and future taxes, levies, imposts, duties, fees or charges of whatever nature
together with interest thereon and penalties in respect thereof and “Taxation” shall be construed
accordingly;

     

    “Technical Manager”
means:

     

    
      	
              (a)  

            	
              in
      relation to Dauntless,
      Endless,
      Faithful,
      Faultless,
      Limitless, Noiseless, Priceless,
      Taintless
      and Timeless
      V.Ships Management Limited of Eaglehurst, Belmont Hill, Douglas, Isle of
      Man;

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              in
      relation to Doubtless,
      Flawless,
      Spotless
      and Vanguard,
      Hanseatic Shipping Co. Ltd of 284, Archbishop Makarios III Avenue,
      Limassol, Cyprus; and

            

    

     

    
      	
              (c)  

            	
              in
      relation to Soundless
      and Topless,
      Top Tanker Management Inc. with its registered address at Trust Company
      Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
      MH96960,

            

    

     

    or any
other person appointed by the Commercial Manager, with the prior written consent
of the Bank (not to be unreasonably withheld), as the technical manager of the
Ships and includes its successors in title and assignees and “Technical Managers” shall be
construed accordingly;

     

    “Termination Date”
means:

     

    
      	
              (a)  

            	
              in
      relation to Facility A, 14 November 2005;
and

            

    

     

    
      	
              (b)  

            	
              in
      relation to Facility B, the earlier of (i) the date which falls ten (10)
      years after the date of this Agreement and (ii) the Final Repayment
      Date;

            

    

     

    “Timeless”
means the vessel m.t. “TIMELESS“ owned by the Timeless Borrower and
registered under the Liberian flag under Official Number 9480;

     

    “Timeless Borrower” means
Taygetus Shipping Company Limited, a corporation incorporated in the Republic of
Liberia whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title;

     

    “Topless”
means the vessel m.t. “TOPLESS” owned by the Topless Borrower and registered
under Marshall Islands flag under Official Number 2310;

     

    “Topless Borrower” means Agion
Oros Shipping Company Limited, a corporation incorporated in the Marshall
Islands whose registered office is set out in Part 4 of Schedule 1 and includes
its successors in title;

     

    “Total Facility A Commitment”
means the sum of one hundred and ninety five million six hundred and fifty six
thousand eight hundred and ninety nine Dollars and eighty two cents
($195,656,899.82) at the date of this Agreement;

     

    “Total Facility B Commitment”
means:

     

    
      	
               
      

            	
              (a)

            	
              from
      1 November 2005 up until 2 August 2006 the aggregate amount of three
      hundred and fifty million Dollars
  ($350,000,000);

            

    

     

    
      	
               
      

            	
              (b)

            	
              from
      3 August 2006 up until 19 March 2008 the aggregate amount of one hundred
      and fifty eight million Dollars ($158,000,000);
  and

            

    

     

    
      	
               
      

            	
              (c)

            	
              from
      26 March 2008 the aggregate amount of one hundred and twenty three million
      Dollars ($123,000,000) at the date of this
  Agreement,

            

    

     

    
      	
               
      

            	
              as
      the same may be reduced on each Reduction
Date;

            

    

     

    “Total Loss” in relation to a
Ship means:

     

    
      	
              (a)  

            	
              actual,
      constructive, compromised or arranged total loss of such Ship;
      or

            

    

     

    
      	
              (b)  

            	
              the
      Compulsory Acquisition of such Ship;
or

            

    

     

    
      	
              (c)  

            	
              the
      hijacking, theft, condemnation, capture, seizure, arrest, detention or
      confiscation of such Ship (other than where the same amounts to the
      Compulsory Acquisition of such Ship) by any Government Entity, or by
      persons acting or purporting to act on behalf of any Government Entity,
      unless such Ship be released and restored to the relevant Owner from such
      hijacking, theft, condemnation, capture, seizure, arrest, detention or
      confiscation within fifteen (15) days after the occurrence
      thereof;

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    “Transactions” shall have the
same meaning as ascribed thereto in the Master Swap Agreement;

     

    “Transferee” has the meaning
ascribed thereto in clause 15.4;

     

    “Underlying Documents” means
the Contracts, the Management Agreements and the Refund Guarantees;

     

    “United Kingdom” means Great
Britain and Northern Ireland;

     

    “Vanguard”
means the vessel m.t. “VANGUARD“ owned by the Vanguard Borrower and
registered under the Cyprus flag under Official Number 709465; and

     

    “Vanguard Borrower” means
Pageon Shipping Company Limited, a company incorporated in the Republic of
Cyprus whose registered office is set out in Part 4 of Schedule 1 and
includes its successors in title.

     

    
      	
              1.3  

            	
              Headings

            

    

     

    Clause headings
and the table of contents are inserted for convenience of reference only and
shall be ignored in the interpretation of this Agreement.

     

    
      	
              1.4  

            	
              Construction
      of certain terms

            

    

     

    In this
Agreement, unless the context otherwise requires:

     

    
      	
              1.4.1  

            	
              references
      to clauses and Schedules are to be construed as references to
      clauses of, and Schedules to, this Agreement and references to
      this Agreement include its
Schedules;

            

    

     

    
      	
              1.4.2  

            	
              references
      to (or to any specified provision of) this Agreement or any other document
      shall be construed as references to this Agreement, that provision or that
      document as in force for the time being and as amended in accordance with
      the terms thereof, or, as the case may be, with the agreement of the
      relevant parties;

            

    

     

    
      	
              1.4.3  

            	
              references
      to a “regulation”
      include any present or future regulation, rule, directive, requirement,
      request or guideline (whether or not having the force of law) of any
      agency, authority, central bank or government department or any
      self-regulatory or other national or supra-national
    authority;

            

    

     

    
      	
              1.4.4  

            	
              words
      importing the plural shall include the singular and vice
      versa;

            

    

     

    
      	
              1.4.5  

            	
              references
      to a time of day are to London
time;

            

    

     

    
      	
              1.4.6  

            	
              references
      to a person shall be construed as references to an individual, firm,
      company, corporation, unincorporated body of persons or any Government
      Entity;

            

    

     

    
      	
              1.4.7  

            	
              references
      to a “guarantee”
      include references to an indemnity or other assurance against financial
      loss including, without limitation, an obligation to purchase assets or
      services as a consequence of a default by any other person to pay any
      Indebtedness and “guaranteed” shall be
      construed accordingly; and

            

    

     

    
      	
              1.4.8  

            	
              references
      to any enactment shall be deemed to include references to such enactment
      as re-enacted, amended or extended.

            

    

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              1.5  

            	
              Contracts
      (Rights of Third Parties) Act 1999

            

    

     

    No term
of this Agreement is enforceable under the Contracts (Rights of Third Parties)
Act 1999 by a person who is not a party to this Agreement.

     

    
      	
              2  

            	
              The
      Facilities

            

    

     

    
      	
              2.1  

            	
              Agreement
      to lend

            

    

     

    The Bank,
relying upon each of the representations and warranties in clause 7, agrees
to lend to the Borrower upon and subject to the terms of this
Agreement:

     

    
      	
              (a)  

            	
              a
      Dollar term loan facility in an aggregate amount equal to the Total
      Facility A Commitment; and

            

    

     

    
      	
              (b)  

            	
              a
      Dollar revolving credit and term loan facility in an aggregate amount
      equal to the Total Facility B
Commitment,

            

    

     

    
      	
              (c)  

            	
              in
      the aggregate principal sum of originally up to five hundred and forty
      five million six hundred and fifty six thousand eight hundred and ninety
      nine Dollars and eighty two cents ($545,656,899.82) and from 26 March 2008
      up to one hundred and twenty three million Dollars
      ($123,000,000).

            

    

     

    
      	
              2.2  

            	
              Drawdown

            

    

     

    Subject
to the terms and conditions of this Agreement, each Advance thereof shall be
made to the Borrower following receipt by the Bank from the Borrower of a
Drawdown Notice not later than 10 a.m. on the second Banking Day before the
proposed Drawdown Date relative to such Advance which shall be a Banking Day
falling within the Drawdown Period on which such Advance is intended to be made.
A Drawdown Notice shall be effective on actual receipt by the Bank and, once
given, shall, subject as provided in clause 3.6.1, be
irrevocable.  No Advances shall be available after the Termination
Date, and subject to the provision of this Agreement more than one Advance
may be made on the same date.

     

    
      	
              2.3  

            	
              Facility
      A

            

    

     

    
      	
              2.3.1  

            	
              Facility
      A shall be made in one Advance on a Banking Day falling within the
      Drawdown Period.

            

    

     

    
      	
              2.3.2  

            	
              Facility
      A shall be made available solely for the purpose set out in
      1.1(i).

            

    

     

    
      	
              2.3.3  

            	
              The
      Advance constituting Facility A shall be made in accordance with
      clause 6.2 and the maximum amount of such Advance shall be
      $195,656,899.82 or such other amount as may be agreed by the
      Bank.

            

    

     

    
      	
              2.3.4  

            	
              The
      Advance constituting Facility A (together with the Advance constituting
      the Initial Revolving Amount) shall be applied in refinancing each Initial
      Ship in the amount set out alongside that Initial Ship in Part 3 of
      Schedule 1.

            

    

     

    
      	
              2.4  

            	
              Facility
      B

            

    

     

    
      	
              2.4.1  

            	
              Each
      Advance of Facility B may only be made on Banking Days falling during the
      Drawdown Period and the amount of each Advance of Facility B shall,
      subject to the following provisions of this clause 2.4, be for such amount
      as is specified in the Drawdown Notice of that
  Advance.

            

    

     

    
      	
              2.4.2  

            	
              The
      Initial Revolving Amount of Facility B shall be made available in one
      Advance solely for the purpose set out in 1.1(ii)(a) and shall be advanced
      at the same time as the Advance constituting Facility A and shall when
      aggregated with Facility A refinance the entire amount outstanding under
      the Existing Loan Agreement.

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
              2.4.3  

            	
              Each
      Advance of Facility B shall be made solely for the purpose set out in
      clause 1.1(ii).

            

    

     

    
      	
              2.4.4  

            	
              Each
      Advance constituting part of Facility B shall be made in accordance with
      clause 6.2 but so that:

            

    

     

    
      	
              (i)  

            	
              Facility
      B shall never exceed $350,000,000 up until 26 March 2008 and thereafter
      shall never exceed $123,000,000;
and

            

    

     

    
      	
              (ii)  

            	
              the
      Initial Revolving Amount shall be up to $144,000,000 or such other amount
      as agreed by the Bank.

            

    

     

    
      	
              2.4.5  

            	
              No
      part of Facility B (other than the Initial Revolving Amount to be made
      available with the Advance constituting Facility A) shall be made
      available unless the vessel which the relevant Additional Owner intends to
      acquire using the relevant intra-group loan from the Borrower has been
      approved by the Bank in its sole discretion as an Additional Ship, which
      approval may only be granted by the Bank if the relevant vessel has met
      all the Additional Ship Selection Criteria.  In relation to the
      acquisition by an Additional Owner of a vessel the Borrower shall be
      required to follow the procedure set out
below:

            

    

     

    
      	
              (a)  
      

            	
              if
      the Borrower wishes to drawdown any part of Facility B the Borrower shall
      first send to the Bank a request (the “Request”) which shall
      include the information described below and, if so required by the
      Bank, a copy of the inspection report for the relevant
    vessel;

            

    

     

    
      	
              (b)  

            	
              where
      the Request relates to a second-hand vessel, the Request shall include the
      following information:

            

    

     

    Name of
vessel

    Flag

    Official
Number

    IMO
Number

    Purchase
price

    Year
built

    Type of
vessel

    Gross
tonnage/net tonnage

    Deadweight/cubic
capacity/TEU of vessel

    Classification
Society

    Class

    Seller

    Expected
delivery date

    Charter
information (if any), including name and credit rating (if any) of charterer,
charter rate, % commission, period of charter, options (if any)

    Typical
running costs for this type of vessel

    Next
drydock: expected date of drydock and estimated amount

    Date of
next special survey

    Requested
loan amount

    Lightweight
displacement of vessel;

    

    
      	
              (c)  

            	
              where
      the Request relates to a vessel which is a newbuilding, the Request shall
      include the following information:

            

    

     

    Builder

    Hull
No.

    Type of
vessel

    Gross
tonnage/net tonnage

    Deadweight/cubic
capacity/TEU of vessel

    Date of
Contract

    Date keel
laid

    Original
Contract Price

    Purchase
price

    Payment
terms under Contract

    Seller

    Scheduled
delivery date

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Date when
Buyer has option to cancel the Contract for excessive delay

    Name of
Refund Guarantor

    Type of
Refund Guarantee

    Classification
Society

    Class

    Flag on
delivery.

     

    
      	
              2.4.6  

            	
              With
      respect to any vessel to be financed under Facility B, the Bank will use
      its best efforts to respond to any Request as soon as possible but in any
      event within five (5) Banking Days of the receipt of the
      Request.

            

    

     

    
      	
              2.4.7  

            	
              No
      Advance of Facility B shall:

            

    

     

    
      	
              (a)  

            	
              exceed
      whichever shall be the lesser of (i) the Contract Price of the Additional
      Ship to be financed by way of such Advance of Facility B and (ii) the Fair
      Market Value of the Additional Ship to be financed by way of such Advance
      of Facility B and in the case where the Additional Ship is a newbuilding,
      the Expected Project Costs approved by the Bank in its sole discretion;
      nor

            

    

     

    
      	
              (b) 
        

            	
              be
      applied in financing any Additional Ship which has not been approved by
      the Bank as an Additional Ship (the “Approval”) in accordance
      with clauses 2.4.5 and 2.4.6.

            

    

     

    
      	
              2.4.8  

            	
              In
      relation to an Additional Ship which is a newbuilding, Contract Instalment
      Advances and a Delivery Date Advance for that Additional Ship shall be in
      sums of up to the amounts set out in the relevant Contract and applied in
      or towards payment of the instalment of the Contract Price for that
      Additional Ship and may be made on any Banking Day falling within the
      Drawdown Period relative to Facility B up to and in the case of the
      Delivery Date Advance upon the Delivery Date for that Additional Ship
      subject to the relevant instalment of the Contract Price for that
      Additional Ship having become due and payable by the relevant Owner under
      such Contract.

            

    

     

    
      	
              2.4.9  

            	
              Any
      Advance constituting a Contract Instalment Advance or a Delivery Date
      Advance shall be applied in paying such relevant instalment of the
      relevant Contract Price and shall be paid by the Bank to the relevant
      Builder or, as the case may be, Seller and any Advance which is to be
      applied in meeting Expected Project Costs approved by the Bank in its sole
      discretion shall be paid by the Bank to the credit of the relevant
      Operating Account as appropriate.

            

    

     

    
      	
              2.4.19  

            	
              Each
      Advance of Facility B shall be subject
to:

            

    

     

    
      	
              (a)
        

            	
              the
      ratio of the Loan to the Fair Market Value of all the Mortgaged Ships not
      exceeding 75% both prior to and immediately following the drawdown of the
      relevant Advance of Facility B; and

            

    

     

    
      	
              (b)  

            	
              the
      aggregate of all Advances of Facility B drawndown at any relevant time
      never exceeding the Total Facility B Commitment;
  and

            

    

     

    
      	
              (c)  

            	
              the
      making of such Advance of Facility B not resulting in the Security Value
      being less than the Security
Requirement.

            

    

     

    
      	
              2.4.11  

            	
              The
      parties hereby agree that from 26 March 2008 Facility A is cancelled and
      no further Advances shall be made under Facility B other than those
      Advances that the Bank has agreed to make for the purposes of financing
      part of the second contract instalments payable under the Contracts
      relating to the Additional Ships which are newbuildings with hull numbers
      S-1025, S-1026, S-1027, S-1029, S-1031 and S-1033 (the “Newbuildings”). Subject
      to the terms of this Agreement the Bank has agreed to make available one
      Advance per Newbuilding each in the maximum sum of five million Dollars
      ($5,000,000).

            

    

     

    
      	
              2.5  

            	
              Amount
      of Advance

            

    

     

    The
Borrower may not deliver a Drawdown Notice if the amount of the relevant Advance
is less than $5,000,000.

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              2.6  

            	
              Expected
      Project Costs

            

    

     

    No
Advance of Facility B shall constitute Expected Project Costs
only.  Any Drawdown Notices for Advances constituting (in part)
Expected Project Costs shall be accompanied with invoices or pro-forma estimate
invoices itemised in a written inventory each in a form and substance acceptable
to the Bank in its sole discretion certified by an officer of the Borrower and
presented to the Bank no later than fifteen (15) Banking Days before the
relevant Drawdown Date.

     

    
      	
              2.7  

            	
              Availability

            

    

     

    Upon
receipt of a Drawdown Notice complying with the terms of this Agreement the Bank
shall, subject to the provisions of clause 9, on the Drawdown Date for the
relevant Advance make such Advance available to the Borrower in accordance with
clause 6.2.  The Borrower acknowledges that payment of an Advance
to a Seller or any Contract Instalment Advance or Delivery Date Advance to a
Builder in accordance with clause 6.2 shall satisfy the obligation of the
Bank to lend the corresponding portion of the Commitment to the Borrower under
this Agreement.

     

    
      	
              2.8  

            	
              Termination
      of Commitment

            

    

     

    
      	
              2.8.1  

            	
              If
      the Commitment is not drawn down in full by the end of the Drawdown
      Period, the undrawn Commitment shall thereupon be automatically
      cancelled.

            

    

     

    
      	
              2.8.2  

            	
              The
      Borrower shall upon three (3) Banking Days’ notice to the Bank be entitled
      to permanently reduce or terminate any undrawn portion of Facility B
      (being five million Dollars ($5,000,000) or any larger sum which is an
      integral multiple of five million Dollars ($5,000,000)) without premium or
      penalty.

            

    

     

    
      	
              2.9  

            	
              Application
      of proceeds

            

    

     

    Without
prejudice to the Borrower’s obligations under clause 8.1.3, the Bank shall
have no responsibility for the application of proceeds of the Loan by the
Borrower.

     

    
      	
              3  

            	
              Interest
      and Interest Periods

            

    

     

    
      	
              3.1  

            	
              Normal
      interest rate

            

    

     

    
      	
              3.1.1  

            	
              Subject
      to paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement,
      the Borrower shall pay interest on Facility A, Facility B or, as the case
      may be the Loan in respect of each Interest Period relating thereto on
      each Interest Payment Date (or, in the case of Interest Periods of more
      than three (3) months, by instalments, the first instalment three (3)
      months from the commencement of the Interest Period and the subsequent
      instalments at intervals of three (3) months or, if shorter, the
      period from the date of the preceding instalment until the Interest
      Payment Date relative to such Interest Period) at the rate per annum
      determined by the Bank to be the aggregate of (a) the relevant Margin, (b)
      the Additional Cost and (c) LIBOR for such Interest
  Period.

            

    

     

    
      	
              3.1.2  

            	
              For
      the purposes of this clause 3, the Bank shall on each Margin Set Date,
      following the Bank’s determination of the Security Value, which
      determination shall as between the Bank and the Borrower be conclusive,
      advise the Borrower of the Margin payable in respect of Facility A,
      Facility B or, as the case may be, the Loan during each quarter commencing
      from the relevant Margin Set Date.

            

    

     

    
      	
              3.2  

            	
              Selection
      of Interest Periods

            

    

     

    Subject
to (a) paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement and
(b) the availability of funds to the Bank in the normal course of dealing in the
London Interbank Market for an Interest Period of the duration requested, the
Borrower may by notice received by the Bank not later than 11a.m. on the second
Banking Day before the beginning of each Interest Period in relation to each
Advance or, as the case may be Facility A or, as the case may be, Facility B or,
as the case may be, the Loan specify whether such Interest Period shall have a
duration of three (3) or six (6) months or such other period as the Borrower may
select and the Bank may, in its absolute discretion, agree.  Provided
always that if on any date upon which an Interest Period falls to be selected by
the Borrower pursuant to this clause 3.2, a Transaction or Transactions (which
is/are effective or which shall become effective during the relevant Interest
Period) shall have been entered into between the Bank and the Borrower pursuant
to the Master Swap Agreement LIBOR shall during the period of any such
Transaction(s) and for an amount equal to the notional amount of such
Transaction(s) be determined by reference to the rate for deposits in Dollars
displayed on Telerate page 3750 (British Bankers’ Association Settlement Rates)
in accordance with the proviso to the definition of LIBOR.  For the
avoidance of doubt, LIBOR for that Advance or, as the case may be Facility A or,
as the case may be, Facility B or, as the case may be part of the Loan which
exceeds the notional amount of the Transaction(s) shall be determined by
reference to the rate for deposits in Dollars referred to in the definition of
LIBOR but excluding the proviso to such definition.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	
              3.3  

            	
              Determination of
      Interest Periods

            

    

     

    Every
Interest Period shall be of the duration specified by the Borrower pursuant to
clause 3.2 but so that:

     

    
      	
              3.3.1  

            	
              the
      initial Interest Period in respect of the Advance constituting Facility A
      and the Advance constituting the Initial Revolving Amount shall commence
      on the date Facility A and the Advance constituting the Initial Revolving
      Amount under the Loan Agreement are made and each subsequent Interest
      Period of Facility A and the Advance constituting the Initial Revolving
      Amount shall commence on the last day of the previous Interest Period
      relating to Facility A and the Advance constituting the Initial
      Revolving Amount;

            

    

     

    
      	
              3.3.2  

            	
              the
      initial Interest Period in respect of each Advance of Facility B (after
      the Advance constituting the Initial Revolving Amount) shall commence on
      the date of the making of that Advance and each subsequent Interest period
      of each Advance shall commence on the last day of the previous Interest
      Period relating to that Advance;

            

    

     

    
      	
              3.3.3  

            	
              if
      any Interest Period for any Advance and/or Facility A and/or Facility B
      and/or the Loan would otherwise overrun a Final Repayment Date, then, in
      the case of the Final Repayment Date, such Interest Period shall end on
      such Repayment Date, and in the case of any other Repayment Date or
      Repayment Dates (as the case may be) shall be divided into parts so that
      there is one part in the amount of the repayment instalment due on each
      Repayment Date falling during that Interest Period and having an Interest
      Period ending on the relevant Repayment Date and another part in the
      amount of the balance of the relevant Advance and/or Facility A and/or
      Facility B and/or the Loan as the case may be having an Interest Period
      ascertained in accordance with clause 3.2 and the other provisions of
      this clause 3.3;

            

    

     

    
      	
              3.3.4  

            	
              if
      the Borrower fails to specify the duration of an Interest Period in
      accordance with the provisions of clause 3.2 and this clause 3.3
      such Interest Period shall have a duration of three (3) months or such
      other period as shall comply with this
  clause 3.3;

            

    

     

    
      	
              3.3.5  

            	
              for
      the avoidance of doubt, during the currency of any Transaction, Interest
      Periods in respect of each Advance or, as the case may be, Facility A or,
      as the case may be, Facility B or, as the case may be, the Loan shall
      coincide with the payment dates set out in such Transaction and the rate
      of interest shall coincide with the fixed rate of interest determined in
      accordance with such Transaction;
and

            

    

     

    
      	
              3.3.6  

            	
              following
      consultation with the Borrower the Bank shall be entitled to require that
      the Interest Periods relating to the Loan or any part thereof to be
      consolidated.

            

    

     

    
      	
              3.4  

            	
              Default
      interest

            

    

     

    If the
Borrower fails to pay any sum (including, without limitation, any sum payable
pursuant to this clause 3.4) on its due date for payment under any of the
Security Documents, the Borrower shall pay interest on such sum on demand from
the due date up to the date of actual payment (as well after as before judgment)
at a rate determined by the Bank pursuant to this
clause 3.4.  The period beginning on such due date and ending on
such date of payment shall be divided into successive periods of not more than
three (3) months as selected by the Bank each of which (other than the first,
which shall commence on such due date) shall commence on the last day of the
preceding such period.  The rate of interest applicable to each such
period shall be the aggregate (as determined by the Bank) of (a) two per cent
(2%) per annum, (b) the relevant Margin (c) the Additional Cost and (d) LIBOR
for such period. Such interest shall be due and 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, provided that if such
unpaid sum is an amount of principal which become due and payable by reason of a
declaration by the Bank under clause 10.2.2 or a prepayment pursuant to
clauses 4.3, 4.4, 4.5, 8.2 or 12.1, on a date other than an Interest
Payment Date relating thereto, the first such period selected by the Bank shall
be of a duration equal to the period between the due date of such principal sum
and such Interest Payment Date and interest shall be payable on such principal
sum during such period at a rate two per cent (2%) above the rate applicable
thereto immediately before it shall have become so due and
payable.  If, for the reasons specified in clause 3.6.1, the Bank
is unable to determine a rate in accordance with the foregoing provisions of this
clause 3.4, interest on any sum not 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 relevant Margin and the cost of funds (including
Additional Cost) to the Bank.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	
              3.5  

            	
              Notification
      of Interest Periods and interest
rate

            

    

     

    The Bank
shall notify the Borrower promptly of the duration of each Interest Period and
of each rate of interest determined by it under this clause 3.

     

    
      	
              3.6  

            	
              Market
      disruption; non-availability

            

    

     

    
      	
              3.6.1  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              that
      deposits in Dollars are not available to the Bank in the London Interbank
      Market in the ordinary course of business in sufficient amounts to fund
      the Loan for such 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 its issue.  After the giving
of any Determination Notice the undrawn amount of the Commitment shall not be
borrowed until notice to the contrary is given to the Borrower by the
Bank.

     

    
      	
              3.6.2  

            	
              During
      the period of ten (10) days after any Determination Notice has been given
      by the Bank under clause 3.6.1, 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 including Additional Cost (if any) to the Bank
      equivalent to the relevant 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 clause 3.6.1 continues to exist whereupon
      the normal interest rate fixing provisions of this Agreement shall
      apply.

            

    

     

    
      	
              4  

            	
              Repayment,
      prepayment and reborrowing

            

    

     

    
      	
              4.1  

            	
              Repayment
      of Facility A

            

    

     

    Subject
always to the provisions of this clause 4.1, the Borrower shall repay that part
of the Loan forming Facility A by fifteen (15) instalments, one such instalment
to be repaid on each of the Repayment Dates relative to Facility A. Subject to
the provisions of this Agreement, the amount of the first such instalment shall
be ten million six hundred and fifty six thousand eight hundred and ninety nine
Dollars and eighty two cents ($10,656,899.82) each of the second instalment to
the fourteenth instalment shall be ten million five hundred thousand Dollars
($10,500,000) and the amount of the last instalment shall be forty eight million
five hundred thousand Dollars ($48,500,000) (comprising of a repayment
instalment in the amount of ten million five hundred thousand Dollars
($10,500,000) and a balloon payment in the amount of thirty eight million
Dollars ($38,000,000)).

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    If
Facility A is not drawn in full, the amount of each repayment instalment
relative to Facility A shall be reduced proportionately.

     

    
      	
              4.2  

            	
              Repayment
      of Facility B

            

    

     

    
      	
              4.2.1  

            	
              Subject
      always to the provisions of this clause 4.2 the Borrower shall repay that
      part of the Loan forming Facility B (including without limitation the
      Initial Revolving Amount) by twenty (20) instalments.  One such
      instalment shall be repaid on each of the Repayment Dates relative to
      Facility B.  Subject to the provisions of this Agreement the
      amount of each such instalment shall be equal to the Facility B Repayment
      Amount as determined by the Bank and notified to the
      Borrower.  For the avoidance of doubt as from 26 March 2008 (but
      following the reduction of the Total Facility  B Commitment to
      one hundred and twenty three million Dollars ($123,000,000) pursuant to
      clause 4.2.2 and subject to the Borrower drawing down the entire available
      amount of Facility B) the amount of each of the first to the nineteenth
      instalments shall be four million and fifty thousand Dollars ($4,050,000)
      and the amount of the twentieth and final instalment shall be forty six
      million and fifty thousand Dollars ($46,050,000) (comprising a repayment
      instalment of four million and fifty thousand Dollars ($4,050,000) and a
      balloon repayment in the amount of forty two million Dollars
      ($42,000,000).

            

    

     

    
      	
              4.2.2  

            	
              The
      Total Facility B Commitment shall be reduced by the sum of thirty five
      million Dollars ($35,000,000) to one hundred and twenty three million
      Dollars ($123,000,000) on 26 March 2008 and thereafter the Total Facility
      B Commitment shall be reduced on each Reduction Date by a sum equal to
      each of the Facility B Repayment Amounts referred to in clause 4.2.1 so
      that on the Final Reduction Date the Total Facility B Commitment shall be
      reduced to zero.  The Committed Facility B Amount shall be
      reduced on each Reduction Date by the same percentage amount as the Total
      Facility B Commitment and to zero on the Final Reduction Date and the
      Borrower shall on each Repayment Date relative to Facility B repay such
      further amount as shall ensure that the aggregate of all Advances of
      Facility B never exceed the Total Facility B Commitment or the Committed
      Facility B Amount at any relevant
time.

            

    

     

    
      	
              4.3  

            	
              Voluntary
      prepayment

            

    

     

    
      	
              4.3.1  

            	
              Prepayment
      of the Loan

            

    

     

    The
Borrower may, provided that the Bank shall have received from the Borrower not
less than fourteen (14) days notice of its intention to make such prepayment
specifying the amount to be prepaid, prepay Facility A or Facility B in the
Borrower’s option Loan in whole or part (being five hundred thousand Dollars
($500,000) or any larger sum which is an integral multiple of five hundred
thousand Dollars ($500,000)):

     

    
      	
              (a)  

            	
              on
      any Interest Payment Date relating to the part of the Loan being prepaid
      together with any amounts payable under clause 11 and accrued
      interest and commitment commission to the date of prepayment and any other
      sums then payable under this Agreement and/or the Master Swap Agreement
      and/or the other Security Documents or any of them in respect of the Loan;
      and

            

    

     

    
      	
              (b)  

            	
              at
      any other time upon payment to the Bank
of:

            

    

     

    
      	
              (i)  

            	
              accrued
      interest to the date of prepayment;
and

            

    

     

    
      	
              (ii)  

            	
              such
      additional sum as the Bank in its absolute discretion shall determine to
      be the loss, cost and expense incurred by the Bank, including in relation
      to the Master Swap Agreement, as a result of the prepayment not being made
      on an Interest Payment Date for any part of the Loan being prepaid;
      and

            

    

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              (iii)  

            	
              any
      other sums then payable under this Agreement and/or the Master Swap
      Agreement and/or the other Security Documents or any of them (including
      loss of Margin on the amount prepaid to the end of the then current
      Interest Period).

            

    

     

    
      	
              4.4  

            	
              Master
      Swap Agreement, Repayments and
Prepayments

            

    

     

    
      	
              4.4.1  

            	
              Notwithstanding
      any provision of the Master Swap Agreement to the contrary, in the case of
      a prepayment of all or part of the Loan (including, without limit, upon a
      Total Loss in accordance with clause 4.5 and under clause 8.4)
      then subject to clause 4.4.2 the Bank shall be entitled but not
      obliged (and, where relevant, may do without the consent of the Borrower,
      where it would otherwise be required whether under the Master Swap
      Agreement or otherwise) to amend, re-book, supplement, cancel, close out,
      net out, terminate, liquidate, transfer or assign all or any part of the
      rights, benefits and obligations created by any Transaction and/or the
      Master
      Swap Agreement and/or to obtain or re-establish any hedge or related
      trading position in any manner and with any person the Bank in its
      absolute discretion may determine and both the Bank’s and the Borrower’s
      continuing obligations under any Transaction and/or the Master Swap
      Agreement shall, unless agreed otherwise by the Bank, be calculated so far
      as the Bank considers it practicable by reference to the amended repayment
      Schedule for the Loan taking into account the fact that less than the
      full amount of the Loan remains
  outstanding.

            

    

     

    
      	
              4.4.2  

            	
              If
      following a prepayment under this Agreement and the Bank in its absolute
      discretion agrees, following a written request of the Borrower, that the
      Borrower may be permitted to maintain all or part of a Transaction in an
      amount not wholly matched with or linked to all or part of the Loan, the
      Borrower shall within ten (10) days of being notified by the Bank of such
      requirement, provide the Bank with, or procure the provision to the Bank
      of, such additional security as shall in the opinion of the Bank be
      adequate to secure the performance of such Transaction, which additional
      security shall take such form, be constituted by such documentation and be
      entered into between such parties, as the Bank in its absolute discretion
      may approve or require, and each document comprising such additional
      security shall constitute a Credit Support
  Document.

            

    

     

    
      	
              4.4.3  

            	
              The
      Borrower shall on the first written demand of the Bank indemnify the Bank
      in respect of all losses, costs and expenses (including, but not limited
      to, legal costs and expenses) incurred or sustained by the Bank as a
      consequence of or in relation to the effecting of any matter or
      transactions referred to in this
  clause 4.4.

            

    

     

    
      	
              4.4.4  

            	
              Notwithstanding
      any provision of the Master Swap Agreement to the contrary, if for any
      reason a Transaction has been entered into but the Loan is not drawn down
      under this Agreement then, subject to clause 4.4.5, the Bank shall be
      entitled but not obliged (and, where relevant, may do so without the
      consent of the Borrower where it would otherwise be required whether under
      the Master Swap Agreement or otherwise) to amend, re-book, supplement,
      cancel, close out, net out, terminate, liquidate, transfer or assign all
      or any part of the rights, benefits and obligations created by such
      Transaction and/or the Master Swap Agreement and/or to obtain or
      re-establish any hedge or related trading position in any manner and with
      any person the Bank in its absolute discretion may
    determine.

            

    

     

    
      	
              4.4.5  

            	
              If
      a Transaction has been entered into but the Loan is not drawn down under
      this Agreement and the Bank in its absolute discretion agrees, following a
      written request of the Borrower, that the Borrower may be permitted to
      maintain all or part of a Transaction, the Borrower shall within ten (10)
      days of being notified by the Bank of such requirement, provide the Bank
      with, or procure the provision to the Bank of, such additional security as
      shall in the opinion of the Bank be adequate to secure the performance of
      such Transaction, which additional security shall take such form, be
      constituted by such documentation and be entered into between such
      parties, as the Bank in its absolute discretion may approve or require,
      and each document comprising such additional security shall constitute a
      Credit Support Document for the purposes of the Master Swap Agreement
      and/or otherwise.

            

    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    Without
prejudice to or limitation of the obligations of the Borrower under
clause 4.4.3, in the event that the Bank exercises any of its rights under
clauses 4.4.1, 4.4.2, 4.4.4 and 4.4.5 and such exercise results in all or
part of a Transaction being terminated such Transaction or the part thereof
terminated (which shall for the purposes hereof be treated as a separate
Transaction) in each case shall be treated under the Master Swap Agreement in
the same manner as if it were a Terminated Transaction (as defined in
Section 14 of the Master Swap Agreement) pursuant to an Event of Default
(as so defined in that Section 14) by the Borrower and, accordingly, the
Bank shall be permitted to recover from the Borrower a payment for early
termination calculated in accordance with the provisions of Section 6(e)(i)
of the Master Swap Agreement in respect of such Transaction.

     

    
      	
              4.5  

            	
              Prepayment
      on Total Loss and sale

            

    

     

    On a Ship
becoming a Total Loss (or suffering damage or being involved in an incident
which in the opinion of the Bank may result in such Ship being subsequently
determined to be a Total Loss) before the relevant Advance for such Ship is
drawn down, the obligation of the Bank:

     

    
      	
              (a)  

            	
              in
      the case of an Initial Ship to make available the Advance constituting the
      Facility A or the Advance constituting the Initial Revolving Amount for
      such Initial Ship; or

            

    

     

    
      	
              (b)  

            	
              in
      the case of an Additional Ship to make that Advance of Facility B for such
      Additional Ship

            

    

     

    shall
immediately cease and in the case of an Initial Ship the Total Facility A
Commitment or at the option of the Bank, the Initial Revolving Amount shall be
reduced by the amount that would have been applied in refinancing the Initial
Ship as set out in Schedule 1, Part 3.

     

    On the
date ninety (90) days after that on which a Mortgaged Ship became a Total Loss
or immediately prior to the completion of the sale of a Mortgaged Ship or, if
earlier, on the date upon which the insurance proceeds in respect of such Total
Loss are or Requisition Compensation (as defined in the relevant Ship Security
Documents) is received by the relevant Owner (or the Bank pursuant to the
Security Documents), the Borrower shall prepay:

     

    
      	
              (a)  

            	
              in
      the case of the Initial Ships that part of the Advance constituting
      Facility A or the Initial Revolving Amount as was applied in refinancing
      the relevant Initial Ship and set out in Schedule 1, Part 3;
      or

            

    

     

    
      	
              (b)  

            	
              in
      the case of the Additional Ships the relevant Advance of Facility B
      applied in the financing of such Additional Ship;
  or

            

    

     

    
      	
              (c)  

            	
              such
      greater proportion of the Loan as the Bank may in its sole discretion
      determine to be prepaid but in any event such amount as shall ensure that
      on the date of such prepayment the Security Value is not less than the
      Security Requirement.

            

    

     

    For the
purpose of this Agreement, a Total Loss shall be deemed to have
occurred:

     

    
      	
              4.5.1  

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

            

    

     

    
      	
              4.5.2  

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

            

    

     

    
      	
              4.5.3  

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

            

    

     

    
      	
              4.5.4  

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

            

    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              4.5.5  

            	
              in
      the case of hijacking, theft, condemnation, capture, seizure, arrest,
      detention or confiscation of a Ship (other than where the same amounts to
      Compulsory Acquisition of such Ship) by any Government Entity, or by
      persons purporting to act on behalf of any Government Entity, which
      deprives the relevant Owner of the use of such Ship for more than thirty
      (30) days, upon the expiry of the period of thirty (30) days after the
      date upon which the relevant hijacking, theft, condemnation, capture,
      seizure, arrest, detention or confiscation
  occurred.

            

    

     

    
      	
              4.6  

            	
              Amounts
      payable on prepayment

            

    

     

    Any
prepayment of all or part of the Loan under this Agreement shall be made
together with (a) accrued interest on the amount to be prepaid to the date of
such prepayment, any additional amount payable under clause 6.6 or 12.2 and
(b) all other sums payable by the Borrower to the Bank under this Agreement, the
Master Swap Agreement or any of the other Security Documents including, without
limitation, any amounts payable under clause 11.

    
      	
              4.7  

            	
              Notice
      of prepayment; reduction of repayment
  instalments

            

    

     

    No
prepayment may be effected under clause 4.3 unless the Borrower shall have
given the Bank at least fourteen (14) days' notice of its intention to make such
prepayment.  Every notice of prepayment shall be effective only on
actual receipt by the Bank, shall be irrevocable, shall specify (i) the amount
to be prepaid, and (ii) whether the prepayment is to be applied against Facility
A and/or any Advance(s) of Facility B and shall oblige the Borrower to make such
prepayment on the date specified.  No amount prepaid may be
reborrowed.  Any amount prepaid pursuant to:

     

    
      	
              4.7.1  

            	
              clause 4.3
      shall be applied (a) in the case of Facility A first in reducing the
      repayment instalments on a pro rata basis and then the balloon payment in
      each case as set out in clause 4.1; and (b) in the case of Facility B
      in reducing the repayment instalments under clause 4.2.1 on a pro rata
      basis; and

            

    

     

    
      	
              4.7.2  

            	
              clause
      4.4 following the sale or Total Loss of any of the Ships shall be applied
      first in reducing the repayment instalments of the Advance pursuant to
      which the relevant Ship was financed or refinanced (including for the
      avoidance of doubt the balloon payments) on a pro rata basis and
      thereafter (and to the extent that the relevant Advance is repaid in full)
      shall be applied to the extent required pursuant to clause 4.5 as between
      all other Advances on a pro rata basis and in reducing the repayment
      instalments of such other Advances on a pro rata
  basis.

            

    

     

    The
Borrower may not prepay the Loan or any part thereof save as expressly provided
in this Agreement.

     

    
      	
              5  

            	
              Commitment
      commission, fees and expenses

            

    

     

    
      	
              5.1  

            	
              Fees

            

    

     

    The
Borrower shall pay to the Bank:

     

    
      	
              5.1.1  

            	
              on
      the date of this Agreement an arrangement fee of one million thirty
      thousand Dollars ($1,030,000);

            

    

     

    
      	
              5.1.2  

            	
              quarterly
      in arrears and at the end of the Drawdown Period, commitment commission
      computed from the date of this Agreement at the rate of zero point three
      five per cent (0.35%) per annum on the daily undrawn amount of the Loan;
      and

            

    

     

    The fee
referred to in clause 5.1.1 and the commitment commission referred to in
clause 5.1.2 shall be payable by the Borrower to the Bank whether or not
any part or only part of the Commitment is ever advanced.

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
              5.2  

            	
              Expenses

            

    

     

    The
Borrower shall pay to the Bank on a full indemnity basis on demand all expenses
(including legal, printing and out-of-pocket expenses) incurred by the
Bank:

     

    
      	
              5.2.1  

            	
              in
      connection with the negotiation, preparation, execution and, where
      relevant, registration of the Security Documents and of any amendment or
      extension of or the granting of any waiver or consent under, any of the
      Security Documents; and

            

    

     

    
      	
              5.2.2  

            	
              in
      contemplation of, or otherwise in connection with, the enforcement of, or
      preservation of any rights under, any of the Security Documents, or
      otherwise in respect of the moneys owing under any of the Security
      Documents together with interest at the rate referred to in
      clause 3.4 from the date on which such expenses were incurred to the
      date of payment (as well after as before
  judgment).

            

    

     

    
      	
              5.3  

            	
              Value
      added tax

            

    

     

    All fees
and expenses payable pursuant to this clause 5 shall be paid together with
value added tax or any similar tax (if any) properly chargeable
thereon.  Any value added tax chargeable in respect of any services
supplied by the Bank under this Agreement shall, on delivery of the value added
tax invoice, be paid in addition to any sum agreed to be paid
hereunder.

     

    
      	
              5.4  

            	
              Stamp
      and other duties

            

    

     

    The
Borrower shall pay all stamp, documentary, registration or other like duties or
taxes (including any duties or taxes payable by the Bank) (if any) imposed on or
in connection with any of the Underlying Documents, the Security Documents or
the Loan and shall indemnify the Bank against any liability arising by reason of
any delay or omission by the Borrower to pay such duties or taxes.

     

    
      	
              6  

            	
              Payments
      and taxes; accounts and
calculations

            

    

     

    
      	
              6.1  

            	
              No
      set-off or counterclaim

            

    

     

    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 relevant
third parties.  Accordingly, subject to paragraphs (c) and (i) of Part
5 of the Schedule to the Master Swap Agreement, 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, subject as provided in clause 6.6,
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
American Express Bank Limited, 23rd Floor, American Express Tower, 200 Vesey
Street, New York NY 10285-2300, USA, Account Number 000261123 SWIFT
Code:  AEIBUS33 (with a direct tested telex advice to the Bank) or to
such other account at such bank in such place as the Bank may from time to time
specify for this purpose.

     

    
      	
              6.2  

            	
              Payment
      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 relevant Drawdown Date to the
account of the Borrower or the account of the relevant Seller specified in the
relevant Drawdown Notice.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    
      	
              6.3  

            	
              Non-Banking
      Days

            

    

     

    When any
payment under any of the Security Documents would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be extended to the
next following Banking Day unless such Banking Day falls in the next calendar
month in which case payment shall be made on the immediately preceding Banking
Day.

     

    
      	
              6.4  

            	
              Calculations

            

    

     

    All
interest and other payments of an annual nature under any of the Security
Documents shall accrue from day to day and be calculated on the basis of actual
days elapsed and a 360 day year.

     

    
      	
              6.5  

            	
              Certificates
      conclusive

            

    

     

    Any
certificate or determination of the Bank as to any rate of interest or any other
amount pursuant to and for the purposes of any of the Security Documents shall,
in the absence of manifest error, be conclusive and binding on the
Borrower.

     

    
      	
              6.6  

            	
              Grossing-up
      for Taxes

            

    

     

    If at any
time the Borrower is required to make any deduction or withholding in respect of
Taxes 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 (and retains, free from any
liability in respect of such deduction or withholding), a net sum equal to the
sum which it would have received had no such deduction or withholding been
required to be made and the Borrower shall indemnify the Bank against any losses
or costs incurred by it by reason of any failure of the Borrower to make any
such deduction or withholding or by reason of any increased payment not being
made on the due date for such payment.  The Borrower shall promptly
deliver to the Bank any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding as
aforesaid.

     

    
      	
              6.7  

            	
              Loan
      account

            

    

     

    The Bank
shall maintain, in accordance with its usual practice, an account (which shall
be the “account current”
referred to in the Mortgages governed by the laws of Cyprus) evidencing the
amounts from time to time lent by, owing to and paid to it under the Security
Documents.  Such account shall, in the absence of manifest error, be
conclusive as to the amount from time to time owing by the Borrower under the
Security Documents.

     

    
      	
              7  

            	
              Representations
      and warranties

            

    

     

    
      	
              7.1  

            	
              Continuing
      representations and warranties

            

    

     

    The
Borrower represents and warrants to the Bank that:

     

    
      	
              7.1.1  

            	
              Due
      incorporation

            

    

     

    the
Borrower and each of the other Security Parties are duly incorporated and
validly existing in good standing under the laws of their respective countries
of incorporation as limited liability companies and, in case of the Borrower and
each of those Initial Owners incorporated in either the Republic of Liberia or
the Marshall Islands, incorporated in the Republic of Liberia or the Marshall
Islands as a corporation having limited liability, and have power to carry on
their respective businesses as they are now being conducted and to own their
respective property and other assets;

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    
      	
              7.1.2  

            	
              Corporate
      power

            

    

     

    the
Borrower has power to execute, deliver and perform its obligations under the
Underlying Documents and the Borrower's Security Documents to which it is or is
to be a party and to borrow the Commitment and each of the other Security
Parties has power to execute and deliver and perform its obligations under the
Security Documents and the Underlying 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 and no limitation
on the powers of the Borrower to borrow will be exceeded as a result of
borrowing the Loan;

     

    
      	
              7.1.3  

            	
              Binding
      obligations

            

    

     

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

     

    
      	
              7.1.4  

            	
              No
      conflict with other obligations

            

    

     

    the
execution and delivery of, the performance of its obligations under, and
compliance with the provisions of, the relevant Underlying Documents and 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 the Borrower or any other Security Party is subject, (ii)
conflict with, or result in any breach of any of the terms of, or constitute a
default under, any agreement or other instrument to which the Borrower or any
other Security Party is a party or is subject or by which it or any of its
property is bound, (iii) contravene or conflict with any provision of the
memorandum and articles of association/articles of incorporation/by-laws or
other constitutional documents of the Borrower or any other Security Party or
(iv) result in the creation or imposition of or oblige the Borrower or any of
its Related Companies or any other Security Party to create any Encumbrance
(other than a Permitted Encumbrance) on any of the undertakings, assets, rights
or revenues Borrower or its Related Companies or any other Security
Party;

     

    
      	
              7.1.5  

            	
              No
      litigation

            

    

     

    no
litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Borrower, threatened against the
Borrower or any of its Related Companies or any other Security Party which could
have a material adverse effect on the business, assets or financial condition of
any of the Borrower or any of its Related Companies or any other Security
Party;

     

    
      	
              7.1.6  

            	
              No
      filings required

            

    

     

    save for
the registration of the Mortgages in the relevant register under the laws of the
relevant Flag State through the relevant Registry it is not necessary to ensure
the legality, validity, enforceability or admissibility in evidence of any of
the Underlying Documents or any of the Security Documents that they or any other
instrument be notarised, filed, recorded, registered or enrolled in any court,
public office or elsewhere in any Relevant Jurisdiction or that any stamp,
registration or similar tax or charge be paid in any Relevant Jurisdiction on or
in relation to the Underlying Documents, the Security Documents or any of them
and each of the Underlying Documents and Security Documents is in proper form
for its enforcement in the courts of each Relevant Jurisdiction;

     

    
      	
              7.1.7  

            	
              Choice
      of law

            

    

     

    the
choice of English law to govern the Underlying Documents and the Security
Documents (other than the Mortgages) and the choice of Cyprus law to govern the
Cyprus Mortgages and Deeds of Covenants, the choice of Liberian law to govern
the Liberian Mortgages and the choice of Marshall Islands law to govern the
Marshall Island Mortgages and the submissions by the Security Parties to the
non-exclusive jurisdiction of the English courts are valid and
binding;

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    
      	
              7.1.8  

            	
              No
      immunity

            

    

     

    neither
the Borrower nor any other Security Party nor any of their respective assets 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 judgement, execution or other enforcement);

     

    
      	
              7.1.9  

            	
              Financial
      statements correct and complete

            

    

     

    the
audited financial statements of the Borrower and the audited consolidated
financial statements of the Borrower and its Related Companies in respect of the
financial year ended on 31 December 2004 as delivered to the Bank have been
prepared in accordance with GAAP and present fairly and accurately the financial
position of the Borrower and the consolidated financial position of the Borrower
and its Related Companies respectively as at such date and the results of the
operations of the Borrower and the consolidated results of the operations
of the Borrower and its Related Companies respectively for the financial year
ended on such date and, as at such date, neither the Borrower nor any of its
Related Companies had 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;

     

    
      	
              7.1.10  

            	
              Consents
      obtained

            

    

     

    every
consent, authorisation, licence or approval of, or registration with or
declaration to, governmental or public bodies or authorities or courts required
by any Security Party to authorise, or required by any Security Party in
connection with, the execution, delivery, validity, enforceability or
admissibility in evidence of the Underlying Documents and each of the Security
Documents or the performance by each Security Party of its obligations under the
Underlying Documents and the Security Documents has been obtained or made and is
in full force and effect and there has been no default in the observance of any
of the conditions or restrictions (if any) imposed in, or in connection with,
any of the same; and

     

    
      	
              7.1.11  

            	
              No
      money laundering

            

    

     

    in
relation to the borrowing by the Borrower of the Loan, the performance and
discharge of its obligations and liabilities under this Agreement and the
transactions and other arrangements effected or contemplated by this Agreement,
the Borrower is acting for its own accounts and that the foregoing will not
involve or lead to contravention of any law, official requirement or other
regulatory measure or procedure implemented to combat “money laundering” (as defined
in Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities).

     

    
      	
              7.2  

            	
              Initial
      representations and warranties

            

    

     

    The
Borrower further represent and warrants to the Bank that:

     

    
      	
              7.2.1  

            	
              Pari
      passu

            

    

     

    the
obligations of the Borrower under this Agreement and the Master Swap Agreement
are direct, general and unconditional obligations of the Borrower and rank at
least pari passu with all other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;

     

    
      	
              7.2.2  

            	
              No
      default under other Indebtedness

            

    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    neither
the Borrower nor any of its Related Companies nor any other Security Party is
(nor would with the giving of notice or lapse of time or the satisfaction of any
other condition or combination thereof be) in breach of or in default under the
Master Swap Agreement or any agreement relating to Indebtedness to which it is a
party or by which it may be bound;

     

    
      	
              7.2.3  

            	
              Information

            

    

     

    the
information, exhibits and reports (including all financial information relating
to the Borrower and any other Security Party) furnished by any Security Party to
the Bank in connection with the negotiation and preparation of the Security
Documents are true and accurate in all material respects and not misleading, do
not omit material facts and all reasonable enquiries have been made to verify
the facts and statements contained therein; there are no other facts the
omission of which would make any fact or statement therein
misleading;

     

    
      	
              7.2.4  

            	
              No
      withholding Taxes

            

    

     

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

     

    
      	
              7.2.5  

            	
              No
      Default

            

    

     

    no
Default has occurred and is continuing;

     

    
      	
              7.2.6  

            	
              No
      Default under any Contract or any Refund
  Guarantee

            

    

     

    no
relevant Owner is in default of any of its obligations under any Contract or any
of its obligations upon the performance or observance of which depend the
continued liability of any Refund Guarantor in accordance with the terms of the
relevant Refund Guarantee;

     

    
      	
              7.2.7  

            	
              No
      Encumbrance in respect of pre-delivery
security

            

    

     

    no
relevant Owner has previously charged, encumbered or assigned the benefit of any
of its rights, title and interest in or to any Contract or any Refund Guarantee
and such benefit and all such rights, title and interest are freely assignable
and chargeable in the manner contemplated by the Security
Documents.

     

    
      	
              7.2.8  

            	
              the
      Ships

            

    

     

    each
Mortgaged Ship will on the Drawdown Date of Facility A and the Advance under the
Facility B in relation to the Initial Revolving Amount or, as the case may be,
the Advance for such Ship be:

     

    
      	
              (a)  

            	
              in
      the absolute ownership of the relevant Owner who will on and after such
      Drawdown Date be the sole, legal and beneficial owner of such
      Ship;

            

    

     

    
      	
              (b)  

            	
              registered
      through the offices of the relevant Registry as a ship under the laws and
      flag of the relevant Flag State;

            

    

     

    
      	
              (c)  

            	
              operationally
      seaworthy and in every way fit for service;
and

            

    

     

    
      	
              (d)  

            	
              classed
      with the relevant Classification free of all requirements and
      recommendations of the relevant Classification
  Society;

            

    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    
      	
              7.2.9  

            	
              Ships'
      employment

            

    

     

    other
than in respect of such charters, contracts, agreements to enter into charters
or contracts in respect of the Initial Ships details of which have been provided
to the Borrower and approved by the Bank in writing, no Ship is nor will on or
before the Drawdown Date of the Advance constituting Facility A or, as the case
may be, the Advance constituting the Initial Revolving Amount or, as the case
may be, the relevant Advance for such Ship be subject to any charter or contract
or to any agreement to enter into any charter or contract which, if entered into
after the date of the relevant Ship's Security Documents would have required the
consent of the Bank and on or before the Drawdown Date for the Advance
constituting Facility A or, as the case may be, the Advance constituting the
Initial Revolving Amount or, as the case may be, the Advance for such Ship,
there will not be any agreement or arrangement whereby the Earnings (as defined
in the relevant Ship's Security Documents) may be shared with any other
person;

     

    
      	
              7.2.10  

            	
              Freedom
      from Encumbrances

            

    

     

    none of
the Ships, nor their Earnings, Insurances or Requisition Compensation (each as
defined in the relevant Ship's Security Documents) nor any of the Operating
Accounts nor any of the Underlying Documents nor any other properties or rights
which are, or are to be, the subject of any of the Security Documents nor any
part thereof will be, on the Drawdown Date for the Advance constituting Facility
A or, as the case may be, the Advance constituting the Initial Revolving Amount
or, as the case may be, the relevant Advance for such Ship, subject to any
Encumbrance; and

     

    
      	
              7.2.11  

            	
              Environmental
      matters

            

    

     

    to the
best of the knowledge and belief of the Borrower and its respective
officers:

     

    
      	
              (a)  

            	
              all
      Environmental Laws applicable to any Fleet Vessel have been complied with
      and all consents, licences and approvals required under such Environmental
      Laws have been obtained and complied with;
and

            

    

     

    
      	
              (b)  

            	
              no
      Environmental Claim has been made or threatened or pending against any
      member of the Borrower’s Group or any Fleet Vessel and not fully
      satisfied; and

            

    

     

    
      	
              (c)  

            	
              there
      has been no Environmental Incident;

            

    

     

    
      	
              7.2.12  

            	
              No
      material adverse change

            

    

     

    there has
been no material adverse change in the financial position of the Borrower or the
consolidated financial position of the Borrower and its Related Companies from
that set forth in the financial statements referred to in
clause 7.1.9;

     

    
      	
              7.2.13  

            	
              Parent
      company

            

    

     

    each of
the Owners is the wholly owned subsidiary of the Borrower and the Borrower is
legally and beneficially owned as to fifteen per cent (15%) by the
Shareholders;

     

    
      	
              7.2.14  

            	
              Copies
      true and complete

            

    

     

    the
copies of each of the Underlying Documents delivered or to be delivered to the
Bank pursuant to clause 9 are, or will when delivered be, true and complete
copies of such documents; such documents will when delivered constitute valid
and binding obligations of the parties thereto enforceable in accordance with
their respective terms and there will have been no amendments or variations
thereof or defaults thereunder; and

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    
      	
              7.2.15  

            	
              ISM
      Code and ISPS Code

            

    

     

    any
Operator has obtained and maintains (a) a DOC, and will, on or prior to the
Drawdown Date, obtain an SMC for the Ships and (b) any certification required in
order for any Owner, any Operator and the Ships to comply with the ISPS Code and
each of such documents are, or will when issued be, in full force and effect and
nothing has happened which might cause any of such documents to be
withdrawn.

     

    
      	
              7.3  

            	
              Repetition
      of representations and warranties

            

    

     

    
      	
              7.3.1  

            	
              On
      and as of each Advance and (except in relation to the representations and
      warranties in clause 7.2) on each Interest Payment Date the Borrower
      shall (a) be deemed to repeat the representations and warranties in
      clauses 7.1 (and so that the representation and warranty in
      clause 7.1.9 shall for this purpose refer to the then latest audited
      financial statements delivered to the Bank under clause 8.1) and 7.2
      as if made with reference to the facts and circumstances existing on such
      day and (b) be deemed to further represent and warrant to the Bank that
      the then latest audited financial statements delivered to the Bank (if
      any) have been prepared in accordance with GAAP which have been
      consistently applied and present fairly and accurately the financial
      position of the Borrower and the consolidated financial position of the
      Borrower and its Related Companies as at the end of the financial period
      to which the same relate and the results of the operations of the Borrower
      and the consolidated results of the operations of the Borrower and its
      Related Companies respectively for the financial period to which the same
      relate and, as at the end of such financial period, neither the Borrower
      nor any of its Related Companies had 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.

            

    

     

    
      	
              8  

            	
              Undertakings

            

    

     

    
      	
              8.1  

            	
              General

            

    

     

    The
Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under any of the Security Documents and while all
or any part of the Commitment remains outstanding, it will:

     

    
      	
              8.1.1  

            	
              Notice
      of Default

            

    

     

    promptly
inform the Bank of any occurrence of which it becomes aware which might
adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents or the Underlying Documents to which it is a
party and, without limiting the generality of the foregoing, will inform the
Bank of any Default forthwith upon becoming aware thereof and will from time to
time, if so requested by the Bank, confirm to the Bank in writing that, save as
otherwise stated in such confirmation, no Default has occurred and is
continuing;

     

    
      	
              8.1.2  

            	
              Consents
      and licences

            

    

     

    without
prejudice to clauses 7.1 and 9, obtain or cause to be obtained, maintain in
full force and effect and comply in all material respects with the conditions
and restrictions (if any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things
which may from time to time be necessary or desirable under applicable law for
the continued due performance of all the obligations of the Security Parties
under each of the Security Documents and the Underlying Documents;

     

    
      	
              8.1.3  

            	
              Use
      of proceeds

            

    

     

    use the
Loan exclusively for the purpose specified in clause 1.1;

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              8.1.4  

            	
              Pari
      passu

            

    

     

    ensure
that its obligations under this Agreement and the Master Swap Agreement shall,
without prejudice to the security intended to be created by the Security
Documents at all times rank at least pari passu with all its other present and
future unsecured and unsubordinated Indebtedness with the exception of any
obligations which are mandatorily preferred by law and not by
contract;

     

    
      	
              8.1.5  

            	
              Financial
      statements

            

    

     

    
      	
              (a)  

            	
              prepare
      financial statements of the Borrower and consolidated financial statements
      of the Borrower and its Related Companies in accordance with GAAP and all
      requirements of the Securities and Exchange Commission of the United
      States of America consistently applied in respect of each financial year
      and cause the same to be reported on by its auditors and deliver as many
      copies of the same as the Bank may reasonably require as soon as
      practicable but not later than seventy five (75) days after the end of the
      financial period to which they relate;
and

            

    

     

    
      	
              (b)  

            	
              prepare
      unaudited financial statements of the Borrower and consolidated financial
      statements of the Borrower and its Related Companies in respect of each of
      the first three quarters of each financial year on the same basis as the
      annual statements and deliver as many copies of the same as the Bank may
      reasonably require as soon as practicable but not later than forty five
      (45) days after the end of the financial period to which they
      relate;

            

    

     

    
      	
              8.1.6  

            	
              Delivery
      of Compliance Certificate

            

    

     

    deliver
to the Bank a Compliance Certificate for the relevant period with each set of
financial statements provided pursuant to clause 8.1.5;

     

    
      	
              8.1.7  

            	
              Delivery
      of reports

            

    

     

    deliver
and procure that the other Security Parties deliver to the Bank as many copies
as the Bank may reasonably require at the time of issue thereof of every report,
circular, notice or like document issued by any of the Borrower or any other
Security Party to its shareholders or creditors generally;

     

    
      	
              8.1.8  

            	
              Provision
      of further information

            

    

     

    provide
the Bank with such financial and other management information concerning any
Borrower, its Related Companies, the other Security Parties and their respective
affairs as the Bank may from time to time require and provide within the first
ten days of each month management updates (in respect of the preceding month) in
respect of cashflows, liquidity and performance of the Borrower and its Related
Companies, information regarding changes in respect of vessels owned by the
Borrower and any of its Related Companies (including sales of vessels) and any
other information that may be requested by the Bank;

     

    
      	
              8.1.9  

            	
              Obligations
      under Security Documents

            

    

     

    duly and
punctually perform and procure that the other Security Parties duly and
punctually perform each of the obligations expressed to be assumed by them under
the Security Documents;

     

    
      	
              8.1.10  

            	
              ISM
      Code

            

    

     

    
      	
              (a)  

            	
              comply
      with and ensure that each Ship and any Operator at all times complies with
      the requirements of the ISM Code;

            

    

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              immediately
      inform the Bank if there is any actual or threatened withdrawal of an
      Owner’s or an Operator’s DOC or the SMC in respect of any Ship;
      and

            

    

     

    
      	
              (c)  

            	
              promptly
      inform the Bank upon the issue to the Borrower or any Operator of a DOC
      and to any Ship of an SMC or the receipt by any of the Borrower or any
      Operator of notification that its application for the same has been
      refused;

            

    

     

    
      	
              8.1.11  

            	
              ISPS
      Code

            

    

     

    
      	
              (a)  

            	
              comply
      with and ensure that each Ship and any Operator at all times complies with
      the requirements of the ISPS Code and with specifications of the
      International Maritime Organisation, and any other regulations, either
      existing or future, of the International Maritime Authority and the
      European Union; and

            

    

     

    
      	
              (b)  

            	
              immediately
      inform the Bank if there is any actual or threatened withdrawal of any
      certification required in order for any of them, any Operator and/or the
      Ship to comply with the ISPS Code;

            

    

     

    
      	
              8.1.12  

            	
              Documents
      and evidence

            

    

     

    provide
the Bank with such documents and evidence as the Bank shall from time to time
require, based on applicable law and regulations from time to time and the
Bank’s own internal guidelines from time to time to identify the Borrower and
the other Security Parties and any other persons involved or affected by the
transaction(s) contemplated by this Agreement;

     

    
      	
              8.1.13  

            	
              Management
      of the Borrower

            

    

     

    not
without the Bank’s written consent appoint at any time a new Chief Executive
Officer (other than Evangelos Pistiolis); 

     

    
      	
              8.1.14  

            	
              Owner’s
      Guarantee

            

    

     

    procure
that on or prior to the Drawdown Date of the Advance constituting Facility A and
each Advance relative to Facility B (including without limitation the Advance
constituting the Initial Revolving Amount) the relevant Owner(s) execute(s) and
deliver(s) to the Bank an Owner’s Guarantee; 

     

    
      	
              8.1.15  

            	
              Intra-Group
      Loan Agreements

            

    

     

    procure
that all interest payment dates and all repayment dates relating to the loans to
be made pursuant to the Intra-Group Loan Agreements match those of each relevant
Advance drawn down by the Borrower under this Agreement in order to make each of
the said loans available to the Owners and shall procure and ensure that all
sums paid and/or payable by the Owners to the credit of the Operating Accounts
shall be freely available to the Bank to meet all payments of principal and
interest and all other sums payable by the Borrower to the Bank pursuant to this
Agreement and each of the other Security Documents;

     

    
      	
              8.1.16  

            	
              Operating
      Accounts balance

            

    

     

    
      	
              (a)  

            	
              subject
      to this clause 8.1.16, on or before the Drawdown Date of the first Advance
      pay to the credit of the Operating Accounts (or other accounts charged in
      favour of the Bank in respect of the Ships) an aggregate sum of not less
      than ten million Dollars ($10,000,000);
and

            

    

     

    
      	
              (b)  

            	
              on
      and from the Drawdown Date of the first Advance and throughout the
      Security Period maintain an average balance (calculated on a monthly
      basis) of not less than ten million Dollars ($10,000,000) and in any event
      an aggregate balance of not less than five million Dollars ($5,000,000)
      standing to the credit of the Operating Accounts (or other accounts
      charged in favour of the Bank in respect of the
  Ships);

            

    

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    
      	
              8.1.17  

            	
              Classification

            

    

     

    if and
when so requested in writing by the Bank acting in its sole discretion,
irrevocably and unconditionally instruct and authorise the Classification
Societies (notwithstanding any previous instructions whatsoever which the
relevant Owner may have given to any Classification Society to the contrary) as
follows:

     

    
      	
              (a)  

            	
              to
      send to the Bank, following receipt of a written request from the Bank,
      certified true copies of all original certificates of class held by any
      Classification Society in relation to any
Ship;

            

    

     

    
      	
              (b)  

            	
              to
      allow the Bank (or its agents), at any time and from time to time, to
      inspect the classification reports of any Owner for any Ship at the
      offices of any Classification Society and to take copies of
      them;

            

    

     

    
      	
              (c)  

            	
              to
      notify the Bank immediately in writing if any Classification
      Society:

            

    

     

    
      	
              (i)  

            	
              receives
      written notification from any Owner or any other person that the relevant
      Ship’s Classification Society is to be changed;
  or

            

    

     

    
      	
              (ii)  

            	
              becomes
      aware of any facts or matters which may result in or have resulted in a
      change, suspension, discontinuance, withdrawal or expiry of the relevant
      Ship’s Classification under the rules or terms and conditions of any
      Owner’s or the relevant Ship’s membership of the Classification
      Society;

            

    

     

    
      	
              (d)  

            	
              following
      receipt by any Classification Society of a written request from the
      Bank:

            

    

     

    
      	
              (i)  

            	
              to
      confirm to the Bank that the relevant Owner is not in default of any of
      its contractual obligations or liabilities to the Classification Society
      and, without limiting the foregoing, that it has paid in full all fees or
      other charges due and payable to the Classification Society;
      or

            

    

     

    
      	
              (ii)  

            	
              if
      the relevant Owner is in default of any of its contractual obligations or
      liabilities to the Classification Society, to specify to the Bank in
      reasonable detail the facts and circumstances of such default, the
      consequences thereof, and any remedy period agreed or allowed by the
      Classification Society.

            

    

     

    The
Borrower further undertakes with the Bank that it will continue to be
responsible to the Classification Societies for the performance and discharge of
all their obligations and liabilities relating to or arising out of or in
connection with the contract it has with the Classification Societies, and that
nothing in this clause 8.1.17 should be construed as imposing any obligation or
liability on the Bank to any Classification Society in respect thereof;
and

     

    
      	
              8.1.18  

            	
              Newbuilding

            

    

     

    in the
case of an Additional Ship which is a newbuilding and in respect of which the
Borrower or the relevant Owner (as appropriate) is not utilising the facilities
made available pursuant to this Agreement to finance all instalments of the
Contract Price or the entire Contract Price, pay all instalments of the Contract
Price or any part of the Contract Price not being financed under this Agreement
in full and in a timely manner and otherwise in accordance with the terms of the
relevant Contract and will not incur any Borrowed Money to assist it to finance
any part of the Contract Price except for Borrowed Money pursuant to the
Security Documents;

     

    
      	
              8.2  

            	
              Security value maintenance

            

    

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              8.2.1  

            	
              Security
      shortfall

            

    

     

    If at any time the Security Value shall be less than the Security
Requirement, the Bank may give notice to the Borrower requiring that such
deficiency be remedied and then the Borrower shall either

     

    
      	
              (a)  

            	
              prepay
      within a period of thirty (30) days of the date of receipt by the Borrower
      of the Bank’s said notice such sum in Dollars as will result in the
      Security Requirement after such prepayment (taking into account any other
      repayment of the Loan made between the date of the notice and the date of
      such prepayment) being equal to the Security Value;
  or

            

    

     

    
      	
              (b)  

            	
              within
      thirty (30) days of the date of receipt by the Borrower of the Bank’s said
      notice constitute to the satisfaction of the Bank such further security
      for the Loan as shall be acceptable to the Bank having a value for
      security purposes (as determined by the Bank in its absolute discretion)
      at the date upon which such further security shall be constituted which,
      when added to the Security Value, shall not be less than the Security
      Requirement as at such date.

            

    

     

    Clause
4.6 shall apply to prepayments under clause 8.2.1(a).

     

    
      	
              8.2.2  

            	
              Valuation
      of Ship

            

    

     

    Each of
the Ships shall, for the purposes of this clause 8.2.2, be valued in Dollars as
and when the Bank shall require by an Approved Shipbroker and in any event at
least once a quarter immediately prior to each Margin Set Date (such valuation
to be made without, unless required by the Bank, physical inspection and on the
basis of a sale for prompt delivery for cash at arms length on normal commercial
terms as between a willing buyer and a willing seller without taking into
account the benefit of any charterparty or other engagement concerning the
relevant Ship).  Such valuations shall constitute the value of the
Ships for the purposes of this clause 8.2.2 unless the Borrower objects to any
valuation provided by an Approved Shipbroker within ten (10) days of receipt of
such valuation in which event, the value of the relevant Ship shall be the mean
of the value specified in such valuation and the value specified in a valuation
issued by another Approved Shipbrokers appointed by the Borrower.

     

    The value
of the Ships determined in accordance with the provisions of this clause 8.2.2
shall be binding upon the parties hereto until such time as any further such
valuations shall be obtained.

     

    
      	
              8.2.3  

            	
              Information

            

    

     

    The
Borrower undertakes to the Bank to supply to the Bank and to any Approved
Shipbrokers such information concerning the Ships and their condition as such
Approved Shipbrokers may reasonably require for the purpose of making any such
valuation of any of the Ships.

     

    
      	
              8.2.4  

            	
              Costs

            

    

     

    All costs
in connection with (a) the Bank obtaining one (1) valuation of each of the Ships
referred to in clause 8.2.2 in any period of twelve (12) months, (b) any
valuation issued by another Approved Shipbrokers appointed by the Borrower
pursuant to clause 8.2.2, (c) any valuation either of any additional security
for the purposes of ascertaining the Security Value at any time or necessitated
by the Borrower electing to constitute additional security pursuant to clause
8.2.1(b) and (d) any valuations obtained following the occurrence of a Default,
shall be borne by the Borrower.

     

    
      	
              8.2.5  

            	
              Valuation
      of additional security

            

    

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    For the
purpose of this clause 8.2, the market value of any additional security provided
or to be provided to the Bank shall be determined by the Bank in its absolute
discretion without any necessity for the Bank assigning any reason
thereto.

     

    
      	
              8.2.6  

            	
              Documents
      and evidence

            

    

     

    In
connection with any additional security provided in accordance with this clause
8.2, the Bank shall be entitled to receive such evidence and documents of the
kind referred to in Schedule 3 as may in the Bank’s opinion be appropriate
and such favourable legal opinions as the Bank shall in its absolute discretion
require.

     

    
      	
              8.3  

            	
              Negative
      undertakings

            

    

     

    The
Borrower undertakes with the Bank that, from the date of this Agreement and so
long as any moneys are owing under the Security Documents and while all or any
part of the Commitment remains outstanding, it will not, without the prior
written consent of the Bank, but subject to the proviso hereto:

     

    
      	
              8.3.1  

            	
              Negative
      pledge

            

    

     

    permit
any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
created or extended over all or any part of its present or future undertakings,
assets, rights or revenues to secure or prefer any present or future
Indebtedness or other liability or obligation of any of the Borrower or any
other person;

     

    
      	
              8.3.2  

            	
              No
      merger

            

    

     

    merge or
consolidate with any other person;

     

    
      	
              8.3.3  

            	
              Disposals

            

    

     

    sell,
transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part (being either alone or when aggregated with all other
disposals falling to be taken into account pursuant to this clause 8.3.3
material in the opinion of the Bank in relation to the undertakings, assets,
rights and revenues of a Borrower’s Group) of its present or future undertaking,
assets, rights or revenues (otherwise than by transfers, sales or disposals for
full consideration in the ordinary course of trading) whether by one or a series
of transactions related or not;

     

    
      	
              8.3.4  

            	
              Other
      business

            

    

     

    undertake
any business other than the ownership and operation of the Ships and the
chartering of the Ships to third parties;

     

    
      	
              8.3.5  

            	
              Acquisitions

            

    

     

    and will
procure that no other Related Company shall, acquire any further assets
(including vessels) other than the Ships and rights arising under contracts
entered into by or on behalf of the Borrower or any Owner in the ordinary course
of its businesses of owning, operating and chartering the Ships;

     

    
      	
              8.3.6  

            	
              Other
      obligations

            

    

     

    incur any
obligations except for obligations arising under the Underlying Documents or the
Security Documents or contracts entered into in the ordinary course its
businesses of owning, operating and chartering the Ships; or

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
              8.3.7  

            	
              No
      borrowing

            

    

     

    and will
procure that no other Related Company shall, incur any Borrowed Money except for
Borrowed Money pursuant to the Security Documents (and, in the case of any
Owner, Borrowed Money pursuant to the relevant Intra-Group Loan Agreement) or
incurred in the ordinary course of its businesses of owning, operating and
chartering the Ships; or

     

    
      	
              8.3.8  

            	
              Repayment
      of borrowings

            

    

     

    repay the
principal of, or pay interest on or any other sum in connection with any of its
Borrowed Money except for Borrowed Money pursuant to the Security Documents;
or

     

    
      	
              8.3.9  

            	
              Guarantees

            

    

     

    issue any
guarantees or indemnities or otherwise become directly or contingently liable
for the obligations of any person, firm, or corporation except pursuant to the
Security Documents and except for guarantees or indemnities from time to time
required in the ordinary course by any protection and indemnity or war risks
association with which a Ship is entered, guarantees required to procure the
release of such Ship from any arrest, detention, attachment or levy or
guarantees or undertakings required for the salvage of a Ship); or

     

    
      	
              8.3.10  

            	
              Loans

            

    

     

    make any
loans (other than the Loans under the Intra-Group Loan Agreements) grant any
credit (save as envisaged in clause 8.3.7 and save for normal trade credit in
the ordinary course of business) to any person or agree to do so and in the case
of the loans to be made under the Intra-Group Loan Agreements, the Borrower will
not without the prior written agreement of the Bank and except as envisaged in
clause 14.4 accept any repayments of principal or interest or other sums due or
payable thereunder or take any action against any Owner; or

     

    
      	
              8.3.11  

            	
              Sureties

            

    

     

    permit
any Indebtedness of the Borrower to any person (other than the Bank) to be
guaranteed by any person (save for guarantees or indemnities granted by any
Owner and fully subordinated in all respects to the Bank’s rights as lender
under this Agreement and the other Security Documents) or from time to time
required in the ordinary course by any protection and indemnity or war risks
association with which a Ship is entered, guarantees required to procure the
release of such Ship from any arrest, detention, attachment or levy or
guarantees or undertakings required for the salvage of a Ship); or

     

    
      	
              8.3.12  

            	
              Share
      capital and distribution

            

    

     

    purchase
or otherwise acquire for value any shares of its capital or stock or declare or
pay any dividends or distribute any of its present or future assets,
undertakings, rights or revenues to any of its shareholders and will procure
that the Owners will not acquire for value any shares of its capital or stock or
declare or pay any dividends or distribute any of its present or future assets,
undertakings rights or revenues to any of its shareholders following the
occurrence of a Default or if the same would result in a Default occurring;
or

     

    
      	
              8.3.13  

            	
              Subsidiaries
      and parent

            

    

     

    cease to
legally and beneficially own 100% of the issued shares in the capital of the
Owners whether directly or indirectly;

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    

     

    
      	
              8.3.14  

            	
              Change
      of Classification, Classification Society or Flag
  State

            

    

     

    and will
procure that the Owners do not change the Classification, the Classification
Society or the Flag State of any Ship;

     

    
      	
              8.3.15  

            	
              Managers

            

    

     

    change or
permit any change in either of the Managers of the Ships or amend or permit any
amendment of any of the Management Agreements; and

     

    
      	
              8.3.16  

            	
              Constitutional
      documents

            

    

     

    agree to
any change to its constitutional documents; and

     

    
      	
              8.3.17  

            	
              Equity

            

    

     

    and will
procure that the Owners do not permit (a) the issue of any convertible equity or
the conversion of any existing equity and (b) any further equity participation
in the Borrower and/or the Owner unless the same is legally and effectively
subordinated to all amounts due to the Bank under the Loan Agreement and the
other Security Documents.

     

    Provided
always that subject to no Default having occurred and be continuing or resulting
from any acquisition or borrowing by a Related Company which is not an Owner,
nothing in sub-clauses 8.3.5 or 8.3.7 or 8.3.8 shall prevent the Borrower in
assisting any Related Company (which is not an Owner) to acquire, or such
Related Company (which is not an Owner) in acquiring, any further tonnage over
which such Related Company shall be entitled to grant mortgages, pledges, liens
or other encumbrances as security for its obligations.  The Borrower
agrees that it shall upon the Bank’s first demand in writing execute such
further documents as they may require to create specific cross-default
provisions relating to any such acquisitions or borrowing.

     

    
      	
              8.4  

            	
              Permitted
      Ship sales

            

    

     

    The Bank
shall not unreasonably withhold its consent under any provision of the Security
Documents to the sale of a Mortgaged Ship if the Owner delivers to the Bank
evidence satisfactory to the Bank that such sale is or will be for the full
value of the Ship for payment in cash at arm's length and upon normal commercial
terms to a purchaser which is not associated with any Owner or the Borrower
provided that no Default has occurred or will, on completion of such sale, have
occurred and the Bank is satisfied that on or immediately after the delivery of
such Ship to the relevant purchaser, the proceeds of sale of such Ship (after
deducting customary brokers' commissions and any expenses related to such sale)
will be of an amount not less than that required by the Bank to be prepaid upon
completion of such sale pursuant to clause 4.5 together with all sums payable by
the Borrower to the Bank under clause 4.6.

     

    
      	
              8.5  

            	
              Financial covenants

            

    

     

    
      	
              8.5.1  

            	
              The
      Borrower undertakes that at all times during the Security Period the
      financial condition of the Borrower, which shall be evidenced by the
      Accounting Information provided to the Bank shall be such
      that:

            

    

     

    
      	
              (a)  

            	
              the
      Borrower’s Adjusted Net Worth shall never be less than two hundred and
      fifty million Dollars ($250,000,000) and will at all times exceed thirty
      five per cent (35%) of Total Assets;
and

            

    

     

    
      	
              (b)  

            	
              EBITDA
      of the Borrower will at all times exceed one hundred and twenty per cent
      (120%) of the aggregate amount of Fixed
Charges;

            

    

     

    
      	
              (c)  

            	
              the
      Liquid Funds of the Borrower shall not at any time be less than the higher
      of:

            

    

     

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	
              (i)  

            	
              ten
      million Dollars ($10,000,000); or

            

    

     

    
      	
              (ii)  

            	
              five
      hundred thousand Dollars ($500,000) per Group
  Vessel.

            

    

     

    The
Borrower further confirms and undertakes that if the terms relating to any
future Borrowed Money (whether of the Borrower or any Related Company) including
financial covenants are different to those detailed in this clause 8.5 the
Borrower shall upon the Bank’s first demand in writing execute such documents as
the Bank may require to enable the Bank to benefit from such enhanced and/or
stronger financial covenants.

     

    
      	
              8.5.2  

            	
              For
      the purposes of this clause 8.5:

            

    

     

    “Accounting Information” means
the quarterly financial statements and/or the annual audited financial
statements to be provided by the Borrower to the Bank in accordance with clause
8.1.5 of this Agreement;

     

    “Accounting Period” means each
consecutive period of approximately three months falling during the Security
Period (ending on the last day in March, June, September and December of each
year) for which Accounting Information is required to be delivered pursuant to
clause 8.1.5 of this Agreement;

     

    “Adjusted Net Worth” means, in
respect of an Accounting Period, the amount of Total Assets less Consolidated
Debt;

     

    “Consolidated Debt” means, in
respect of an Accounting Period, the aggregate amount of Debt due by the members
of the Group (other than any such Debt owing by any member of the Group to
another member of the Group) as stated in the then most recent Accounting
Information;

     

    “Consolidated Financial
Indebtedness” means, in respect of each Accounting Period, the aggregate
amount of Financial Indebtedness (including current maturities) due by the
members of the Group (other than any such Financial Indebtedness owing by any
member of the Group to another member of the Group) as stated in the then most
recent Accounting Information;

     

    “Current Assets” means, in
respect of each Accounting Period, the aggregate of the cash and marketable
securities, trade and other receivables from persons other than a member of the
Group realisable within one year, inventories and prepaid expenses which are to
be charged to income within one year less any doubtful debts and any discounts
or allowances given as stated in the then most recent Accounting
Information;

     

    “Debt” means in relation to any
member of the Group (the “debtor”);

     

    
      	
              (a)  

            	
              Financial
      Indebtedness of the debtor;

            

    

     

    
      	
              (b)  

            	
              liability
      for any credit to the debtor from a supplier of goods or services or under
      any instalment purchase or payment plan or other similar
      arrangement;

            

    

     

    
      	
              (c)  

            	
              contingent
      liabilities of the debtor (including without limitation any taxes or other
      payments under dispute) which have been or, under GAAP, should be recorded
      in the notes to the Accounting
Information;

            

    

     

    
      	
              (d)  

            	
              deferred
      tax of the debtor; and

            

    

     

    
      	
              (e)  

            	
              liability
      under a guarantee, indemnity or similar obligation entered into by the
      debtor in respect of a liability of another person who is not a member of
      the Group which would fall within (a) to (d) if the references to the
      debtor referred to the other
person;

            

    

     

    “EBITDA” means, in respect of
each immediately preceding period of twelve (12) months (calculated from the
date of the then most recent Accounting Information), the aggregate amount of
consolidated pre-tax profits of the Group before extraordinary or exceptional
items, depreciation, interest, rentals under finance leases and similar charges
payable as stated in the then most recent Accounting Information;

     

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    “Financial Indebtedness” means,
in relation to any member of the Group (the “debtor”), a liability of the
debtor:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              under
      a financial lease, a deferred purchase consideration arrangement (in each
      case, other than in respect of assets or services obtained on normal
      commercial terms in the ordinary
      course of business) or any other agreement having the commercial effect of
      a borrowing or raising of money by the
  debtor;

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    “Fixed Charges” means, in
respect of each immediately preceding period of twelve (12) months (calculated
from the date of the then most recent Accounting Information), the aggregate of
Interest Expenses and the portion of Consolidated Financial Indebtedness (other
than balloon repayments) falling due during that period, as stated in the then
most recent Accounting Information;

     

    “Group” means the Borrower and
its subsidiaries (whether direct or indirect and including, but not limited to,
the Owners) from time to time during the Security Period and “member of the Group” shall be
construed accordingly;

     

    “Group Vessels” means any
vessel (including, but not limited to, the Ships) from time to time owned by any
member of the Group (each a “Group Vessel”);

     

    “Interest Expenses” means, in
respect of an Accounting Period, the aggregate on a consolidated basis of all
interest incurred by any member of the Group (excluding any amounts owing by one
member of the Group to another member of the Group) and any net amounts payable
under interest rate hedge agreements;

     

    “Liquid Funds” means, in
respect of an Accounting Period:

     

    
      	
              (a)  

            	
              cash
      in hand or held with banks or other financial institutions of the Borrower
      and/or any other member of the Group in Dollars or another currency freely
      convertible into Dollars, which is free of any Encumbrance (other than a
      Permitted Encumbrance and other than ordinary bankers’ liens which have
      not been enforced or become capable of being
  enforced);

            

    

     

    
      	
              (b)  

            	
              any
      other short-term financial investments which is free of any Security
      Interest (other than a Permitted Security
  Interest),

            

    

     

    as stated
in the then most recent Accounting Information;

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    

     

    “Tangible Fixed Assets” means,
in respect of an Accounting Period, the value (less depreciation computed in
accordance with GAAP) on a consolidated basis of all tangible fixed assets of
the Group as stated in the then most recent Accounting Information;
and

     

    “Total Assets” means, in
respect of an Accounting Period, the aggregate of Current Assets and Tangible
Fixed Assets.

     

    All
expressions used in the definitions of this clause 8.5 which are not otherwise
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States of America.

     

    
      	
              8.6  

            	
              Pre-delivery
      positive undertakings

            

    

     

    In
relation to each Additional Ship which is a newbuilding, the Borrower undertakes
and agrees with the Bank that it will or will procure that the relevant Owner
will:

     

    
      	
              8.6.1  

            	
              Document
      of title to an Additional Ship

            

    

     

    give
irrevocable instructions to the relevant Builder to hold such Additional Ship
and the builder’s certificate and any other document of title to such Additional
Ship to the order and at the disposal of the Bank and ensure that the relevant
Builder complies with such instructions;

     

    
      	
              8.6.2  

            	
              Performance
      of the Contract

            

    

     

    duly and
punctually observe and perform all the conditions and obligations imposed on it
by the relevant Contract;

     

    
      	
              8.6.3  

            	
              Performance
      by Builder

            

    

     

    use its
best endeavours to ensure that the Builder of such Additional Ship observes and
performs all conditions and obligations imposed on it by the relevant Contract
and take all steps within its power to ensure that the Builder proceeds with the
construction of such Additional Ship with due diligence and
despatch;

     

    
      	
              8.6.4  

            	
              Progress
      of construction

            

    

     

    upon the
request of the Bank, advise the Bank of the progress of construction of such
Additional Ship and supply the Bank with such other information as it may
require regarding such Additional Ship, and the materials allocated to such
Additional Ship, the relevant Contract, or otherwise relating to the
construction of such Additional Ship;

     

    
      	
              8.6.5  

            	
              Arbitration
      under the Contract

            

    

     

    in the
event that the Builder of such Additional Ship and/or the relevant Owner resort
to arbitration as provided in the relevant Contract, immediately notify the Bank
in writing that such arbitration has been initiated, advise the Bank in writing
of the identity of the appointed arbitrators and upon termination of the
arbitration notify the Bank in writing to that effect and supply the Bank with a
copy of the arbitration award and a certified English translation
thereof;

     

    
      	
              8.6.6  

            	
              Conveyance
      on default

            

    

     

    where
such Additional Ship is (or is to be) sold in exercise of any power contained in
the relevant Pre-delivery Security Assignment or otherwise conferred on the
Bank, to execute, forthwith upon request by the Bank, such form of conveyance of
such Additional Ship as the Bank may require;

     

    
      	
              8.6.7  

            	
              Enforcement
      of Owner’s rights

            

    

     

    do or
permit to be done each and every act or thing which the Bank may from time to
time require to be done for the purpose of enforcing the relevant Owner’s rights
under or pursuant to the relevant Contract and allow the name of the relevant
Owner to be used as and when required by the Bank for that purpose;

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    

     

    
      	
              8.6.8  

            	
              Notification
      of rejection of an Additional Ship

            

    

     

    notify
the Bank immediately if the relevant Builder or (with the prior written consent
of the Bank given pursuant to clause 8.5) the relevant Owner cancels,
rescinds, repudiates or otherwise terminates the relevant Contract or purports
to do so or (with the prior written consent of the Bank given pursuant to
clause 8.5) the relevant Owner rejects such Additional Ship or purports to
do so or if such Additional Ship shall become a Total Loss or partial loss or
shall be damaged;

     

    
      	
              8.6.9  

            	
              Ship’s
      name and registration

            

    

     

    register
such Additional Ship provisionally or permanently under the laws and flag of the
relevant Flag State immediately upon Delivery, procure that (if such Additional
Ship is so registered provisionally on the Delivery Date) such Additional Ship
is permanently registered under the laws and flag of the relevant Flag State no
later than one hundred and eighty (180) days after the Delivery Date and keep
such Additional Ship registered at all times from the Delivery Date under the
laws and flag of the relevant Flag State; and

     

    
      	
              8.6.10  

            	
              Mortgage

            

    

     

    execute,
and procure the registration of, the Mortgage relative to such Additional Ship
under the laws and flag of the relevant Flag State immediately upon
Delivery.

     

    
      	
              8.7  

            	
              Pre-delivery
      negative undertakings

            

    

     

    In
relation to each Additional Ship which is a newbuilding, the Borrower hereby
further undertakes and agrees with the Bank that it will not, and will procure
that the relevant Owner will not without the prior written consent of the Bank
(and then only subject to such conditions as the Bank may impose):

     

    
      	
              8.7.1  

            	
              Sale
      or other disposal

            

    

     

    sell or
agree to sell, transfer, abandon or otherwise dispose of such Additional Ship or
any share or interest therein;

     

    
      	
              8.7.2  

            	
              Creation
      of Encumbrances

            

    

     

    create or
agree to create or permit to subsist any Encumbrance over such Additional Ship
(or any share or interest therein) other than the Encumbrances created or to be
created pursuant to the Security Documents;

     

    
      	
              8.7.3  

            	
              Variation
      of Contract

            

    

     

    agree to
any variation of the relevant Contract or any substantial variation of the
specification of such Additional Ship (and for the purpose of this
paragraph any extras, additions or alterations which the relevant Owner may
desire to effect in the building of such Additional Ship shall be deemed to
constitute a substantial variation if the cost thereof (which shall in every
case be agreed in writing between the relevant Owner and the relevant Builder
before the work is put in hand irrespective of whether the prior consent thereto
of the Bank be required hereunder) or if the aggregate cost of the proposed work
together with the cost of any work already ordered will alter the fixed price of
any of such Additional Ship by an amount greater than five per cent (5%) of the
said fixed price);

     

    
      	
              8.7.4  

            	
              Releases
      and waivers of Contract

            

    

     

    release
the relevant Builder from any of its obligations under the relevant Contract or
waive any breach of the relevant Builder’s obligations thereunder or consent to
any such act or omission of the relevant Builder as would otherwise constitute
such breach;

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    

     

    
      	
              8.7.5  

            	
              Delays

            

    

     

    without
prejudice to clause 8.7.3, agree to any variation of the relevant Contract or
the specification of such Additional Ship which would delay the time for
delivery of such Additional Ship;

     

    
      	
              8.7.6  

            	
              Rejection
      and cancellation

            

    

     

    either
exercise or fail to exercise any right which the relevant Owner may have to
reject such Additional Ship or cancel or rescind or otherwise terminate the
relevant Contract provided always that any such rejection of such Additional
Ship or cancellation, rescission or other termination of the relevant Contract
by the relevant Owner after such consent is given shall be without
responsibility on the part of the Bank who shall be under no liability
whatsoever to the extent that such rejection, rescission, cancellation or
termination is thereafter adjudged to constitute a repudiation or other breach
of such Contract by the relevant Owner; 

     

    
      	
              8.7.7  

            	
              Assignment
      of Earnings

            

    

     

    assign or
agree to assign otherwise than to the Bank the Earnings of such Additional Ship
or any part thereof; 

     

    
      	
              8.7.8  

            	
              Variation
      of a Refund Guarantee

            

    

     

    agree to
any variation of the relevant Refund Guarantee;

     

    
      	
              8.7.9  

            	
              Release
      and waiver of the Refund Guarantee

            

    

     

    release
the relevant Refund Guarantor from any of its obligations under the relevant
Refund Guarantee or waive any breach of the relevant Refund Guarantor’s
obligations thereunder or consent to any such act or omission of such Refund
Guarantor as would otherwise constitute such breach;

     

    
      	
              8.7.10  

            	
              Chartering

            

    

     

    let or
agree to let such Additional Ship:

     

    
      	
              (a)  

            	
              on
      demise charter for any period; or

            

    

     

    
      	
              (b)  

            	
              by
      any time or consecutive voyage charter for a term which exceeds or which
      by virtue of any optional extensions therein contained may exceed twelve
      (12) months’ duration; or

            

    

     

    
      	
              (c)  

            	
              on
      terms whereby more than two months’ hire (or the equivalent) is payable in
      advance; or

            

    

     

    
      	
              (d)  

            	
              below
      the market rate prevailing at the time when such Additional Ship is fixed
      or other than on arms length terms;

            

    

     

    
      	
              8.7.11  

            	
              Manager

            

    

     

    to
appoint a manager of such Additional Ship (other than the Manager) or to
terminate or amend the terms of any Management Agreement.

     

    
      	
              9  

            	
              Conditions

            

    

     

    
      	
              9.1  

            	
              Commitment

            

    

     

    The
obligation of the Bank to make the Commitment available shall be subject to the
condition that the Bank, or its duly authorised representative, shall have
received the documents and evidence set out in Part 1 of
Schedule 3.

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    

     

    
      	
              9.2  

            	
              First
      Advance

            

    

     

    The
obligation of the Bank to make the first Advance available shall be subject to
the condition that the Bank or its duly authorised representative shall have
received not later than two (2) Banking Days before the day on which the
Drawdown Notice for the first Advance is given, the documents and evidence
specified in Part 2 of Schedule 3 in form and substance satisfactory to the
Bank.

     

    
      	
              9.3  

            	
              All
      Advances

            

    

     

    The
obligation of the Bank to make each Advance shall be subject to the further
condition that the Bank, or its duly authorised representative, shall have
received on or prior to the relevant Drawdown Date of such Advance, the
documents and evidence specified in Part 3 of Schedule 3 in form and
substance satisfactory to the Bank.

     

    
      	
              9.4  

            	
              Contract
      Instalment Advances of Facility B

            

    

     

    The
obligation of the Bank to make any Advance which is a Contract Instalment
Advance of Facility B shall be subject to the condition that the Bank, or its
duly authorised representative, shall have received, on or prior to the day on
which that Advance is intended to be made, the documents and evidence specified
in Part 4 of Schedule 3 in form and substance satisfactory to the
Banks.

     

    
      	
              9.5  

            	
              Expected
      Project Costs

            

    

     

    The
obligation of the Bank to make any Advance of Facility B for an Additional Ship
which is a newbuilding constituting in part Expected Project Costs shall be
subject to the further condition that the Bank, or its duly authorised
representative, shall have received invoices or pro-forma invoices itemised in a
written inventory which properly and accurately represents the Expected Project
Costs to the satisfaction of the Bank in its reasonable discretion.

     

    
      	
              9.6  

            	
              General
      conditions precedent

            

    

     

    The
obligation of the Bank to make any Advance thereof shall be subject to the
further conditions that, at the time of the giving of the Drawdown Notice for
such Advance thereof, and at the time of the making of such Advance
thereof:

     

    
      	
              9.6.1  

            	
              the
      representations and warranties contained in (i) clauses 7.1 (and so
      that the representation and warranty in clause 7.1.9 shall for this
      purpose refer to the then latest audited financial statements delivered to
      the Bank under clause 8.1.5), 7.2 and 7.3 and (ii) clauses 4.1 and
      4.2 of the Owner’s Guarantees (and so that the representation and warranty
      in clause 4.1.6 of Owner’s Guarantees shall for this purpose refer to
      the then latest audited financial statements delivered to the Bank under
      clause 5.1 of the Owner’s Guarantees) are
      true and correct on and as of each such time as if each was made with
      respect to the facts and circumstances existing at such time;
      and

            

    

     

    
      	
              9.6.2  

            	
              no
      Default shall have occurred and be continuing or would result from the
      making of the relevant Advance
thereof.

            

    

     

    
      	
              9.7  

            	
              Waiver
      of conditions precedent

            

    

     

    The
conditions specified in this clause 9 are inserted solely for the benefit
of the Bank and may be waived by the Bank in whole or in part and with or
without conditions.

     

    
      	
              9.8  

            	
              Further
      conditions precedent

            

    

     

    Not later
than five (5) Banking Days prior to each Drawdown Date and not later than five
(5) Banking Days prior to each Interest Payment Date, the Bank may request and
the Borrower shall, not later than two (2) Banking Days prior to such date,
deliver to the Bank on such request further favourable certificates and/or
opinions as to any or all of the matters which are the subject of
clauses 7, 8, 9 and 10 of this Agreement and clauses 4 and 5 of the
each Owner’s Guarantee.

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
              10  

            	
              Events
      of Default

            

    

     

    
      	
              10.1  

            	
              Events

            

    

     

    There
shall be an Event of Default if:

     

    
      	
              10.1.1  

            	
              Non-payment: any
      Security Party fails to pay any sum payable by it under any of the
      Security Documents or the Underlying Documents at the time, in the
      currency and in the manner stipulated in the Security Documents or the
      Underlying Documents (and so that, for this purpose, sums payable on
      demand shall be treated as having been paid at the stipulated time if paid
      within three (3) Banking Days of demand);
or

            

    

     

    
      	
              10.1.2  

            	
              Master Swap Agreement:
      (a) an Event of Default or Potential Event of Default (in each case as
      defined in the Master Swap Agreement) has occurred and is continued under
      the Master Swap Agreement or (b) an Early Termination Date (as defined in
      the Master Swap Agreement) has occurred or been or become capable of being
      effectively designated under the Master Swap Agreement or (c) a person
      entitled to do so gives notice of an Early Termination Date under
      Section 6(b)(iv) of the Master Swap Agreement or (d) the Master Swap
      Agreement is terminated, cancelled, suspended, rescinded or revoked or
      otherwise ceases to remain in full force and effect for any reason;
      or

            

    

     

    
      	
              10.1.3  

            	
              Breach of Insurance and certain
      other obligations:  the Borrower fails to obtain and/or
      maintain the Insurances (as defined in, and in accordance with the
      requirements of, the Ship Security Documents) for any of the Mortgaged
      Ships or if any insurer in respect of such Insurances cancels the
      Insurances or disclaims liability by reason, in either case, of
      mis-statement in any proposal for the Insurances or for any other failure
      or default on the part of the Borrower or any other person or the Borrower
      or any Owner commits any breach of or omits to observe any of the
      obligations or undertakings expressed to be assumed by it under
      clauses 8.1 or 8.2 or 8.6 or 8.7;
or

            

    

     

    
      	
              10.1.4  

            	
              Breach of other
      obligations: any Security Party commits any breach of or omits to
      observe any of its obligations or undertakings including without
      limitation, any Financial Covenants expressed to be assumed by it under
      any of the Underlying Documents or the Security Documents (other than
      those referred to in clauses 10.1.1 and 10.1.2 above) and, in respect
      of any such breach or omission which in the opinion of the Bank is capable
      of remedy, such action as the Bank may require shall not have been taken
      within fourteen (14) days (or any such period as the Bank may agree in
      writing) of the Bank notifying the relevant Security Party of such default
      and of such required action; or

            

    

     

    
      	
              10.1.5  

            	
              Misrepresentation: any
      representation or warranty made or deemed to be made or repeated by or in
      respect of any Security Party in or pursuant to any of the Security
      Documents or any of the Underlying Documents or in any notice, certificate
      or statement referred to in or delivered under any of the Security
      Documents or any of the Underlying Documents is or proves to have been
      incorrect or misleading in any material respect;
  or

            

    

     

    
      	
              10.1.6  

            	
              Cross-default: any
      Indebtedness of any Security Party is not paid when due or any
      Indebtedness of any Security Party becomes (whether by declaration or
      automatically in accordance with the relevant agreement or instrument
      constituting the same) 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 any Security Party becomes entitled to declare any such
      Indebtedness due and payable or any facility or commitment available to
      any Security Party relating to Indebtedness is withdrawn, suspended or
      cancelled by reason of any default (however described) of the person
      concerned unless the relevant Security Party shall have satisfied the Bank
      that such withdrawal, suspension or cancellation will not affect or
      prejudice in any way the relevant Security Party's ability to pay its
      debts as they fall due and fund its commitments, or any guarantee given by
      any Security Party in respect of Indebtedness is not honoured when due and
      called upon; or

            

    

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    

     

    
      	
              10.1.7  

            	
              Legal process: any
      judgment or order made against any Security Party is not stayed or
      complied with within seven (7) days (or any such period as the Bank may
      agree in writing) or a creditor attaches or takes possession of, or a
      distress, execution, sequestration or other process is levied or enforced
      upon or sued out against, any of the undertakings, assets, rights or
      revenues of any Security Party and is not discharged within seven (7) days
      (or any such period as the Bank may agree in writing);
  or

            

    

     

    
      	
              10.1.8  

            	
              Insolvency: any Security
      Party is unable or admits inability to pay its debts as they fall due;
      suspends making payments on any of its debts or announces an intention to
      do so;  or

            

    

     

    
      	
              10.1.9  

            	
              Reduction or loss of
      capital: 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 or shares, as the case may be;
or

            

    

     

    
      	
              10.1.10  

            	
              Winding up: any
      corporate action, legal proceedings or other procedure or step is taken
      for the purpose of winding-up any Security Party or an order is made or
      resolution passed for the winding up of any Security Party or a notice is
      issued convening a meeting for the purpose of passing any such resolution;
      or

            

    

     

    
      	
              10.1.11  

            	
              Administration: any
      petition is presented, notice given or other step is taken for the purpose
      of the appointment of an administrator of any Security Party or the Bank
      believes that any such petition or other step is imminent or an
      administration order is made in relation to any Security Party;
      or

            

    

     

    
      	
              10.1.12  

            	
              Appointment of receivers and
      managers: any administrative or other receiver is appointed of any
      Security Party or any part of its assets and/or undertaking or any other
      steps are taken to enforce any Encumbrance over all or any part of the
      assets of any Security Party; or

            

    

     

    
      	
              10.1.13  

            	
              Compositions: any
      corporate action, legal proceedings or other procedures or steps are
      taken, or negotiations commenced, by any Security Party or by any of its
      creditors with a view to the general readjustment or rescheduling of all
      or part of its indebtedness or to proposing any kind of composition,
      compromise or arrangement involving such company and any of its creditors;
      or

            

    

     

    
      	
              10.1.14  

            	
              Analogous proceedings:
      there occurs, in relation to any Security Party, in any country or
      territory in which any of them carries on business or to the jurisdiction
      of whose courts any part of their assets is subject, any event which, in
      the reasonable opinion of the Bank, appears in that country or territory
      to correspond with, or have an effect equivalent or similar to, any of
      those mentioned in clauses 10.1.7 to 10.1.13 (inclusive) or any
      Security Party otherwise becomes subject, in any such country or
      territory, to the operation of any law relating to insolvency, bankruptcy
      or liquidation; or

            

    

     

    
      	
              10.1.15  

            	
              Cessation of business:
      any Security Party suspends or ceases or threatens to suspend or cease to
      carry on its business; or

            

    

     

    
      	
              10.1.16  

            	
              Seizure: all or a
      material part of the undertaking, assets, rights or revenues of, or shares
      or other ownership interests in, any Security Party are seized,
      nationalised, expropriated or compulsorily acquired by or under the
      authority of any government; or

            

    

     

    
      	
              10.1.17  

            	
              Invalidity: any of the
      Security Documents or any of the Underlying 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 or any of the Underlying Documents shall at
      any time and for any reason be contested by any Security Party which is a
      party thereto, or if any such Security Party shall deny that it has any,
      or any further, liability thereunder;
or

            

    

     

    
      	
              10.1.18  

            	
              Unlawfulness: it becomes
      impossible or unlawful at any time for any Security Party, to fulfil any
      of the covenants and obligations expressed to be assumed by it in any of
      the Security Documents or any of the Underlying Documents or for the Bank
      to exercise the rights or any of them vested in it under any of the
      Security Documents or otherwise; or

            

    

     

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    
      	
              10.1.19  

            	
              Repudiation: any
      Security Party repudiates any of the Security Documents or any of the
      Underlying Documents or does or causes or permits to be done any act or
      thing evidencing an intention to repudiate any of the Security Documents
      or any of the Underlying Documents;
or

            

    

     

    
      	
              10.1.20  

            	
              Encumbrances
      enforceable: any Encumbrance (other than Permitted Liens) in
      respect of any of the property (or part thereof) which is the subject of
      any of the Security Documents becomes enforceable;
  or

            

    

     

    
      	
              10.1.21  

            	
              Material adverse change:
      there occurs, in the opinion of the Bank, a material adverse change in the
      financial condition of any Security Party by reference to the financial
      statements referred to in clause 7.1.9 and clause 4.1.6 of
      the Owner’s Guarantee; or

            

    

     

    
      	
              10.1.22  

            	
              Arrest: any Ship is
      arrested, confiscated, seized, taken in execution, impounded, forfeited,
      detained in exercise or purported exercise of any possessory lien or other
      claim or otherwise taken from the possession of the Borrower or relevant
      Owner and the Borrower or relevant Owner shall fail to procure the release
      of such Ship within a period of seven (7) days (or such other period as
      the Bank may agree in writing) thereafter;
or

            

    

     

    
      	
              10.1.23  

            	
              Registration: the
      registration of any Ship under the laws and flag of the relevant Flag
      State is cancelled or terminated without the prior written consent of the
      Bank or, if any Ship is only provisionally registered on the Delivery Date
      for such Ship, such Ship is not permanently registered under the laws and
      flag of the relevant Flag State within ninety (90) days after the Drawdown
      Date of the Advance constituting Facility A or, as the case may be, the
      Advance constituting the Initial Revolving Amount or, as the case may be,
      the Advance for such Ship or if such registration of any Ship is not
      renewed at least forty five (45) days (or such other period as the Bank
      may agree in writing) prior to the expiry of such registration;
      or

            

    

     

    
      	
              10.1.24  

            	
              Unrest: the Flag State
      of any Ship becomes involved in hostilities or civil war or there is a
      seizure of power in such Flag State by unconstitutional means 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; or

            

    

     

    
      	
              10.1.25  

            	
              Environmental Incidents:
      there is an Environmental Incident which gives rise, or may give rise, to
      Environmental Claims which could, in the opinion of the Bank be expected
      to have a material adverse effect (i) on the business, assets, operations,
      property or financial condition of any Security Party or the Borrower’s
      Group taken as a whole or (ii) on the security constituted by any of the
      Security Documents or the enforceability of that security in accordance
      with its terms; or

            

    

     

    
      	
              10.1.26  

            	
              P&I: the Borrower or
      any Owner or any other person fails or omits to comply with any
      requirements of the protection and indemnity association or other insurer
      with which a Ship is entered for insurance or insured against protection
      and indemnity risks (including oil pollution risks) to the effect that any
      cover (including, without limitation, any cover in respect of liability
      for Environmental Claims arising in jurisdictions where such Ship operates
      or trades) is or may be liable to cancellation, qualification or exclusion
      at any time; or

            

    

     

    
      	
              10.1.27  

            	
              Parent company: any
      Owner ceases to be a wholly-owned subsidiary of the Borrower;
      or

            

    

     

    
      	
              10.1.28  

            	
              Breach of Contract:
      there is a material breach by the Borrower or any Owner, a Seller or a
      Builder of any Contract or the Borrower fails to repay any Advance of
      Facility B constituting (in part) Expected Project Costs representing a
      10% deposit under a Contract relating to a purchase of an Additional Ship
      which is a second hand vessel within 7 days of the date of expiry or
      termination of the relevant Contract;
or

            

    

     

    
      	
              10.1.29  

            	
              Termination or variation of a
      Contract: a Contract is terminated for any reason whatsoever or a
      Contract is frustrated or varied in any manner not permitted by or
      pursuant to the relevant Pre-delivery Security Assignment or this
      Agreement; or

            

    

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      	
              10.1.30  

            	
              Termination of a Refund
      Guarantee: a Refund Guarantee is repudiated, cancelled, rescinded
      or otherwise terminated; or

            

    

     

    
      	
              10.1.31  

            	
              Non-Delivery of
      Ship:

            

    

     

    a Ship is
not delivered to and accepted by the Borrower or the relevant Owner under a
Contract either:

     

    
      	
              (a)  

            	
              on
      or before the Termination Date (or such later date as the Bank in its
      absolute discretion may agree in writing);
  and/or

            

    

     

    
      	
              (b)  

            	
              on
      the date that it is obliged to take Delivery of the relevant Ship in
      accordance with any relevant Contract and its failure to take such
      Delivery will constitute a breach of the provisions of the relevant
      Contract; or

            

    

     

    
      	
              10.1.32  

            	
              Material events: any
      other event occurs or circumstance arises which, in the opinion of the
      Bank, is likely materially and adversely to affect either (i) the ability
      of any Security Party to perform all or any of its obligations under or
      otherwise to comply with the terms of any of the Security Documents or
      (ii) the security created by any of the Security Documents;
    or

            

    

     

    
      	
              10.1.33  

            	
              ISM Code: the Borrower
      or any Owner  or any Operator fails to comply with the
      requirements of the ISM Code and/or obtain and/or maintain a DOC for
      itself and an SMC in respect of each of the Ships in accordance with the
      ISM Code; or

            

    

     

    
      	
              10.1.34  

            	
              ISPS Code: the Borrower
      or any Owner or any Operator fails to comply with the requirements of the
      ISPS Code and/or obtain and/or maintain the certifications required in
      respect of each of the Ships in accordance with the ISPS
      Code;  or

            

    

     

    
      	
              10.1.35  

            	
              Managers: any Manager
      takes any action or institutes any proceedings or makes or asserts any
      claim against any Ship in exercise or purported exercise of any claim;
      or

            

    

     

    
      	
              10.1.36  

            	
              Management of
      Borrower:  Evangelos Pistiolis ceases to be the Chief
      Executive Officer of the Borrower without the Bank’s prior written
      consent; or

            

    

     

    
      	
              10.1.37  

            	
              Failure to Drawdown Delivery
      Date Advance: the Borrower fails to drawdown a Delivery Date
      Advance without the prior written consent of the Bank which shall not be
      unreasonably withheld; or

            

    

     

    
      	
              10.1.38  

            	
              Intra-Group Loans
      Agreements: the Borrower demands or accepts any repayments of
      principal or interest or any other sum payable under the Intra-Group Loan
      Agreements save as envisaged by clause 14.4 or takes any action against
      any Owner without the prior written consent of the Bank;
  or

            

    

     

    
      	
              10.1.39  

            	
              Newbuilding: the
      Borrower or the relevant Owner as the case may be fails to pay all
      instalments of the Contract Price or any part of the Contract Price not
      being financed under this Agreement in full and in a timely manner and
      otherwise in accordance with the terms of the relevant Contract for an
      Additional Ship which is a newbuilding or the Bank determines in its
      reasonable opinion that the Borrower or the relevant Owner will not be in
      a position to pay all such instalments of the Contract Price or any part
      of the Contract Price not being financed under this Agreement as
      aforesaid; or

            

    

     

    
      	
              10.1.40  

            	
              Failure to create a
      Mortgage: The Borrower or the relevant Owner fails to execute and
      register at the Registry a valid and effective Mortgage over any
      Additional Ship which is a newbuilding immediately following Delivery of
      such Additional Ship pursuant to the relevant Contract or the Bank
      determines in its reasonable opinion that the Borrower or the relevant
      Owner will not (or is unlikely to) be able and/or willing to execute and
      register at the Registry such Mortgage immediately upon Delivery of such
      Additional Ship.

            

    

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    

     

    
      	
              10.2  

            	
              Acceleration

            

    

     

    The Bank
may, without prejudice to any other rights of the Bank, at any time after the
happening of an Event of Default by notice to the Borrower declare
that:

     

    
      	
              10.2.1  

            	
              the
      obligation of the Bank to make the Commitment available shall be
      terminated, whereupon the Commitment shall be reduced to zero forthwith;
      and/or

            

    

     

    
      	
              10.2.2  

            	
              the
      Loan and all interest and commitment commission accrued and all other sums
      payable under the Security Documents have become due and payable,
      whereupon the same shall, immediately or in accordance with the terms of
      such notice, become due and
payable.

            

    

     

    
      	
              10.3  

            	
              Demand
      basis

            

    

     

    If,
pursuant to clause 10.2.2, the Bank declares the Loan to be due and payable
on demand, the Bank may by written notice to the Borrower (a) call for repayment
of the Loan on such date as may be specified whereupon the Loan shall become due
and payable on the date so specified together with all interest and commitment
commission accrued and all other sums payable under this Agreement or (b)
withdraw such declaration with effect from the date specified in such
notice.

     

    
      	
              11  

            	
              Indemnities

            

    

     

    
      	
              11.1  

            	
              Miscellaneous
      indemnities

            

    

     

    The
Borrower shall on demand indemnify the Bank, without prejudice to any of the
Bank's other rights under any of the Security Documents, against any loss
(including loss of Margin) or expense which the Bank shall certify (which
certification shall not stand in the case of manifest error) as sustained or
incurred by it as a consequence of:

     

    
      	
              11.1.1  

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

            

    

     

    
      	
              11.1.2  

            	
              the
      occurrence of any other Event of
Default;

            

    

     

    
      	
              11.1.3  

            	
              any
      prepayment of the Loan or part thereof being made under clause 4.4,
      4.5 or 12.1, or any other 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; or

            

    

     

    
      	
              11.1.4  

            	
              any
      Advance not being made for any reason (excluding any default by the Bank)
      after the relevant Drawdown Notice for such Advance has been
      given,

            

    

     

    including,
in any such case, but not limited to, any loss or expense sustained or incurred
in maintaining or funding the Loan or any part thereof or in liquidating or
re-employing deposits from third parties acquired to effect or maintain the Loan
or any part thereof.

     

    
      	
              11.2  

            	
              Currency
      indemnity

            

    

     

    If any
sum due from the Borrower under any of the Security Documents or any order or
judgment given or made in relation thereto has to be converted from the currency
(the “first currency”)
in which the same is payable under the relevant Security Document or under such
order or judgment into another currency (the “second currency”) for the
purpose of (a) making or filing a claim or proof against the Borrower, (b)
obtaining an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to any of the Security
Documents, the Borrower shall indemnify and hold harmless the Bank from and
against any loss suffered as a result of any difference between (i) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (ii) the rate or rates of exchange at
which the Bank may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or
proof.  Any amount due from the Borrower under this clause 11.2
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of any of the Security
Documents and the term “rate of
exchange” includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    

     

    
      	
              11.3  

            	
              Environmental
      indemnity

            

    

     

    The
Borrower shall indemnify the Bank on demand and hold the Bank harmless from and
against all costs, claims, expenses, losses, demands, liabilities, actions,
proceedings (whether civil or criminal) penalties, fines, damages, orders or
other outgoings, of whatever nature (including, without limitation, those
arising under Environmental Laws) which may be suffered, incurred, paid by or
made 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 in any manner or for any cause or reason
whatsoever out of an Environmental Claim made or asserted against the Bank which
would or could not have been brought if the Bank 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.

     

    
      	
              12  

            	
              Unlawfulness
      and increased costs

            

    

     

    
      	
              12.1  

            	
              Unlawfulness

            

    

     

    If it is
or becomes contrary to any law or regulation for the Bank to make any Advance or
to maintain the Commitment or fund the Loan the Bank shall promptly 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 either (i) forthwith or (ii) on
a future specified date not being earlier than the latest date permitted by the
relevant law or regulation together with interest and commitment commission
accrued to the date of prepayment and all other sums payable by the Borrower
under this Agreement and/or the Master Swap Agreement.

     

    
      	
              12.2  

            	
              Increased
      costs

            

    

     

    If the
result of any change in, or in the interpretation or application of, or the
introduction of, any law or any regulation, request or requirement (whether or
not having the force of law, but, if not having the force of law, with which the
Bank or, as the case may be, its holding company habitually complies), including
(without limitation) those relating to Taxation, capital adequacy, liquidity,
reserve assets, cash ratio deposits and special deposits, is to:

     

    
      	
              12.2.1  

            	
              subject
      the Bank to Taxes or change the basis of Taxation of the Bank with respect
      to any payment under any of the Security Documents (other than Taxes or
      Taxation on the overall net income, profits or gains of the Bank imposed
      in the jurisdiction in which its principal or lending office under this
      Agreement is located); and/or

            

    

     

    
      	
              12.2.2  

            	
              increase
      the cost to, or impose an additional cost on, the Bank or its holding
      company in making or keeping the Commitment available or maintaining or
      funding all or part of the Loan;
and/or

            

    

     

    
      	
              12.2.3  

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

            

    

     

    
      	
              12.2.4  

            	
              reduce
      the Bank's or its holding company's rate of return on its overall capital
      by reason of a change in the manner in which it is required to allocate
      capital resources to the Bank's obligations under any of the Security
      Documents; and/or

            

    

     

    
      	
              12.2.5  

            	
              require
      the Bank or its holding company to make a payment or forgo a return on or
      calculated by reference to any amount received or receivable by the Bank
      under any of the Security Documents;
and/or

            

    

     

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    
      	
              12.2.6  

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

            

    

     

    then and
in each such case (subject to clause 12.3):

     

    
      	
              (a)  

            	
              the
      Bank shall notify the Borrower in writing of such event promptly upon its
      becoming aware of the same; and

            

    

     

    
      	
              (b)  

            	
              the
      Borrower shall on demand pay to the Bank the amount which the Bank
      specifies (in a certificate setting forth the basis of the computation of
      such amount but not including any matters which the Bank or its holding
      company regards as confidential) is required to compensate the Bank and/or
      (as the case may be) its holding company for such liability to Taxes,
      cost, reduction, payment, forgone return or
  loss.

            

    

     

    For the
purposes of this clause 12.2 “holding company” means the
company or entity (if any) within the consolidated supervision of which the Bank
is included.

     

    
      	
              12.3  

            	
              Exception

            

    

     

    Nothing
in clause 12.2 shall entitle the Bank to receive any amount in respect of
compensation for any such liability to Taxes, increased or additional cost,
reduction, payment, foregone return or loss (a) to the extent that the same is
taken into account in calculating the Additional Cost or (b) to the extent that
the same is the subject of an additional payment under
clause 6.6.

     

    
      	
              13  

            	
              Security
      and set-off

            

    

     

    
      	
              13.1  

            	
              Application
      of moneys

            

    

     

    All
moneys received by the Bank under or pursuant to any of the Security Documents
and expressed to be applicable in accordance with the provisions of this
clause 13.1 shall be applied by the Bank in the following
manner:

     

    
      	
              13.1.1  

            	
              first
      in or toward payment of all unpaid fees, commissions and expenses which
      may be owing to the Bank under any of the Security
    Documents;

            

    

     

    
      	
              13.1.2  

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

            

    

     

    
      	
              13.1.3  

            	
              thirdly
      in or towards repayment of the Loan (whether the same is due and payable
      or not);

            

    

     

    
      	
              13.1.4  

            	
              fourthly
      in or towards payment to the Bank for any loss suffered by reason of any
      such payment in respect of principal not being effected on an Interest
      Payment Date relating to the part of the Loan
  repaid;

            

    

     

    
      	
              13.1.5  

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

            

    

     

    
      	
              13.1.6  

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

            

    

     

    or in
such manner as the Bank may in its reasonable discretion determine.

     

    
      	
              13.2  

            	
              Set-off

            

    

     

    
      	
              13.2.1  

            	
              The
      Borrower authorises the Bank (without prejudice to any of the Bank's
      rights at law, in equity or otherwise), at any time and without notice to
      the Borrower, to apply any credit balance to which the Borrower is then
      entitled standing upon any account of the Borrower with any branch of the
      Bank in or towards satisfaction of any sum due and payable from the
      Borrower to the Bank under any of the Security Documents.  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 13.2.  The
      Bank shall notify the Borrower forthwith upon the exercise or purported
      exercise of any right of set-off giving full details in relation
      thereto.

            

    

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    

     

    
      	
              13.2.2  

            	
              Without
      prejudice to its rights hereunder and/or under the Master Swap Agreement,
      the Bank may at the same time as, or at any time after, any Default under
      this Agreement or the Borrower’s default under the Master Swap Agreement,
      set-off any amount due now or in the future from the Borrower to the Bank
      under this Agreement against any amount due from the Bank to the Borrower
      under the Master Swap Agreement and apply the first amount in discharging
      the second amount.  The effect of any set-off under this
      clause 13.2.2 shall be effective to extinguish or, as the case may
      require, reduce the liabilities of the Bank under the Master Swap
      Agreement.

            

    

     

    
      	
              13.3  

            	
              Further
      assurance

            

    

     

    The
Borrower undertake that the Security Documents shall both at the date of
execution and delivery thereof and so long as any moneys are owing under any of
the Security Documents be valid and binding obligations of the respective
parties thereto and rights of the Bank enforceable in accordance with their
respective terms and that it will, at its expense, execute, sign, perfect and
do, and will procure the execution, signing, perfecting and doing by each of the
other Security Parties of, any and every such further assurance, document, act
or thing as in the reasonable opinion of the Bank may be necessary or desirable
for perfecting the security contemplated or constituted by the Security
Documents.

     

    
      	
              13.4  

            	
              Conflicts

            

    

     

    In the
event of any conflict between this Agreement and any of the other Borrower's
Security Documents, the provisions of this Agreement shall prevail.

     

    
      	
              14  

            	
              Accounts

            

    

     

    
      	
              14.1  

            	
              General

            

    

     

    
      	
              14.1.1  

            	
              The
      Borrower undertakes with the Bank that it
will:

            

    

     

    
      	
              (a)  

            	
              on
      or before the Drawdown Date of the Advance constituting Facility A or the
      first Advance (whichever is the earlier) open or procure that there is
      opened by the relevant Initial Owner the relevant Operating Account and
      prior to the drawdown of any Advance relative to an Additional Ship open
      or procure that there is opened by the Owner of the relevant Additional
      Ship an Operating Account for that Additional Ship;
  and

            

    

     

    
      	
              (b)  

            	
              procure
      that all moneys payable to the Borrower and/or any Owner in respect of the
      Earnings (as defined in the Ship Security Documents) of the Ships shall,
      unless and until the Bank directs to the contrary pursuant to proviso (a)
      to clause 2.1 of the General Assignments, be paid to the relevant
      Operating Account Provided however that if any of the moneys paid to the
      Operating Accounts are payable in a currency other than Dollars, the Bank
      shall convert such moneys into Dollars at the Bank’s spot rate of exchange
      at the relevant time for the purchase of Dollars with such currency and
      the term “spot rate of
      exchange” shall include any premium and costs of exchange payable
      in connection with the purchase of Dollars with such currency;
      and

            

    

     

    
      	
              (c)  

            	
              on
      or before the first Drawdown Date pay or procure that there is paid the
      sum of ten million Dollars ($10,000,000) by way of working capital to the
      Operating Accounts and maintain such balance in accordance with clause
      8.1.16.

            

    

     

    
      	
              14.2  

            	
              Account Terms

            

    

     

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    
      	
              14.2.1  

            	
              Amounts
      standing to the credit of the Operating Accounts shall, (unless otherwise
      agreed between the Bank the Borrower and each of the Owners) bear interest
      at the rates from time to time offered by the Bank to its customers for
      Dollar deposits in comparable amounts for comparable
      periods.  Interest shall accrue on the Operating Accounts from
      day to day and be calculated on the basis of actual days elapsed and a 360
      day year and shall be credited as appropriate to the Operating Accounts at
      such times as the Bank, the Borrower and each of the Owners shall
      agree.

            

    

     

    
      	
              14.2.2  

            	
              The
      Borrower and each of the Owners shall, unless and until a Default shall
      occur and the Bank shall direct to the contrary, be entitled from time to
      time to require that moneys for the time being standing to the credit of
      the Operating Accounts be transferred in such amounts and for such periods
      as the Borrower and each of the Owners select to fixed-term deposit
      accounts (“deposit
      accounts”) opened in the name of the Borrower and each of the
      Owners with the Bank.  The Borrower and each of the Owners shall
      not be entitled pursuant to clause 14.3 to withdraw moneys standing to the
      credit of the Operating Accounts which are the subject of a fixed term
      deposit until the expiry of the period of such deposit unless the Borrower
      and each of the Owners shall, on withdrawing such moneys, pay to the Bank
      on demand any loss or expense which the Bank shall certify that it has
      sustained or incurred as a result of such withdrawal being made prior to
      the expiry of the period of the relevant deposit and the Bank shall be
      entitled to debit the relevant Operating Account for the amount so
      certified prior to such withdrawal being made.  In the event
      that any moneys deposited are to be applied pursuant to clause 14.5, the
      Borrower and each of the Owners shall, on such application being made, pay
      to the Bank on demand any loss or expense which the Bank shall certify
      that it has sustained or incurred as a result of such application being
      made prior to the expiry of the period of the relevant deposit and the
      Bank shall be entitled to debit the Operating Accounts for the amount so
      certified prior to such application being made.  Any deposit
      accounts shall, for all the purposes of the Security Documents, be deemed
      to be sub-accounts of the Operating Accounts from which the moneys
      deposited in the deposit accounts were transferred and all references in
      the Security Documents to the Operating Account shall be deemed to include
      the deposit accounts deemed as aforesaid to be sub-accounts
      thereof.

            

    

     

    
      	
              14.3  

            	
              Operating Account: withdrawals

            

    

     

    Unless
the Bank otherwise agrees in writing, the Borrower and each of the Owners shall
not be entitled to withdraw any moneys from the Operating Accounts at any time
from the date of this Agreement and so long as any moneys are owing under the
Security Documents save that, unless and until a Default shall occur and the
Bank shall direct to the contrary, the Borrower and each of the Owners may,
subject to clause 14.2.2 withdraw moneys from the Operating Accounts, provided
that the aggregate amount standing to the credit of the Operating Accounts after
such withdrawal does not result in a breach of the provisions of clause 8.1.16
for the following purposes:

     

    
      	
              14.3.1  

            	
              to
      pay any amount to the Bank in or towards payment of any instalments of
      interest or principal or any other amounts then payable pursuant to the
      Security Documents and to the extent that there are moneys standing to the
      credit of the Operating Accounts as at any Repayment Date and Interest
      Payment Date or other relevant date, the Borrower and each of the Owners
      hereby irrevocably authorise the Bank to apply such moneys in or towards
      payment of any instalments of interest or principal or other amounts
      payable pursuant to the Security Documents provided always that this shall
      be strictly without prejudice to the obligations of the Borrower and each
      of the Owners to make any such payments to the extent that the aforesaid
      application by the Bank is insufficient to meet the same;
    and

            

    

     

    
      	
              14.3.2  

            	
              to
      pay the proper and reasonable operating expenses (including costs of
      insuring, repairing and maintaining the Ships) of the Ships and the proper
      and reasonable expenses of administering the affairs of the Borrower and
      each of the Owners; and

            

    

     

    
      	
              14.3.3  

            	
              to
      pay any Manager’s remuneration under any Management Agreement in the
      amounts and at the times therein
stated.

            

    

     

    
      	
              14.4  

            	
              Repayment
      under the Intra-Group Loan
Agreements

            

    

     

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    The
Borrower acknowledges and agrees that:

     

    
      	
              14.4.1  

            	
              until
      such time as all sums due and payable under this Agreement and each of the
      other Security Documents have been satisfied in full the obligation of
      each Owner to pay all sums of principal and interest and any other sums
      payable under the relevant Intra-Group Loan Agreements shall be fully
      satisfied by that Owner depositing the relevant sums to the credit of its
      Operating Account and the Borrower hereby irrevocably and unconditionally
      acknowledges that all moneys from time to time standing to the credit of
      the Operating Accounts shall be freely available to the Bank for
      application in or towards payment of any instalments of principal or
      interest or any other amounts then due and payable pursuant to this
      Agreement and any of the other Security Documents;
  and

            

    

     

    
      	
              14.4.2  

            	
              at
      any time after the occurrence of an Event of Default, the Bank may,
      without notice to the Borrower or any Owner, apply all moneys then
      standing to the credit of the Operating Accounts (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 13.1.

            

    

     

    
      	
              14.5  

            	
              Application of accounts

            

    

     

    At any
time after the occurrence of an Event of Default, the Bank may, without notice
to the Borrower or any Owner, apply all moneys then standing to the credit of
the Operating Accounts (together with interest from time to time accruing or
accrued thereon) in payment to the Bank and the Bank shall apply the same in or
towards satisfaction of any sums due to the Bank under the Security Documents in
the manner specified in clause 13.1.

     

    
      	
              14.6  

            	
              Charging of Operating Accounts

            

    

     

    
      	
              14.6.1  

            	
              The
      Operating Accounts and all amounts from time to time standing to the
      credit thereof shall be subject to the security constituted and the rights
      conferred by the Operating Account
Charges.

            

    

     

    
      	
              15  

            	
              Assignment,
      transfer and lending office

            

    

     

    
      	
              15.1  

            	
              Benefit
      and burden

            

    

     

    This
Agreement shall be binding upon, and enure for the benefit of, the Bank and the
Borrower and their respective successors.

     

    
      	
              15.2  

            	
              No
      assignment by Borrower

            

    

     

    The
Borrower may not assign or transfer any of its rights or obligations under this
Agreement.

     

    
      	
              15.3  

            	
              Assignment
      by Bank

            

    

     

    The Bank
may assign all or any part of its rights under this Agreement or under any of
the other Security Documents to any other bank or financial institution (an
“Assignee”) without the
consent of the Borrower.

     

    
      	
              15.4  

            	
              Transfer

            

    

     

    The Bank
may transfer all or any part of its rights, benefits and/or obligations under
this Agreement and/or any of the other Security Documents to any one or more
banks or other financial institutions (a “Transferee”) without the
consent of the Borrower.

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    

     

    
      	
              15.5  

            	
              Documenting
      assignments and transfers

            

    

     

    If the
Bank assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3 or 15.4 the
Borrower undertakes, immediately on being requested to do so by the Bank and at
the cost of the Bank, to enter into, and procure that the other Security Parties
shall enter into, such documents as may be necessary or desirable to transfer to
the Assignee or Transferee all or the relevant part of the Bank's interest in
the Security Documents and all relevant references in this Agreement to the Bank
shall thereafter be construed as a reference to the Bank and/or its Assignee or
Transferee (as the case may be) to the extent of their respective
interests.

     

    
      	
              15.6  

            	
              Lending
      office

            

    

     

    The Bank
shall lend through its office at the address specified above or through any
other office of the Bank selected from time to time by it through which the Bank
wishes to lend for the purposes of this Agreement.  If the office
through which the Bank is lending is changed pursuant to this clause 15.6,
the Bank shall notify the Borrower promptly of such change.

     

    
      	
              15.7  

            	
              Disclosure
      of information

            

    

     

    The Bank
may disclose to a prospective Assignee, Transferee or to any other person who
may propose entering into contractual relations with the Bank in relation to
this Agreement such information about the Borrower as the Bank shall consider
appropriate.

     

    
      	
              16  

            	
              Notices
      and other matters

            

    

     

    
      	
              16.1  

            	
              Notices

            

    

     

    Every
notice, request, demand or other communication under this Agreement or (unless
otherwise provided therein) under any of the other Security Documents
shall:

     

    
      	
              16.1.1  

            	
              be
      in writing delivered personally or by first-class prepaid letter (airmail
      if available) or facsimile transmission or other means of
      telecommunication in permanent written
form;

            

    

     

    
      	
              16.1.2  

            	
              be
      deemed to have been received, subject as otherwise provided in the
      relevant Security Document, in the case of a letter, when delivered
      personally or three (3) days after it has been put in to the post and, in
      the case of a facsimile transmission or other means of telecommunication
      in permanent written form, at the time of despatch (provided that if the
      date of despatch is not a business day in the country of the addressee or
      if the time of despatch is after the close of business in the country of
      the addressee it shall be deemed to have been received at the opening of
      business on the next such business day);
and

            

    

     

    
      	
              16.1.3  

            	
              be
      sent:

            

    

     

    
      	
              (a)  

            	
              to
      the Borrower and any Owner at:

            

    

     

    c/o Top
Ships Inc.

    1, Vas.
Sofias & Meg. Alexandrou Str.

    151 24
Maroussi

    Greece

    

    Fax
no:   +30 210 614 1272

    Attention:   Legal
Department;

     

    
      	
              (b)  

            	
              to
      the Bank at:

            

    

     

    Shipping
Business Centre

    5-10
Great Tower Street

    London

    EC3P
3HX

     

    Fax
No:   +44 207 283 7538

    Attention:  Ship
Finance

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    or to
such other address and/or numbers as is notified by one party to the other party
under this Agreement.

     

    
      	
              16.2  

            	
              No
      implied waivers, remedies
cumulative

            

    

     

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

     

    
      	
              16.3  

            	
              English
      language

            

    

     

    All
certificates, instruments and other documents to be delivered under or supplied
in connection with any of the Security Documents shall be in the English
language or shall be accompanied by a certified English translation upon which
the Bank shall be entitled to rely.

     

    
      	
              16.4  

            	
              Counterparts

            

    

     

    This
Agreement may be entered into in any number of counterparts and by the parties
to it on separate counterparts, each of which when executed and delivered shall
be an original, but all the counterparts shall together constitute one and the
same instrument.

     

    
      	
              17  

            	
              Governing
      law and jurisdiction

            

    

     

    
      	
              17.1  

            	
              Law

            

    

     

    This
Agreement is governed by and shall be construed in accordance with English
law.

     

    
      	
              17.2  

            	
              Submission
      to jurisdiction

            

    

     

    The
Borrower agrees, for the benefit of the Bank, that any legal action or
proceedings arising out of or in connection with this Agreement against the
Borrower or any of its assets may be brought in the English
courts.  The Borrower irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and empowers
Top Tankers (U.K.) Limited at present of Att: Aris Christinis, 8 Duke Street,
London W1U 3EW, England to receive for it and on its behalf, service of process
issued out of the English courts in any such legal action or
proceedings.  The submission to such jurisdiction shall not (and shall
not be construed so as to) limit the right of the Bank to take proceedings
against the Borrower in the courts of any other competent jurisdiction nor shall
the taking of proceedings in any one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction, whether concurrently or
not.

     

    The
parties further agree that only the courts of England and not those of any other
State shall have jurisdiction to determine any claim which the Borrower may have
against the Bank arising out of or in connection with this
Agreement.

     

    IN WITNESS whereof the
parties to this Agreement have caused this Agreement to be duly executed on the
date first above written.                  

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

      Schedule 1

    
      Part
1 - Initial Ships

                                

    

    
      
        	
                Ship

              	
                Owner

              	
                Country
      of Incorporation of Owner

              	
                Flag

              	
                Official
      Number

              	
                Classification
      Society

              	
                Classification

              	
                Ship
      Type

              	
                Year
      Built

              	
                Deadweight/TEU

              	
                Account
      number

              
	
                “DAUNTLESS”

              	
                Lefka
      Shipping Company Limited

              	
                Marshall
      Islands

                 

              	
                Marshall
      Islands

              	
                2308

              	
                Det
      Norske Veritas

              	
                +1A1
      Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus

              	
                Products
      Tanker

              	
                1999

              	
                46,168

              	
                LEFSHI-USD1

              
	
                “DOUBTLESS”

              	
                Falakro
      Shipping Company Limited

              	
                Liberia

              	
                Liberia

              	
                9363

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Products
      Tanker

              	
                1991

              	
                47,076

              	
                FASHOT-USD1

              
	
                “ENDLESS”

              	
                Litochoro
      Shipping Company Limited

              	
                Marshall
      Islands

              	
                Marshall
      Islands

              	
                2040

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Oil
      Tanker

              	
                1992

              	
                135,915

              	
                LITOSHIP-USD1

              
	
                “FAITHFUL”

              	
                Gramos
      Shipping Company Inc.

              	
                Marshall
      Islands

              	
                Marshall
      Islands

              	
                1689

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Products
      Tanker

              	
                1992

              	
                45,000

              	
                GRAMSHIP-USD1

              
	
                “FAULTLESS”

              	
                Parnasos
      Shipping Company Limited

              	
                Liberia

                 

              	
                Liberia

              	
                12601

              	
                Det
      Norske Veritas

              	
                +A1
      Tanker for oil, ESP EO PP3 Nauticus

              	
                Oil
      Tanker

              	
                1992

              	
                154,970

              	
                PASHICO-USD1

              
	
                “FLAWLESS”

              	
                Pylio
      Shipping Company Limited

              	
                Liberia

                 

              	
                Liberia

              	
                9475

              	
                Det
      Norske Veritas

              	
                +1A1
      tanker for oil ESP PP3 ED-SBM

              	
                Oil
      Tanker

              	
                1991

              	
                154,970

              	
                PYSHCO-USD1

              
	
                “LIMITLESS”

              	
                Mytikas
      Shipping Company Limited

              	
                Marshall
      Islands

                 

              	
                Marshall
      Islands

              	
                2034

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Oil
      Tanker

              	
                1993

              	
                136,055

              	
                MYSHCO-USD1

              
	
                “NOISELESS”

              	
                Imitos
      Shipping Company Limited

              	
                Marshall
      Islands

                 

              	
                Marshall
      Islands

              	
                2234

              	
                Det
      Norske Veritas

              	
                +A1,
      oil carrier, ice class DO, (E) +AMS +ACCU

              	
                Oil
      Tanker

              	
                1992

              	
                149,554

              	
                IMSHCO-USD1

              
	
                “PRICELESS”

              	
                Kisavos
      Shipping Company Limited

              	
                Marshall
      Islands

                 

              	
                Marshall
      Islands

              	
                1598

              	
                Det
      Norske Veritas

              	
                +1A1
      Tanker for oil ESP PP3 EO

              	
                Oil
      Tanker

              	
                1991

              	
                154,970

              	
                KISHCO-USD1

              
	
                “SOUNDLESS”

              	
                Agrafa
      Shipping Company Limited

              	
                Marshall
      Islands

                 

              	
                Marshall
      Islands

              	
                2309

              	
                Det
      Norske Veritas

              	
                +1A1
      Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus

              	
                Products
      Tanker

              	
                1999

              	
                46,168

              	
                AGRSHI-USD1

              
	
                “SPOTLESS”

              	
                Idi
      Shipping Company Limited

              	
                Liberia

                 

              	
                Liberia

              	
                9361

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Products
      Tanker

              	
                1991

              	
                47,076

              	
                IDISHCO-USD1

              

         

         

         

        
          
            
            

          

          
            57

            
              

            

          

          
            
            

          

        

         

        	
                “TAINTLESS”

              	
                Giona
      Shipping Company Limited

                 

              	
                Marshall
      Islands

              	
                Marshall
      Islands

              	
                2307

              	
                Det
      Norske Veritas

              	
                +1A1
      Tanker for Oil ESP SPM E0 VCS-2 CSA-1 Nauticus

              	
                Products
      Tanker

              	
                1999

              	
                47,084

              	
                GIOSHI-USD1

              
	
                “TIMELESS”

              	
                Taygetus
      Shipping Company Limited

              	
                Liberia

                 

              	
                Liberia

              	
                9480

              	
                Det
      Norske Veritas

              	
                +1A1
      tanker for oil ESP PP3 ED-SBM

              	
                Oil
      Tanker

              	
                1991

              	
                154,970

              	
                TASHCO-USD1

              
	
                “TOPLESS”

              	
                Agion
      Oros Shipping Company Limited

              	
                Marshall
      Islands

              	
                Marshall
      Islands

              	
                2310

              	
                Det
      Norske Veritas

              	
                NS
      MNS M0

              	
                Products
      Tanker

              	
                1998

              	
                47,262

              	
                AGORSHI-USD1

              
	
                “VANGUARD”

              	
                Pageon
      Shipping Company Limited

              	
                Cyprus

                 

              	
                Cyprus

              	
                709465

              	
                Det
      Norske Veritas

              	
                +1A1
      Ice-C tanker for oil ESP EO Nauticus

              	
                Products
      Tanker

              	
                1992

              	
                47,084

              	
                PAGSHICO-USD1

              

      

    

    

     

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

    Part
2 - Additional Ship Selection Criteria

     

    

     

    
      	
              (A)  

            	
              Each
      Additional Ship shall:

            

    

     

    
      	
              1  

            	
              be
      a standard double hull crude oil or double hull product oil
      tanker;

            

    

     

    
      	
              2  

            	
              be
      aged 10 years or less on the relevant Delivery
  Date;

            

    

     

    
      	
              3  

            	
              maintain
      a flag and class acceptable to the
Bank;

            

    

     

    
      	
              4  

            	
              be
      wholly owned by the Borrower or an Additional Owner;
  and

            

    

     

    
      	
              5  

            	
              have
      a purchase price which shall not exceed the Fair Market Value for such
      Additional Ship.

            

    

     

    
      	
              (B)  

            	
              The
      Bank shall be satisfied that Facility B relating to such Additional Ship
      can be repaid by the Borrower in accordance with clause 4.2; and

            

    

     

    
      	
              (C)  

            	
              Each
      Additional Ship shall be acceptable to the Bank in its absolute
      discretion.

            

    

     

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

    Part
3 - Maximum amount of Intra-Group Loan per Initial Ship

     

    
      
        
          
            
              
                	
                        Initial
      Ships

                      	 	
                        Maximum
      Amount

                        $

                      	 
	
                        “DAUNTLESS”

                      	 	 	36,550,000.00	 
	
                        “DOUBTLESS”

                      	 	 	10,500,000.00	 
	
                        “ENDLESS”

                      	 	 	19,300,000.00	 
	
                        “FAITHFUL”

                      	 	 	11,100,000.00	 
	
                        “FAULTLESS”

                      	 	 	25,800,000.00	 
	
                        “FLAWLESS”

                      	 	 	18,100,000.00	 
	
                        “LIMITLESS”

                      	 	 	19,800,000.00	 
	
                        “NOISELESS”

                      	 	 	25,800,000.00	 
	
                        “PRICELESS”

                      	 	 	25,800,000.00	 
	
                        “SOUNDLESS”

                      	 	 	36,550,000.00	 
	
                        “SPOTLESS”

                      	 	 	10,500,000.00	 
	
                        “TAINTLESS”

                      	 	 	36,550,000.00	 
	
                        “TIMELESS”

                      	 	 	18,100,000.00	 
	
                        “TOPLESS”

                      	 	 	34,350,000.00	 
	
                        “VANGUARD”

                      	 	 	10,856,899.82	 
	 
      	 	 	$339,656,899.82	 

              

            

          

        

      

    

    

     

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

    Part
4 - Details of Initial Owners

     

    
      
        
          
            
              
                
                  	
                          Initial
      Ship

                        	
                          Initial
      Owner

                        	
                          Country
      of Incorporation

                        	
                          Address

                        	
                          Shareholder

                        
	
                          “DAUNTLESS”

                        	
                          Lefka
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “DOUBTLESS”

                        	
                          Falakro
      Shipping Company Limited

                        	
                          Liberia

                        	
                          80
      Broad Street, Monrovia, Liberia

                        	
                          Borrower

                        
	
                          “ENDLESS”

                        	
                          Litochoro
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “FAITHFUL”

                        	
                          Gramos
      Shipping Company Inc.

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “FAULTLESS”

                        	
                          Parnasos
      Shipping Company Limited

                        	
                          Liberia

                        	
                          80
      Broad Street, Monrovia, Liberia

                        	
                          Borrower

                        
	
                          “FLAWLESS”

                        	
                          Pylio
      Shipping Company Limited

                        	
                          Liberia

                        	
                          80
      Broad Street, Monrovia, Liberia

                        	
                          Borrower

                        
	
                          “LIMITLESS”

                        	
                          Mytikas
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “NOISELESS”

                        	
                          Imitos
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “PRICELESS”

                        	
                          Kisavos
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “SOUNDLESS”

                        	
                          Agrafa
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                           

                        	
                          Borrower

                        
	
                          “SPOTLESS”

                        	
                          Idi
      Shipping Company Limited

                        	
                          Liberia

                        	
                          80
      Broad Street, Monrovia, Liberia

                        	
                          Borrower

                        
	
                          “TAINTLESS”

                        	
                          Giona
      Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                        	
                          Borrower

                        
	
                          “TIMELESS”

                        	
                          Taygetus
      Shipping Company Limited

                        	
                          Liberia

                        	
                          80
      Broad Street, Monrovia, Liberia

                        	
                          Borrower

                        
	
                          “TOPLESS”

                        	
                          Agion
      Oros Shipping Company Limited

                        	
                          Marshall
      Islands

                        	
                          Trust
      Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall
      Islands

                        	
                          Borrower

                        
	
                          “VANGUARD”

                        	
                          Pageon
      Shipping Company Limited

                        	
                          Cyprus

                        	
                          284
      Arch. Makarios III Avenue, Limassol, Cyprus

                        	
                          Borrower

                        

                

              

            

          

        

      

    

    

     

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

                              
Schedule 2                                

    Form
of Drawdown Notice

    (referred
to in clause 2.2)

     

    To:   
      The Royal Bank of Scotland plc

    Shipping Business Centre

    5-10 Great Tower Street

    London

       EC3P
3HX                                                                                                                               
                                                                                     2005

     

    U.S.$545,656,899.82
Loan

    Facility
Agreement dated ·
2005

     

    We refer
to the above Agreement and hereby give you notice that we wish to draw down the
sum of [·]
representing:

     

    [Facility
A]

    [the
Initial Revolving Amount]

    [Advance(s)
under Facility B]

    [the
Contract Instalment Advance under Facility B payable at [stage]]

    [the
Delivery Date Advance under Facility B]

    [the
Expected Project Cost under Facility B]

    

    on {date} [and select a first
Interest Period in respect thereof of [] months] [the first Interest Period in
respect thereof to expire on {date}].  The funds
should be credited to [name and
number of account] with [details of bank in New York
City].

     

    We
confirm that:

     

    
      	
              (a)  

            	
              no
      event or circumstance has occurred and is continuing which constitutes a
      Default;

            

    

     

    
      	
              (b)  

            	
              the
      representations and warranties contained
in

            

    

     

    
      	
              (i)  

            	
              clauses 7.1
      and 7.2 of the Loan Agreement (and so that the representation and warranty
      in clause 7.1.9 refers for this purpose to the audited financial
      statements of the Borrower and the consolidated financial statements of
      the Borrower and its Related Companies in respect of the financial year
      ended on {date});
      and

            

    

     

    
      	
              (ii)  

            	
              clause 4.1
      and 4.2 of each Owner’s Guarantee (and so that the representation and
      warranty in clause 4.1.6 of each Owner’s Guarantee refers for this
      purpose to the consolidated financial statements of the Borrower and its
      Related Companies in respect of the financial year ended on {date};

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              there
      has been no material adverse change in our financial position or in the
      consolidated financial position of ourselves and our Related Companies
      from that set forth in the financial statements referred to in (b)
      above.

            

    

     

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

     

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

    For and
on behalf of

    TOP
SHIPS INC

     

    
      
        
           

           

        

         

      

      
        62

        
          

        

      

      
         

      

    

    Schedule 3

    Documents
and evidence required as conditions precedent to the Commitment

     

    (referred
to in clause 9)

     

    Part
1

     

    
      	
              (a)  

            	
              Constitutional
      documents

            

    

     

    copies,
certified by an officer of each Security Party as true, complete and up to date
copies of all documents which contain or establish or relate to the constitution
of that Security Party;

     

    
      	
              (b)  

            	
              Corporate
      authorisations

            

    

     

    copies of
resolutions of the directors and shareholders of each Security Party approving
such of the Underlying Documents and the Security Documents to which such
Security Party is, or is to be, party and authorising the signature, delivery
and performance of such Security Party's obligations thereunder, certified (in a
certificate dated no earlier than five (5) Banking Days prior to the date of
this Agreement) by an officer of such Security Party as:

     

    
      	
              (i)  

            	
              being
      true and correct;

            

    

     

    
      	
              (ii)  

            	
              being
      duly passed at meetings of the directors of such Security Party and other
      than in the case of the Borrower of the shareholders of such Security
      Party each duly convened and held;

            

    

     

    
      	
              (iii)  

            	
              not
      having been amended, modified or revoked;
and

            

    

     

    
      	
              (iv)  

            	
              being
      in full force and effect,

            

    

     

    together
with originals or certified copies of any powers of attorney issued by any
Security Party pursuant to such resolutions;

     

    
      	
              (c)  

            	
              Specimen
      signatures

            

    

     

    copies of
the signatures of the persons who have been authorised on behalf of each
Security Party to sign such of the Underlying Documents and the Security
Documents to which such Security Party is, or is to be, party and to give
notices and communications, including notices of drawing, under or in connection
with the Security Documents, certified (in a certificate dated no earlier than
five (5) Banking Days prior to the date of this Agreement) by an officer of such
Security Party as being the true signatures of such persons;

     

    
      	
              (d)  

            	
              Certificates
      of incumbency

            

    

     

    a list of
directors and officers of each Security Party specifying the names and positions
of such persons, certified (in a certificate dated no earlier than five (5)
Banking Days prior to the date of this Agreement) by an officer of such Security
Party to be true, complete and up to date;

     

    
      	
              (e)  

            	
              Borrower’s
      consents and approvals

            

    

     

    a
certificate (dated no earlier than five (5) Banking Days prior to the date of
this Agreement) from an officer of the Borrower that no consents,
authorisations, licences or approvals are necessary for the Borrower to
authorise or are required by the Borrower in connection with the borrowing by
the Borrower of the Loan pursuant to this Agreement or the execution, delivery
and performance of the Borrower's Security Documents;

     

    
      
        
           

           

        

         

      

      
        63

        
          

        

      

      
         

      

    

     

    
      	
              (f)  

            	
              Other
      consents and approvals

            

    

     

    a
certificate (dated no earlier than five (5) Banking Days prior to the date of
this Agreement) from an officer of each Security Party (other than the Borrower)
that no consents, authorisations, licences or approvals are necessary for such
Security Party to guarantee and/or grant security for the borrowing by the
Borrower of the Commitment pursuant to this Agreement and execute, deliver and
perform the Security Documents insofar as such Security Party is a party
thereto;

     

    
      	
              (g)  

            	
              Additional
      documents and evidence

            

    

     

    to the
extent required by any change in applicable law and regulation or any changes in
the Bank’s own internal guidelines since the date on which the applicable
documents and evidence were delivered to the Bank pursuant to clause 8.1.12,
such further documents and evidence as the Bank shall require to identify the
Borrower and the other Security Parties and any other persons involved or
affected by the transaction(s) contemplated by this Agreement; and

     

    
      	
              (h)  

            	
              Fees,
      commissions and expenses

            

    

     

    evidence
that any fee and commitment commission due pursuant to the terms of
clause 5.1 or any other provision of the Security Documents and all
expenses under clause 8.2 have been paid in full.

    
      
        
           

        

         

      

      
        64

        
          

        

      

      
         

      

    

    Part
2

    

    Documents
and evidence required for the First Advance being made

     

    
      	
              (a)  

            	
              Conditions
      precedent

            

    

     

    evidence
that the conditions precedent set out in Part 1 of Schedule 3 remain fully
satisfied;

     

    
      	
              (b)  

            	
              Security
      Documents

            

    

     

    the
Master Swap Agreement, the Master Swap Agreement Security Deed, the Accounts
Charges, the relevant Owner’s Guarantees, the Assignment of the Intra-Group Loan
Agreements and the relevant Intra-Group Loan Agreement, duly
executed;

     

    
      	
              (c)  

            	
              Legal
      opinions

            

    

     

    (i)     Marshall Islands
opinion

     

    an
opinion of Seward & Kissel special legal advisers to the Bank dated no
earlier than fifteen (15) days prior to the date of this Agreement;

     

    (ii)    Owner(s)’ opinion

     

    an
opinion of the Bank’s special legal advisers in each Relevant Jurisdiction with
respect to the relevant Owner dated no earlier than fifteen (15) days prior to
the date of this Agreement;

     

    (iii)   Manager(s)’
opinion

     

    an
opinion of the Bank’s special legal advisers in each Relevant Jurisdiction with
respect to the relevant Manager dated no earlier than fifteen (15) days prior to
the date of this Agreement;

     

     (iv)   Further opinions

     

     any
such further opinion as may be required by the Bank;

     

    
      	
              (d)  

            	
              Borrower’s
      process agent

            

    

     

    a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Borrower’s agent for receipt of service of
proceedings referred to in clause 17.2 accepting its appointment under the
said clause and under each of the other Security Documents in which it is
or is to be appointed as the Borrower’s agent;

     

    
      	
              (e)  

            	
              Owner’s
      process agent

            

    

     

    a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Owner’s or the Security Party’s agent for
receipt of service of proceedings referred to in, inter alia, clause 9.2 of
the Owner’s Guarantee accepting its appointment under the said clause and
under each of the other Security Documents in which it is or is to be appointed
as the Owner’s or the Security Party’s agent;

     

    
      	
              (f)  

            	
              Manager’s
      process agent

            

    

     

    a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Manager’s or the Security Party’s agent for
receipt of service of proceedings referred to in, inter alia, paragraph 6(b) of
the Manager’s Undertaking accepting its appointment under the said
clause and under each of the other Security Documents in which it is or is
to be appointed as the Manager’s or the Security Party’s agent;

    
      
        
           

           

        

         

      

      
        65

        
          

        

      

      
         

      

    

     

    
      	
              (g)  

            	
              Valuations

            

    

     

    copies,
certified by an officer of the Borrower, of valuations of each relevant Ship
dated no earlier than fifteen (15) days prior to the Drawdown Date of the first
Advance setting out the fair market value of each relevant Ship, such valuations
to be conducted in accordance with clause 8.2.2 and each valuation to be in form
and substance acceptable to the Bank;

     

    
      	
              (h)  

            	
              Fees,
      commissions and expenses

            

    

     

    evidence
that any fees and commission due from the Borrower pursuant to the terms of
clause 5.1 or any other provision of the Security Documents and all expenses
under clause 5.2 have been paid in full;

     

    
      	
              (i)  

            	
              Operating
      Accounts

            

    

     

    evidence
that each of the Operating Accounts has been opened together with mandates in
respect thereof and the sum prescribed in clause 14.1.3 has been credited to
each of the Operating Accounts (excluding the moneys representing any Borrower’s
equity contribution to the relevant Contract Price);

     

    
      	
              (j)  

            	
              Ownership

            

    

     

    evidence
in a form and substance acceptable to the Bank in its sole discretion confirming
that:

     

    
      	
              (i)  

            	
              each
      Owner is the legally and beneficially wholly-owned subsidiary of the
      Borrower; and

            

    

     

    
      	
              (ii)  

            	
              the
      Shareholders are the legal and ultimate beneficial owners of fifteen per
      cent (15%) of the issued share capital of the
  Borrower;

            

    

     

    
      	
              (k)  

            	
              Financial
      statements and Compliance
Certificate

            

    

     

    the
financial statements for the year ending 31 December 2004 required pursuant to
clause 8.1.5 and the Compliance Certificate required pursuant to clause 8.1.6
have been delivered to the Bank;

     

    
      	
              (l)  

            	
              Subordination
      of rights

            

    

     

    evidence
in a form and substance acceptable to the Bank in its sole discretion that all
equity holders of the Borrower and/or each Owner are legally and effectively
subordinated to any and all amounts due to the Bank under this Agreement and
each of the other Security Documents; and

     

    
      	
              (m)  

            	
              Existing
      Loan Agreement

            

    

     

    evidence
that all sums due and payable under the Existing Loan Agreement have been paid
and/or prepaid in full.

     

    
      
        
           

        

         

      

      
        66

        
          

        

      

      
         

      

    

    Part
3

     

    Documents
and evidence required as conditions precedent

     

    to
all Advances being made

     

    
      	
              (a)  

            	
              Conditions
      precedent

            

    

     

    if an
Additional Ship is a newbuilding, evidence that the conditions precedent set out
in Part 1 and Part 2 of Schedule 3, remain fully satisfied;

     

    
      	
              (b)  

            	
              No
      claim

            

    

     

    if an
Additional Ship is a newbuilding, evidence satisfactory to the Bank that the
relevant Builder (and any other party who may have a claim pursuant to the
relevant Contract) has no claims against such Additional Ship or the Borrower or
relevant Owner and that there have been no breaches of the terms of the relevant
Contract or the Refund Guarantee or any default thereunder;

     

    
      	
              (c)  

            	
              No
      variations to Contract

            

    

     

    if an
Additional Ship is a newbuilding, evidence that there have been no amendments or
variations agreed to the relevant Contract and that no action has been taken by
the Borrower; the relevant Owner or the relevant Builder which might in any way
render the relevant Contract inoperative or unenforceable, in whole or in
part;

     

    
      	
              (d)  

            	
              No
      Encumbrance

            

    

     

    if an
Additional Ship is a newbuilding, evidence that there is no Encumbrance of any
kind created or permitted by any person on or relating to the relevant Contract
other than a Permitted Encumbrance;

     

    
      	
              (e)  

            	
              Certified
      Underlying Documents

            

    

     

    a copy,
certified (in a certificate dated no earlier than five (5) Banking Days prior to
the date of this Agreement) as a true and complete copy by an officer of the
Borrower or relevant Owner of each of the Underlying Documents other than with
respect to any Refund Guarantee which the Borrower and/or the relevant Owner
shall provide in original form and which Refund Guarantee shall be in a form and
substance acceptable to the Bank;

     

    
      	
              (f)  

            	
              Ship
      conditions

            

    

     

    Evidence
that the Ship(s) for which the relevant Advance is to be made:

     

    
      	
              (i)  

            	
              Registration
      and Encumbrances

            

    

     

    is
permanently or, as the case may be, provisionally registered in the name of the
relevant Owner under the laws and flag of the relevant Flag State through the
relevant Registry and that such Ship and its Earnings, Insurances and
Requisition Compensation (as defined in the relevant Ship Security Documents)
are free of Encumbrances;

     

    
      	
              (ii)  

            	
              Classification

            

    

     

    maintains
the relevant Classification free of all requirements and recommendations of the
relevant Classification Society; and

     

    
      
        
           

           

        

         

      

      
        67

        
          

        

      

      
         

      

    

     

    
      	
              (iii)  

            	
              Insurance

            

    

     

    is
insured in accordance with the provisions of the relevant Ship Security
Documents and all requirements of such Ship Security Documents in respect of
such insurance have been complied with (including without limitation,
confirmation from the protection and indemnity association or other insurer with
which such Ship is, or is to be, entered for insurance or insured against
protection and indemnity risks (including oil pollution risks) that any
necessary declarations required by the association or insurer for the removal of
any oil pollution exclusion have been made and that any such exclusion does not
apply to such Ship);

     

    
      	
              (g)  

            	
              Cancellation

            

    

     

    in
respect of an Additional Ship, evidence that the prior registration of such Ship
in the name of the relevant Seller has been or within a period of seven (7) days
following the Delivery Date of such Ship, will be cancelled and that no
Encumbrances are registered against such Ship on such prior
register;

     

    
      	
              (h)  

            	
              Borrower’s
      and Owner’s further corporate
authorisations

            

    

     

    copies of
the resolutions of the Borrower’s and relevant Owner’s directors and
shareholders evidencing authorisation of the acceptance of the delivery of such
Ship and authorisation and approval of the Ship Security Documents for such Ship
and the transactions contemplated therein and any other documents issued or to
be issued pursuant thereto and authorising their appropriate officers or other
representatives to execute the same on their behalf certified in the manner
referred to in paragraph (b) of Part 1 of this Schedule (or other
evidence of such authorisation, approval and/or ratification) and any power of
attorney issued pursuant to the said resolutions;

     

    
      	
              (i)  

            	
              Other
      further corporate authorisations

            

    

     

    copies of
the resolutions of the directors of each Security Party evidencing authorisation
and approval of the Manager’s Undertaking for such Ship to which such Security
Party is, or is to be a party and the transactions contemplated therein and any
other documents issued or to be issued pursuant thereto and authorising its
appropriate officer or other representative to execute the same on its behalf
certified in the manner referred to in paragraph (b) of Part 1 of this
Schedule (or other evidence of such authorisation, approval and/or
ratification) and any power of attorney issued pursuant to the said
resolutions;

     

    
      	
              (j)  

            	
              Updated
      certificates of incumbency

            

    

     

    a list of
directors and officers of each Security Party specifying the names and positions
of such persons and copies of the signatures of the persons who have been
authorised on behalf of each Security Party to sign such of the Underlying
Documents and the Security Documents to which such Security Party is, or is to
be, party and to give notices and communications, including notices of drawing,
under or in connection with the Security Documents, certified (in a certificate
dated no earlier than five (5) Banking Days prior to the Delivery Date for such
Ship) by an officer of such Security Party to be, in the case of the list of
directors, true, complete and up to date and, in the case of the specimen
signatures, true signatures of such persons or a certificate by an officer of
such Security Party that the list provided in respect of the Security Party
pursuant to paragraph (d) of Part 1 of this Schedule and that the
specimen signatures provided in respect of the Security Party pursuant to
paragraph (c) of Part 1 of this Schedule remain true, complete and up to
date;

     

    
      	
              (k)  

            	
              Management

            

    

     

    to the
extent not provided pursuant to Schedule 3, Part 1, the Manager’s Undertaking
duly executed and copies, certified by an officer of the Borrower or the
relevant Owner, of the Management Agreement for such Ship;

     

    
      
        
           

           

        

         

      

      
        68

        
          

        

      

      
         

      

    

     

    
      	
              (l)  

            	
              Security
      Documents

            

    

     

    the Ship
Security Documents (including without limitation in the case of an Additional
Ship which is a newbuilding the Pre-delivery Security Assignment) for such Ship,
the Intra Group Loan Agreement, the Assignment of Intra Group Loan Agreement,
the relevant Owner’s Guarantee and the relevant Account Charge duly
executed;

     

    
      	
              (m)  

            	
              Mortgage
      registration

            

    

     

    evidence
that the Mortgage over such Ship has been registered against such Ship under the
laws and flag of the relevant Flag State through the relevant
Registry;

     

    
      	
              (n)  

            	
              Notices
      of assignment and acknowledgement

            

    

     

    copies of
duly executed notices of assignment required by the terms of such Ship Security
Documents and in the forms prescribed by such Ship Security
Documents;

     

    
      	
              (o)  

            	
              Valuations

            

    

     

    a
valuation (dated not more than five (5) days prior to the date of the relevant
Advance) of the relevant Ship demonstrating that the market value of such Ship
(or if appropriate the aggregate market value of the Ship and any other
Mortgaged Ships) determined in accordance with clause 8.2.2 results in the
Security Value being at least equal to the Security Requirement;

     

    
      	
              (p)  

            	
              Survey
      report

            

    

     

    if so
required by the Bank, a survey report by surveyors acceptable to the Bank and
dated not earlier than thirty (30) days prior to the Drawdown Date of the
Advance constituting Facility A or, as the case may be, the Initial Revolving
Amount or, as the case may be, the relevant Advance, evidencing that such Ship
is seaworthy in every respect;

     

    
      	
              (q)  

            	
              Evidence
      of subordination

            

    

     

    evidence
in a form and substance satisfactory to the Bank that (i) any Indebtedness of
the Borrower incurred pursuant to any shareholder loan(s) and/or (ii) any part
of the relevant Contract Price not advanced by way of the Loan and borrowed by
the Borrower has been subordinated in all respects to the Borrower’s obligations
under this Agreement and the Master Swap Agreement;

     

    
      	
              (r)  

            	
              ISM
      Code and ISPS Code

            

    

     

    a copy
certified as a true and complete copy by an officer of the relevant Manager of
the DOC issued to the Operator and  the relevant Owner of the SMC for
the relevant Ship and the International Ship Security Certificate issued by the
relevant Flag State in accordance with the ISPS Code for the relevant
Ship;

     

    
      	
              (s)  

            	
              Legal
      opinions

            

    

     

    
      	
              (i)  

            	
              an
      opinion of Chrysses Demetriades & Co., special legal advisers in the
      Republic of Cyprus to the Bank;

            

    

     

    
      	
              (ii)  

            	
              an
      opinion of Seward & Kissel, special legal advisers to the Bank on
      Liberian law; and

            

    

     

    
      	
              (iii)  

            	
              an
      opinion of Seward & Kissel, special legal advisers to the Bank on
      Marshall Islands law;

            

    

     

    
      	
              (iv)  

            	
              any
      such further opinion as may be required by the
  Bank;

            

    

     

    
      
        
           

           

        

         

      

      
        69

        
          

        

      

      
         

      

    

    
      	
              (t)  

            	
              Insurance
      Opinion

            

    

     

    an
opinion from Messrs. BankServe Insurance Services Limited, insurance consultants
to the Bank, on the insurances effected or to be effected in respect of such
Ship upon and following the relevant Drawdown Date;

     

    
      	
              (u)  

            	
              Owner’s
      process agent

            

    

     

    a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Owner agent for receipt of service of
proceedings referred to in the documents issued by such Owner accepting its
appointment under the said clause;

     

    
      	
              (v)  

            	
              Managers’
      process agent

            

    

     

    a copy,
certified as a true copy by the Borrower’s solicitors or other person acceptable
to the Bank of a letter from the Managers’ agent for receipt of service of
proceedings referred to in paragraph 6(b) of the Manager’s Undertakings
accepting its appointment under the said paragraph;

     

    
      	
              (w)  

            	
              Manager's
      confirmation

            

    

     

    the
managers of such Ship have confirmed in writing that the representations and
warranties set out in clause 7.2.11
(Environmental matters) are true and correct;

     

    
      	
              (x)  

            	
              Certificates
      of financial responsibility

            

    

     

    a copy of
a certificate of financial responsibility in relation to each Ship complying
with the requirements of the United States Oil Pollution Act 1990 or the United
States Comprehensive Environmental Response Compensation Liability Act 1980
together with evidence of approval thereof by the relevant regulatory
authorities; and

     

    
      	
              (y)  

            	
              Delivery
      Documents

            

    

     

    in the
case of a drawdown relating to an Additional Ship, copies of the Builder’s
Certificate and/or Bill of Sale and the Protocol of Delivery and Acceptance and
any other document required by the Bank in relation to the change of title of
such Additional Ship; and

     

    
      	
              (z)  

            	
              Contract
      Price Payment

            

    

     

    in the
case of a drawdown relating to an Additional Ship, evidence that the Borrower is
in a position to make payment of the difference between the relevant Advance and
the Contract Price for the relevant Additional Ship.

    
       

       

    

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

    Part
4

     

    Additional
documents and evidence required as a condition precedent to any Contract

    Instalment
Advance of Facility B (referred to in clause 9.4)

     

    
      	
              (a)  

            	
              Conditions
      precedent

            

    

     

    evidence
that the conditions precedent set out in Part 1 and Part 2 of Schedule 3, remain
fully satisfied;

     

    
      	
              (b)  

            	
              No
      claim

            

    

     

    evidence
satisfactory to the Bank that the relevant Builder (and any other party who may
have a claim pursuant to the relevant Contract) has no claims against the
Additional Ship or the Borrower or relevant Owner and that there have been no
breaches of the terms of the relevant Contract or the Refund Guarantee or any
default thereunder;

     

    
      	
              (c)  

            	
              No
      variations to Contract

            

    

     

    evidence
that there have been no amendments or variations agreed to the relevant Contract
and that no action has been taken by the Borrower, the relevant Owner or the
relevant Builder which might in any way render such Contract inoperative or
unenforceable, in whole or in part;

     

    
      	
              (d)  

            	
              No
      Encumbrance

            

    

     

    evidence
that there is no Encumbrance of any kind created or permitted by any person on
or relating to the relevant Contract other than a Permitted
Encumbrance;

     

    
      	
              (e)  

            	
              Equity
      contribution

            

    

     

    evidence
in a form and substance satisfactory to the Bank, that the Borrower or the
relevant Owner has paid to the relevant Builder any required equity contribution
for such Additional Ship;

     

    
      	
              (f)  

            	
              Invoices

            

    

     

    a
certified copy of the invoices in respect of which payment is due to the
relevant Builder from the Borrower or the relevant Owner and such other evidence
as the Bank may reasonably require that such payment is due and payable to such
Builder;

     

    
      	
              (g)  

            	
              Fees,
      commissions and expenses

            

    

     

    evidence
that any fees due from the Borrower pursuant to the terms of clause 5.1 or
any expenses under clause 5.2 or any other provision of the Security Documents
have been paid in full; and

     

    
      	
              (h)  

            	
              Title
      documents

            

    

     

    if the
Additional Ship is a newbuilding copies of the Builder’s certificate and bill of
sale in favour of the relevant Owner from the Builder and a protocol of delivery
and acceptance duly executed and such other evidence as the Bank may reasonably
require (including evidence of the Builder’s corporate authorisations to deliver
title to the relevant Ship) that the relevant Owner will obtain good title to
the relevant Ship on or before the relevant Delivery Date.

    
      
        
           

        

         

      

      
        71

        
          

        

      

      
         

      

    

    Schedule 4

    Additional
Cost

     

    
      	
              1  

            	
              The
      Additional Cost shall be calculated by the Bank in respect of each period
      for which it falls to be calculated in relation to the Loan in accordance
      with the following formula:

            

    

     

    
      
        
          	
                   

                	
                  Y

                	
                  0.01F

                	
                   =
      per cent per annum

                
	
                  100

                

        

      

       

    

    Where:

     

    F  = The effective
per annum rate of charge payable by the Bank in respect of the Periodic Fee
expressed as an amount of Sterling per £1,000,000 of its Tariff Base, calculated
as being the amount of the Periodic Fee divided by the result of dividing the
amount of the Bank’s Tariff Base by £1,000,000 or, in the case only of the
Periodic Fee for the four month period ended 31 March 2002, the amount resulting
from the foregoing calculations multiplied by three.

     

    Y  =  The fraction of
foreign currency liabilities taken into account under the Fees Rules in
calculating the Tariff Base (disregarding any offset for claims on non-resident
offices).

     

    
      	
              2  

            	
              For
      the purposes of calculating the Additional
Cost:

            

    

     

    
      	
              (a)  

            	
              the
      formula is applied on the first day of each period for which it falls to
      be calculated (and the result shall apply for the duration of such
      period);

            

    

     

    
      	
              (b)  

            	
              each
      amount is rounded up to the nearest four decimal places;
    and

            

    

     

    
      	
              (c)  

            	
              if
      the formula produces a negative percentage, the percentage shall be taken
      as zero.

            

    

     

    
      	
              3  

            	
              If
      alternative or additional financial requirements are imposed by the Bank
      of England, the Financial Services Authority or any other United Kingdom
      governmental authority or agency which in the Bank’s opinion make the
      formula no longer appropriate, the Bank shall be entitled by notice to the
      Borrower to stipulate such other formula as shall be suitable to apply in
      substitution for the formula.  Any such other formula so
      stipulated shall take effect in accordance with the terms of such
      notice.

            

    

     

    
      	
              4  

            	
              In
      this Schedule 4:

            

    

     

    
      	
              (a)  

            	
              “Fees Rules” means the
      then current rules on periodic fees contained in the Supervision manual of
      the Financial Services Authority’s Handbook of rules and guidance or such
      other law or regulation as may be in force from time to time in respect of
      the payment of fees for the regulation of the accepting of
      deposits;

            

    

     

    
      	
              (b)  

            	
              “Fee Tariffs” means the
      fee tariffs most recently published by the Financial Services Authority in
      the Fees Rules in respect of activity group A.1 Deposit acceptors
      therein;

            

    

     

    
      	
              (c)  

            	
              “Periodic Fee” means the
      periodic fee for the period to which the Fee Tariffs relate payable to the
      Financial Services Authority under the Fees Rules by the Bank in respect
      of its being in the activity group A.1 Deposit acceptors in the Fees
      Rules;

            

    

     

    
      	
              (d)  

            	
              “Sterling” means the
      lawful currency of the United Kingdom;
and

            

    

     

    
      	
              (e)  

            	
              “Tariff Base” has the
      meaning given to it in the Fees Rules in respect of activity group A.1
      Deposit acceptors therein and the period to which the Fee Tariffs relate,
      and will be calculated in accordance
therewith.

            

    

     

    
      
        
           

        

         

      

      
        72

        
          

        

      

      
         

      

    

     

    Schedule 5

    Form
of Compliance Certificate

     

    

    To:          The
Royal Bank of Scotland plc

    Shipping
Business Centre

    5-10
Great Tower Street

    London

    EC3P
3HX

     

    

    From:     
Top Ships Inc. (the “Company”)

    2005

    

    Facilities Agreement dated
[·] 2005 (the “Facilities
Agreement”)

     

    Terms
defined in the Corporate Guarantee shall have the same meaning when used
herein.

     

    We,
[  ] and [  ], each being a director of the Company, refer
to clause 8.5 of the Facilities Agreement and hereby certify that, as at [insert date of
accounts] and on the date hereof:

     

    
      	
              1  

            	
              Financial
      Covenants

            

    

     

    
      	
              (a)  

            	
              the
      Company’s Adjusted Net Worth is not less than two hundred and fifty
      million Dollars ($250,000,000) and exceeds thirty five per cent (35%) of
      Total Assets; and

            

    

     

    
      	
              (b)  

            	
              EBITDA
      of the Company exceeds one hundred and twenty per cent (120%) of the
      aggregate amount of Fixed Charges;

            

    

     

    
      	
              (c)  

            	
              the
      Liquid Funds of the Guarantor are not less than the higher
    of:

            

    

     

    
      	
              (i)  

            	
              ten
      million Dollars ($10,000,000); or

            

    

     

    
      	
              (ii)  

            	
              five
      hundred thousand Dollars ($500,000) per Group
  Vessel.

            

    

     

    and we
hereby confirm that the above comply with the provisions of clause 8.5 of the
Facilities Agreement.

     

    
      	
              2  

            	
              Default

            

    

     

    [No
Default has occurred and is continuing]

     

    or

     

    [The
following Default has occurred and in continuing: [provide details of
Default].  [The following steps are being taken to remedy it:
[provide details of steps
being taken to remedy Default]].

     

    

    

    Signed:             ............................

           [Authorised
Signatory]

     

    

    
      
        
        

      

      
        73

        
          

        

      

      
        
        

      

    

    Schedule 6

    Master
Swap Agreement and Novation Agreement

     

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

    
      Schedule 7

    

    Form
of Master Swap Agreement Security Deed

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

    Schedule 8

    Form
of Intra-Group Loan Agreements

     

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

    Schedule 9

    Form
of Assignment of Intra-Group Loan Agreements

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

    Schedule 10

    Form
of Owner’s Guarantee

     

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

    Schedule 11

    Forms
of Mortgages

     

    

    Part
1

    Form
of Cyprus Mortgage

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

    Part
2

    Form
of Liberian/Marshall Islands Mortgage

     

    

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

    Schedule 12

    Form
of Deed of Covenant

     

    

    

     

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

    Schedule 13

    Forms
of General Assignments

     

    

    Part
1

    Form
of Cyprus General Assignment

    

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

    Part
2

    Form
of Liberian/Marshall Island General Assignment

     

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

    Schedule 14

    Form
of Operating Accounts Charge

     

    
      
        
           

           

        

         

      

      
        84

        
          

        

      

      
         

      

    

    Schedule 15

    Form
of Manager’s Undertaking

     

    

    

    
      
        
           

        

         

      

      
        85

        
          

        

      

      
         

      

    

    

      

      
        	
                The
      Borrower

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                TOP
      SHIPS INC

              	
                )

              	 
      
	
                pursuant
      to a

              	
                )

              	 
      
	
                power
      of attorney dated

              	
                )

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

              
	 
      	 
      	
                Attorney-in-fact

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                The
      Bank

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                THE
      ROYAL BANK OF SCOTLAND plc

              	
                )

              	 
      
	
                pursuant
      to a power

              	
                )

              	 
      
	
                of
      attorney dated

              	
                )

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

              
	 
      	 
      	
                Attorney-in-fact

              
	 
      	 
      	 
      
	 
      	 
      	 
      

      

      
 

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

    

     

     

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  SIGNED by

                                  for
      and on behalf of

                                  TOP
      SHIPS INC.

                                  pursuant
      to

                                  board
      resolutions dated 25 March 2008

                                	
                                  )

                                  )

                                  )

                                  )

                                  )

                                	 
      	
                                   

                                   

                                   

                                  /s/Theodora Hitropetrou

                                  Authorized
      signatory

                                
	 
      	 
      	 
      	 
      
	
                                  /s/Eirini
      Alexandropoulou

                                  Erini Alexandropoulou

                                  Attorney-at-law

                                	 	 	 
	 
      	 
      	 
      	 
      
	
                                  SIGNED by Stephen
      Moorby

                                  the
      duly authorized signatory

                                  for
      and on behalf of

                                  THE
      ROYAL BANK OF SCOTLAND plc

                                	
                                  )

                                  )

                                  )

                                  )

                                	 
      	
                                   

                                   

                                  /s/Stephen Moorby    

                                  Authorised
      signatory

                                
	 
      	 
      	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

    

    
      
        
           

        

        
          87Unassociated Document

    EXHIBIT 4.77

    EXECUTION
VERSION

     

    Dated as
of April 24, 2008

     

    JAPAN
II SHIPPING COMPANY LIMITED,

    as
Borrower,

     

    TOP
SHIPS INC.,

    as
Guarantor,

     

    THE
BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN,

    as
Lenders,

     

    DVB
BANK AG,

    as Swap
Bank,

     

    and

     

     

    DVB
BANK AMERICA N.V.,

    as Agent
and Security Trustee

     

    _______________________________________________________

     

    LOAN
AGREEMENT

    ______________________________________________________

     

    Relating
to a Senior Secured Term Loan Facility of up to $48,000,000

     

    

     

    

     

    

     

    WATSON,
FARLEY & WILLIAMS (NEW YORK) LLP

    100 Park
Avenue

    New York,
New York 10017

     

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    INDEX

     

    
      
        
          	
                  Clause

                	
                  Page

                

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            	
                                                                    1

                                                                  	
                                                                    INTERPRETATION

                                                                  	
                                                                    1

                                                                  
	 	 	 
	
                                                                    2

                                                                  	
                                                                    FACILITY

                                                                  	
                                                                    19

                                                                  
	 	 	 
	
                                                                    3

                                                                  	
                                                                    DRAWDOWN

                                                                  	
                                                                    19

                                                                  
	 	 	 
	
                                                                    4

                                                                  	
                                                                    INTEREST

                                                                  	
                                                                    21

                                                                  
	 	 	 
	
                                                                    5

                                                                  	
                                                                    INTEREST
      PERIODS

                                                                  	
                                                                    22

                                                                  
	 	 	 
	
                                                                    6

                                                                  	
                                                                    DEFAULT
      INTEREST

                                                                  	
                                                                    23

                                                                  
	 	 	 
	
                                                                    7

                                                                  	
                                                                    REPAYMENT
      AND PREPAYMENT

                                                                  	
                                                                    24

                                                                  
	 	 	 
	
                                                                    8

                                                                  	
                                                                    CONDITIONS
      PRECEDENT

                                                                  	
                                                                    27

                                                                  
	 	 	 
	
                                                                    9

                                                                  	
                                                                    REPRESENTATIONS
      AND WARRANTIES

                                                                  	
                                                                    28

                                                                  
	 	 	 
	
                                                                    10

                                                                  	
                                                                    COVENANTS

                                                                  	
                                                                    33

                                                                  
	 	 	 
	
                                                                    11

                                                                  	
                                                                    GUARANTY

                                                                  	
                                                                    41

                                                                  
	 	 	 
	
                                                                    12

                                                                  	
                                                                    PAYMENTS
      AND CALCULATIONS

                                                                  	
                                                                    43

                                                                  
	 	 	 
	
                                                                    13

                                                                  	
                                                                    APPLICATION
      OF RECEIPTS

                                                                  	
                                                                    45

                                                                  
	 	 	 
	
                                                                    14

                                                                  	
                                                                    EVENTS
      OF DEFAULT

                                                                  	
                                                                    47

                                                                  
	 	 	 
	
                                                                    15

                                                                  	
                                                                    FEES
      AND EXPENSES

                                                                  	
                                                                    50

                                                                  
	 	 	 
	
                                                                    16

                                                                  	
                                                                    INDEMNITIES

                                                                  	
                                                                    51

                                                                  
	 	 	 
	
                                                                    17

                                                                  	
                                                                    NO
      SET-OFF OR TAX DEDUCTION

                                                                  	
                                                                    54

                                                                  
	 	 	 
	
                                                                    18

                                                                  	
                                                                    ILLEGALITY

                                                                  	
                                                                    55

                                                                  
	 	 	 
	
                                                                    19

                                                                  	
                                                                    ASSIGNMENTS
      AND PARTICIPATIONS; CHANGES IN LENDING OFFICE

                                                                  	
                                                                    58

                                                                  
	 	 	 
	
                                                                    20

                                                                  	
                                                                    VARIATIONS,
      WAIVERS, ETC.

                                                                  	
                                                                    59

                                                                  
	 	 	 
	
                                                                    21

                                                                  	
                                                                    NOTICES

                                                                  	
                                                                    60

                                                                  
	 	 	 
	
                                                                    22

                                                                  	
                                                                    SUBORDINATION

                                                                  	
                                                                    61

                                                                  
	 	 	 
	
                                                                    23

                                                                  	
                                                                    SUPPLEMENTAL

                                                                  	
                                                                    61

                                                                  
	 	 	 
	
                                                                    24

                                                                  	
                                                                    THE
      AGENT AND THE SECURITY TRUSTEE

                                                                  	
                                                                    62

                                                                  
	 	 	 
	
                                                                    25

                                                                  	
                                                                    LAW
      AND JURISDICTION

                                                                  	
                                                                    65

                                                                  
	 	 	 
	
                                                                    26

                                                                  	
                                                                    PATRIOT
      ACT

                                                                  	
                                                                    66

                                                                  
	 	 	 
	
                                                                    27

                                                                  	
                                                                    WAIVER
      OF JURY TRIAL

                                                                  	
                                                                    67

                                                                  
	 	 	 

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
              SCHEDULE
      1

            	
              INITIAL
      LENDERS AND COMMITMENTS

            
	
              SCHEDULE
      2

            	
              IRREVOCABLE
      DRAWDOWN NOTICE

            
	
              SCHEDULE
      3

            	
              CONDITION
      PRECEDENT DOCUMENTS

            

       

      

        
          
             

          

          
            i

            
              

            

          

          
             

          

        

      

       

      	
              APPENDIX
      A

            	
              FORM
      OF COMPLIANCE CERTIFICATE

            
	
              APPENDIX
      B

            	
              FORM
      OF EARNINGS ASSIGNMENT

            
	
              APPENDIX
      C

            	
              FORM
      OF INSURANCE ASSIGNMENT

            
	
              APPENDIX
      D

            	
              FORM
      OF CHARTER ASSIGNMENT

            
	
              APPENDIX
      E

            	
              FORM
      OF MANAGER’S UNDERTAKING

            
	
              APPENDIX
      F

            	
              FORM
      OF MORTGAGE

            
	
              APPENDIX
      G

            	
              FORM
      OF NOTE

            
	
              APPENDIX
      H

            	
              FORM
      OF ASSIGNMENT AND ACCEPTANCE

            

    

    

     

    

    
      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

    

    

    THIS LOAN
AGREEMENT (this “Agreement”) is made as of
April 24, 2008

     

    AMONG

     

    
      	
              (1)

            	
              JAPAN
      II SHIPPING COMPANY LIMITED, a Liberian corporation (the “Borrower”);

            

    

     

    (2)           TOP
SHIPS INC., a Marshall Islands corporation (the “Guarantor”);

     

    
      	
              (3)

            	
              THE
      BANKS AND FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
      (each, an “Initial
      Lender”);

            

    

     

    
      	
              (4)

            	
              DVB
      BANK AG, acting through its office at Friedrich-Ebert-Anlage 2-14, 60325
      Frankfurt am Main, Germany, as Swap Bank (together with its successors and
      permitted assigns, the “Swap Bank”);
      and

            

    

     

    
      	
              (5)

            	
              DVB
      BANK AMERICA N.V., with offices at Zeelandia Office Park, Kaya W.F.G.
      Mensing 14, P.O. Box 3107, Curaçao, Netherlands Antilles, as Agent
      (together with its successors and permitted assigns, the “Agent”) and Security
      Trustee (together with its successors and permitted assigns, the “Security
      Trustee”).

            

    

     

    WHEREAS, the Lenders have
agreed to make available to the Borrower on the terms and conditions set forth
herein a senior secured term loan facility in the aggregate principal amount of
up to $48,000,000 for the purpose of partially financing the purchase of the
Ship; and

     

    WHEREAS, the Borrower may
request the Swap Bank to enter into swap agreements with the Borrower on the
2002 ISDA form, as amended, to hedge the Borrower’s exposure to interest rate
fluctuations under this Agreement.

     

    IT IS AGREED as
follows:

     

    
      	
              1  

            	
              INTERPRETATION

            

    

     

    
      	
              1.1  

            	
              Definitions.  Subject
      to Clause 1.5, in this Agreement and the other Finance
      Documents:

            

    

     

    “Actual Drawdown Date” means,
in respect of the Advance of all of the Loan available under this Agreement, the
date on which that Advance is actually made;

     

    “Advance” means the advance by
the Lenders of all of the Loan available under this Agreement;

     

    “Affected Lender” has the
meaning given such term in Clause 4.5;

     

    “Affiliate” means, as to any
person, any other person that, directly or indirectly, controls, is controlled
by or is under common control with such person or is a director or officer of
such person, and for purposes of this definition, the term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) of
a person means the possession, direct or indirect, of the power to vote 50% or
more of the voting stock of such person or to direct or cause direction of the
management and policies of such person, whether through the ownership of voting
stock, by contract or otherwise;

     

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    “Agent” has the meaning given
such term in the introduction hereof;

     

    “Agreement” has the meaning
given such term in the introduction hereof;

     

    “Approved Charter” means
(a) any time charter entered into from time to time by the Borrower or any
charterer with respect to the Ship; provided that such time
charter does not have, and does not contain any extension or renewal provisions
enabling it to have, a duration of more than 13 months and is otherwise in form
and substance acceptable to the Agent; or (b) any bareboat charter entered
into from time to time by the Borrower or any charterer; provided that written consent
of the Majority Lenders is obtained prior to entering into such bareboat
charter; (c) the Initial Approved Charter; or (d) any Option B
Time Charter;

     

    “Approved Charterer” means
(a) in the case of the charterer pursuant to the Initial Approved Charter,
Armada (Singapore) Pte Ltd., or (b) in each other case, any charterer or
subcharterer of the Ship, and each other person entitled to the possession or to
direct the use of the Ship and claiming by, through or under the Borrower or
other charterer of the Ship, that shall not be an Affiliate of either Obligor
and shall be otherwise acceptable to the Agent;

     

    “Approved Flag” means Liberian
flag or such other flag acceptable to the Majority Lenders, such consent not to
be unreasonably withheld;

     

    “Approved Manager” means any of
(a) Top Tanker Management Inc., but if Top Tanker Management shall
subcontract any management services in relation to the Ship to any person, such
person shall be an Approved Technical Submanager and such subcontract shall have
been approved by the Agent; (b) V.Ships Management Limited, (c) GI
Ship Management or (d) any other manager as the may be approved from time
to time in writing by the Agent;

     

    “Approved Technical Submanager”
means any of (a) V.Ships Management Limited, (b) GI Ship Management
and (c) any other technical ship management company approved from time to
time by the Agent, such approval not to be unreasonably withheld;

     

    “Assignment and Acceptance”
means an assignment and acceptance entered into by a Lender and an assignee of
such Lender, and accepted by the Agent, in substantially the form of
Appendix H;

     

    “Availability Period” means the
period commencing on and including the Effective Date and ending on and
including May 15, 2008;

     

    “Broker” means an experienced
independent sale and purchase broker selected by the Agent and acceptable to the
Majority Lenders for the purpose of valuing the Ship, at the expense of the
Borrower, and who shall act as an expert and not as arbitrator and whose
valuation shall be conclusive and binding on all parties to this
Agreement;

     

    “Borrower” has the meaning
given such term in the introduction hereof;

     

    “Business Day” means a day on
which dealings are carried out in the London Interbank Market and that is also a
day on which commercial banks are not authorized or required to close in Athens,
Greece; Piraeus, Greece; New York, New York; Curaçao, Netherlands Antilles; or
Frankfurt, Germany;

     

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    “Charter Assignment” means an
assignment of each charter with respect to the Ship in the form set out in
Appendix D;

     

    “Classification Society” means
Bureau Veritas or such other classification society as may be approved from time
to time in writing by the Agent with the consent of the Majority Lenders, such
consent not to be unreasonably withheld;

     

    “Collateral” means all property
(including any proceeds thereof) referred to in the Finance Documents that is or
is intended to be subject to any lien in favor of the Security Trustee, for the
benefit of the Lenders and the Swap Bank, securing the obligations of the
Borrower or the Guarantor under this Agreement or any other Finance
Documents;

     

    “Commitment” means, with
respect to each Lender, the amount set forth opposite such Lender’s name on
Schedule 1 or, if such Lender has entered into an Assignment and
Acceptance, set forth for such Lender in the Register, in each case as such may
be reduced in accordance with this Agreement;

     

    “Compliance Certificate” means
the certificate executed by the Guarantor’s chief financial officer in the form
set out in Appendix A;

     

    “Confirmation” has the meaning
given such term in the Master Agreement;

     

    “Consent and Agreement” means
each consent and agreement executed and delivered by a charterer pursuant to any
Charter Assignment;

     

    “Contractual Currency” has the
meaning given such term in Clause 1.1;

     

    “Credit Parties” means the
Lenders, the Agent, the Security Trustee and the Swap Bank;

     

    “Designated Transaction” means
a Transaction which fulfills the following requirements:

     

    
      	
               
      

            	
              (a)

            	
              it
      is entered into by the Borrower and the Swap Bank pursuant to the Master
      Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              its
      purpose is to hedge the Borrower’s exposure under this Agreement to
      fluctuations in the interest rate arising from the funding of the Advance;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      notional principal amount of such Transaction, together with all other
      continuing Designated Transactions, does not and in the future (taking
      into account the scheduled amortization thereof) will not exceed the
      aggregate amount of the Loan scheduled to be outstanding from time to
      time;

            

    

     

    “Dollars” and “$” means the lawful currency
of the United States of America from time to time;

     

    “Drawdown Notice” means a
notice in the form set out in Schedule 2 hereto (or in any other form which the
Agent approves or reasonably requires);

     

    “Earnings” means all moneys
whatsoever that are now, or later become, payable (actually or contingently) to
the Borrower and that arise out of the use or operation of the Ship,
including:

     

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    
       

      
        	
                 
      

              	
                (a)

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

              

      

       

    

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    “Earnings Assignment” means an
assignment of the Earnings and any Requisition Compensation in the form set out
in Appendix B;

     

    “Effective Date” means the date
of this Agreement;

     

    “Eligible Assignee”
means:

     

    
      	
               
      

            	
              (a)

            	
              any
      commercial bank organized under the laws of the United States, or any
      State thereof, and having total assets in excess of
      $1,000,000,000;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      commercial bank organized under the laws of any other country that is a
      member of the OECD or has concluded special lending arrangements with the
      International Monetary Fund Associated with its General Arrangements to
      Borrow, or a political subdivision of any such country, and having total
      assets in excess of $1,000,000,000, so long as such bank is acting through
      a branch or agency located in the United States or in the country in which
      it is organized or another country that is described in this
      paragraph (b);

            

    

     

    (c)           the
central bank of any country that is a member of the OECD;

     

    
      	
               
      

            	
              (d)

            	
              any
      finance company, insurance company or other financial institution or fund
      (whether a corporation, partnership, trust or other entity) that (i) is
      not affiliated with the Borrower, (ii) is engaged in making, purchasing or
      otherwise investing in commercial loans in the ordinary course of its
      business and (iii) has total assets in excess of $1,000,000,000;
      and

            

    

     

    
      	
               
      

            	
              (e)

            	
              any
      other person (other than an Affiliate of the Borrower or the Guarantor)
      approved by the Agent and the Borrower and having assets in excess of
      $1,000,000,000, such approval not to be unreasonably
    withheld;

            

    

     

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

     

    “Environmental Permit” means
any permit, approval, identification number, license or other authorization
required under any Environmental Law;

     

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

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

     

    “Estate” has the meaning given
such term in Clause 24.1;

     

    “Event of Default” means any of
the events or circumstances described in Clause 14.1;

     

    “Expected Drawdown Date” means,
in respect of the Advance, the date requested by the Borrower in the Drawdown
Notice for such Advance to be made, but in no event later than May 15,
2008;

     

    “Fair Market Value” means the
market value of the Ship determined by the Broker, with or without a physical
inspection of the Ship, on the basis of a sale for prompt delivery, for cash, at
arm’s length, on normal commercial terms as between a willing seller and a
willing buyer and free of any charter or other contract of employment and with
no value to be given to any pooling arrangements;

     

    “Finance Document” means each
of:

     

    (a)           this
Agreement;

     

    (b)           the
Notes;

     

    (c)           the
Master Agreement;

     

    (d)           the
Manager’s Undertakings;

     

    (e)           the
Consents and Agreements; and

     

    (f)           the
Security Documents;

     

    “Financial Indebtedness” means,
in relation to any person, a liability of such person:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              under
      any bond, note or other security issued by such
  person;

            

    

     

    
      	
               
      

            	
              (c)

            	
              under
      any acceptance credit, guarantee or letter of credit facility made
      available to such person;

            

    

     

    
      	
               
      

            	
              (d)

            	
              under
      a financial lease, a deferred purchase consideration arrangement or any
      other agreement having the commercial effect of a borrowing or raising of
      money by such person;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (f)

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

            

    

     

    “First Repayment Date” means
the date which is three months after the Actual Drawdown Date;

     

    “Group” means, together, the
Guarantor and its subsidiaries and “member of the Group” means any
of them;

     

    “Guaranteed Obligations” has
the meaning given such term in Clause 11.1;

     

    “Guarantor” has the meaning
given such term in the introduction hereof;

     

    “Guaranty” has the meaning
given such term in Clause 11.1;

     

    “Initial Aggregate Commitment”
has the meaning given such term in Clause 2.1;

     

    “Initial Approved Charter”
means the time charter party entered or to be entered into between the Borrower
and Armada (Singapore) Pte Ltd. with respect to the Vessel as described in the
recap dated March 14, 2008, having a term between eleven and fourteen
months and otherwise in form and substance acceptable to the Agent;

     

    “Initial Lender” has the
meaning given such term in the introduction hereof;

     

    “Insurances”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    “Insurance Assignment” means an
assignment of the Insurances in the form set out in Appendix C;

     

    “Interest Period” means a
period determined in accordance with Clause 5;

     

    “ISM Code” means in relation to
its application to the Borrower, the Approved Manager (technical), any Approved
Technical Submanager, the Ship and its operation:

     

    
      	
               
      

            	
              (a)

            	
              the
      International Safety Management Code (including the guidelines on its
      implementation) adopted by the International Maritime Organization (“IMO”) as
      Resolution A.741(18) and Resolution A.913(22) (superseding
      Resolution A.788(19)) (and the terms “safety management
      system”, “Safety
      Management Certificate” and “Document of Compliance”
      have the same meanings as are given to them in the ISM Code);
      and

            

    

     

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (b)

            	
              all
      further resolutions, circulars, codes, guidelines, regulations and
      recommendations which are now or in the future issued by or on behalf of
      the IMO or any other entity with responsibility for implementing the ISM
      Code;

            

    

     

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

     

    “ISM Code Documentation”
includes:

     

    
      	
               
      

            	
              (a)

            	
              the
      Document of Compliance and Safety Management Certificate issued pursuant
      to the ISM Code in relation to the Ship within the periods specified by
      the ISM Code;

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      other documents and data that are relevant to the safety management system
      and its implementation and verification that the Agent may require;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              all
      other documents that are prepared or that are otherwise relevant to
      establish and maintain the Ship’s compliance or the compliance of the
      Borrower, the Approved Manager (technical) or any Approved Technical
      Submanager with the ISM Code that the Agent may
  require;

            

    

     

    “ISM Responsible Person”
means:

     

    
      	
               
      

            	
              (a)

            	
              each
      and every person who has assumed responsibility for the operation of the
      Ship and has agreed to take over or is required to assume responsibility
      for the performance or observance of the duties and responsibilities
      imposed by the ISM Code; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              each
      and every person ashore who is a ‘designated person’ for the purposes of
      the ISM Code with direct access to the highest level of management of the
      Ship’s owner or operator and who, in that capacity, has under the ISM Code
      responsibility and authority which
includes:

            

    

     

    
      	
               
      

            	
              (i)

            	
              monitoring
      the safety and pollution prevention aspects of the operation of the Ship;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              ensuring
      that adequate resources and shore based support are supplied, as required,
      in each case, under the ISM Code;

            

    

     

    “ISPS Code” means, in relation
to its application to the Borrower, the Approved Manager (technical), any
Approved Technical Submanager, the Ship and its operation, the International
Ship and Port Facility Security Code constituted pursuant to
resolution A.924(22) of the IMO adopted by a Diplomatic Conference of the
IMO on Maritime Security on 13 December 2002 and now set out in
Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended);

     

    “Junior Amending and Restating
Agreement” means the Amending and Restating Agreement, dated
December 21, 2007, among (i) Jeke Shipping Company Limited, Noir
Shipping S.A., Amalfi Shipping Company Limited, as joint and several borrowers,
(ii) Top Ships Inc. and the Borrower, as security parties, (ii) the
lenders defined therein, and (iv) DVB Bank America N.V. as agent and Junior
Security Trustee.

     

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    “Junior Assignment” means a
second priority general assignment in form and substance acceptable to the Agent
and to be executed and delivered by the Borrower in favor of the Junior Security
Trustee to grant to the Junior Security Trustee, among other things, a
second-priority security interest in the earnings and insurances related to the
Ship as security for certain obligations related to the Junior Loan
Agreement;

     

    “Junior Guarantee” means the
Guarantee, dated December 21, 2007, between the Borrower and the Junior
Security Trustee;

     

    “Junior Loan Agreement” means
the Loan Agreement, dated November 8, 2007, as amended by letter agreements
dated November 9, 2007 and November 29, 2007, amended and restated
pursuant to the Junior Amending and Restating Agreement, among (i) Jeke
Shipping Company Limited, Noir Shipping Company S.A. and Amalfi Shipping Company
Limited, as joint and several borrowers, (ii) the lenders defined therein,
and (iii) DVB Bank America N.V. as agent and security trustee, pursuant to
which the lenders defined therein agreed to make available to Jeke Shipping
Company Limited, Noir Shipping Company S.A. and Amalfi Shipping Company Limited
a secured bridge loan facility in the principal amount of up to $35,000,000 for
the purpose of, among other things, assisting them with the financing the M/V’s
OCEAN SPIRIT and SALMAS;

     

    “Junior Loan Document” means
each of the Junior Amending and Restating Agreement, the Junior Guarantee and
the Junior Security Documents;

     

    “Junior MOA Assignment” means
the MOA Assignment, dated November 29, 2007, between the Borrower and the
Junior Security Trustee;

     

    “Junior Mortgage” means a
second preferred Liberian mortgage in form and substance satisfactory to the
Agent to be granted by the Borrower to the Junior Security Trustee on the Ship
as security for certain obligations related to the Junior Loan
Agreement;

     

    “Junior Security Trustee” means
the “Security Trustee” as such term is defined in the Junior Loan
Agreement;

     

    “Junior Security Document”
means each of the Junior Assignment, the Junior MOA Assignment and the Junior
Mortgage;

     

    “Lender” means each Initial
Lender and each person that shall become a party hereto pursuant to
Clause 19.2;

     

    “Lending Office” means, with
respect to any Lender, the office of such Lender specified as its “Lending
Office” under its name on Schedule 1 or in the Assignment and Acceptance
pursuant to which it shall have become a Lender, or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the
Agent;

     

    “LIBOR” means, for an Interest
Period:

     

    
      	
               
      

            	
              (a)

            	
              the
      rate per annum equal to the offered quotation for deposits in Dollars for
      a period equal to, or as near as possible equal to, the relevant Interest
      Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00 a.m.
      (London time) on the Quotation Date for that Interest Period (and, for the
      purposes of this Agreement, “BBA Page
  

            

    

     

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

     

    
       

      
        	
                 
      

              	
                 

              	
                LIBOR
      01” means that
      Reuters’ page or such other page as may replace that page on that service
      for the purpose of displaying rates comparable to that rate or on such
      other service as may be nominated by the British Bankers’ Association as
      the information vendor for the purpose of displaying British Bankers’
      Association Interest Settlement Rates for Dollars) provided
      that should there be a discrepancy between the rate
      appearing on BBA Page LIBOR 01 mentioned above and the actual rate at
      which deposits in Dollars are offered by leading banks in the London
      Interbank Market the “actual” rate (determined in its absolute discretion,
      acting reasonably) available to the Agent shall be the rate used in
      determining LIBOR;
      or

              

      

       

    

     

    
      	
               
      

            	
              (b)

            	
              if
      no rate is quoted on BBA Page LIBOR 01, the rate per annum determined by
      the Agent to be the arithmetic mean (rounded upwards, if necessary, to the
      nearest one-sixteenth of one percent) of the rates per annum notified to
      the Agent by each Reference Bank as the rate at which deposits in Dollars
      are offered to that Reference Bank by leading banks in the London
      Interbank Market at that Reference Bank’s request at or about 11:00 a.m.
      (London time) on the Quotation Date for that Interest Period for a period
      equal to that Interest Period and for delivery on the first Business Day
      of it;

            

    

     

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

     

    “Major Casualty” means any
casualty to the Ship in respect of which the claim or the aggregate of the
claims against all insurers, before adjustment for any relevant franchise or
deductible, exceeds $750,000 or the equivalent in any other
currency;

     

    “Majority Lenders” means, at
any time, Lenders holding at least 67% of the then aggregate outstanding
principal amount of the Loan or, if no such principal amount is then
outstanding, Lenders having at least 67% of the aggregate amount of the
Commitments then effect;

     

    “Manager’s Undertaking” means
the letter executed or to be executed by the Approved Manager or the Approved
Technical Submanager, if any, of the Ship, in each case in the form set out in
Appendix E;

     

    “Margin” means 1.75 percent per
annum for the period commencing on the date hereof and ending on, but not
including, the first anniversary of the Actual Drawdown Date, and 1.50 percent
per annum thereafter;

     

    “Margin Stock” has the meaning
specified in Regulation U of the Board of Governors of the Federal Reserve
System and any successor regulations thereto as in effect from time to
time;

     

    “Master Agreement” means the
Master Agreement (on the 2002 ISDA Master Agreement form) between the Borrower
and the Swap Bank, pursuant to which the Borrower may enter into certain
Transactions pursuant to separate Confirmations providing for, among other
things, the payment of certain amounts by the Borrower to the Swap Bank to hedge
the Borrower’s exposure to interest rate fluctuations under this
Agreement;

     

    “Maturity Date” means the fifth
anniversary of the Actual Drawdown Date;

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    “Memorandum of Agreement” means
the Memorandum of Agreement, dated August 7, 2007, and Addendum No. 1
thereto dated August 14, 2007, Addendum No. 2 thereto dated
January 30, 2008, and Addendum No. 3 thereto, in each case among
Nisshin Shipping Co., Ltd. and Ratu Shipping Co., S.A., as sellers, and the
Borrower, as buyer, relating to the Ship;

     

    “Mortgage” means the first
preferred mortgage on the Ship in the form set out in
Appendix F;

     

    “Negotiation Period” has the
meaning given such term in Clause 4.7;

     

    “Note” means, if requested by a
Lender, a promissory note of the Borrower, substantially in the form of
Appendix G, payable to the order of such Lender and evidencing the
aggregate indebtedness of the Borrower to such Lender under this
Agreement;

     

    “Obligor” means each of the
Borrower and the Guarantors;

     

    “OFAC” has the meaning given
such term in Clause 9.16;

     

    “Option B” has the meaning
given such term in Clause 7.1;

     

    “Option B Time Charter” has the meaning given
such term in Clause 7.1;

     

    “Outstanding Indebtedness”
means the aggregate of all sums of money at any time and from time to time owing
by the Borrower to the Lenders under or pursuant to this Agreement and the other
Finance Documents (or any of them), including any and all amounts owed under
Clause 15 of this Agreement;

     

    “PATRIOT Act” has the meaning
given such term in Clause 8.1;

     

    “Payment Currency” has the
meaning given such term in Clause 16.5;

     

    “Pertinent Jurisdiction” means,
in relation to a company:

     

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

     

    
      	
               
      

            	
              (b)

            	
              a
      country in which the company’s central management and control is or has
      recently been exercised;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              a
      country the courts of which have jurisdiction to make a winding-up,
      administration or similar order in relation to the company or would have
      such jurisdiction if their assistance were requested by the courts of a
      country referred to in paragraph (b) or (c) of this definition;
      and

            

    

     

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (f)

            	
              any
      political subdivision of any of the
foregoing;

            

    

     

    “Potential Event of Default”
means an event or circumstance that, with the giving of any notice, the lapse of
time, a determination of the Majority Lenders or the satisfaction of any other
condition, would constitute an Event of Default;

     

    “Principal Subsidiary” means,
in respect of the Borrower and the Guarantor, a subsidiary of the Borrower or
the Guarantor, as the case may be, whose total assets represent not less than
10% of the consolidated total assets of the Borrower or the Guarantor, as the
case may be, as calculated by reference to the most recent audited annual
financial statements of each of such subsidiary and the Borrower or the
Guarantor, as the case may be;

     

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

     

    “Ratable Portion” means, as to
any Lender at any time, a fraction (expressed as a percentage) the numerator of
which is the Commitment of such Lender at such time and the denominator of which
is the sum of all Commitments at such time; provided that if the Ratable
Portion of any Lender is to be determined after the total Commitment has been
terminated, then the percentages of the Lenders shall be determined immediately
prior (and without giving effect) to such termination;

     

    “Reference Banks” means, for
purposes of LIBOR, the reference banks chosen from time to time by the British
Bankers’ Association;

     

    “Register” has the meaning
given such term in Clause 19.2(c);

     

    “Relevant Interbank Market”
means the London interbank market;

     

    “Relevant Ships” has the
meaning given such term in the definition of “Total Market Value Adjusted
Assets” in Clause 1.2;

     

    “Repayment Date” means a date
on which a repayment is required to be made under Clause 7 or
10.3;

     

    “Required Fair Market Value”
means, at any time, the sum of:

     

    (a)           the
unpaid principal amount of the Loan outstanding at such time; and

     

    
      	
               
      

            	
              (b)

            	
              the
      amount that would be payable by the Borrower pursuant to
      Section 6(e)(i) of the Master Agreement if an Early Termination Date
      (as such term is defined in the Master Agreement) were deemed to have
      occurred in relation to all Designated Transactions existing at such time
      following an Event of Default by the
Borrower;

            

    

     

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

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

            

    

     

    “Screen Rate” means, in
relation to LIBOR, the British Bankers’ Association Interest Settlement Rate for
the relevant currency and period displayed on the appropriate page of the
Reuters screen; provided
that, if such page is
replaced or service ceases to be available, the Agent may specify another page
or service displaying the appropriate rate after consultation with the Borrower
and the Majority Lenders;

     

    “Secured Liabilities” means all
liabilities which the Obligors or either of them have or shall have, at the date
of this Agreement or at any later time or times, under or by virtue of the
Finance Documents or any judgment relating to the Finance Documents, and for
this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, that is or shall be effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other procedure
under the insolvency laws of any country;

     

    “Security Trustee” has the
meaning given such term in the introduction hereof;

     

    “Security Documents”
means:

     

    (a)           the
Mortgage;

     

    (b)           the
Earnings Assignment;

     

    (c)           the
Charter Assignment;

     

    (d)           the
Insurance Assignment; and

     

    
      	
               
      

            	
              (e)

            	
              all
      other documents (whether creating a Security Interest or not) that are
      executed at any time by either Obligor or any other person as security
      for, or to establish any form of subordination or priorities arrangement
      in relation to, any amount payable to or for the benefit of a Lender, the
      Swap Bank, the Agent or the Security Trustee under this Agreement or any
      other Finance Document;

            

    

     

    “Security Interest”
means:

     

    
      	
               
      

            	
              (a)

            	
              a
      mortgage, charge or pledge, any maritime or other lien or any other
      security interest of any kind;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      rights of the plaintiff under an action in rem in which the
      vessel concerned has been arrested or a writ has been issued or similar
      steps taken; and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              “Security Period” means
      the period commencing on the date of this Agreement and ending on the date
      on which the Agent notifies the Borrower
that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              all
      amounts that have become due for payment by the Borrower under the Finance
      Documents have been paid;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              no
      Obligor has any future or contingent liability under Clause 16 or 17
      or any other provision of this Agreement or any other Finance Document;
      and

            

    

     

    
      	
               
      

            	
              (d)

            	
              no
      Credit Party believes that there is a significant risk that any payment or
      transaction under a Finance Document would be set aside, or would have to
      be reversed or adjusted, in any present or possible future bankruptcy of
      an Obligor or in any present or possible future proceeding relating to a
      Finance Document or any asset covered (or previously covered) by a
      Security Interest created by a Finance
Document;

            

    

     

    “Ship” means M/V ASTRALE (ex
BERGEN TRADER), a Liberian flag 75,933 dwt panamax size bulkcarrier, built in
2000 at Kanasashi Co. Ltd. shipyard in Japan, with Official Number 13718 and IMO
Number 9215749;

     

    “Swap Bank” has the meaning
given such term in the introduction hereof;

     

    “Total Loss”
means:

     

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

     

    
      	
               
      

            	
              (b)

            	
              any
      expropriation, confiscation, requisition or acquisition of the Ship,
      whether for full consideration, a consideration less than her proper
      value, a nominal consideration or without any consideration, which is
      effected by any government or official authority or by any person or
      persons claiming to be or to represent a government or official authority,
      excluding a requisition for hire for a fixed period not exceeding one year
      without any right to an extension;

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      final and non-appealable condemnation of the Ship by any tribunal or by
      any person or persons claiming to be a tribunal;
  or

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      arrest, capture, seizure or detention of the Ship (including any hijacking
      or theft) unless she is within 60 days redelivered to the full control of
      the Borrower;

            

    

     

    “Total Loss Date”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

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

     

    
      	
               
      

            	
              (c)

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

            

    

     

    “Transaction” has the meaning
given such term in the Master Agreement; and

     

    “UCC” means the Uniform
Commercial Code as in effect, from time to time, in the State of New York; provided that, if perfection
or the effect of perfection or non perfection or the priority of any security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, “UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.

     

    
      	
              1.2  

            	
              Additional Financial
      Terms.  Subject to Clause 1.5, in this Agreement and
      the other Finance Documents:

            

    

     

    “Applicable Accounting
Principles” means accounting principles, bases and policies generally
adopted and accepted in the United States of America consistently
applied;

     

    “Book Equity” means the
aggregate of the amounts paid-up or credited as paid-up on the Guarantor’s
issued share capital and the amount of the consolidated capital and revenue
reserves of the Group (including any share premium account, capital redemption
reserve fund and any credit balance on the consolidated profit and loss account
of the Group) all as shown by the latest audited consolidated balance sheet and
profit and loss account of the Group delivered under this Agreement but
after:

     

    (a)           deducting
any debit balance on such consolidated profit and loss account;

     

    
      	
               
      

            	
              (b)

            	
              deducting
      any amount shown in such consolidated balance sheet in respect of goodwill
      (including goodwill arising on consolidation) and other intangible
      assets;

            

    

     

    
      	
               
      

            	
              (c)

            	
              deducting
      (so far as not otherwise excluded as attributable to minority interests) a
      sum equal to the aggregate of the amount of which the book value of any
      fixed assets of any member of the Group has been written up after December
      31, 2005 (or, in the case of a company becoming a subsidiary after that
      date, the date on which that company became a subsidiary) by way of
      revaluation and, for the purposes of this paragraph (c) any increase
      in the book value of any fixed assets resulting from its transfer by one
      member of the Group to another member of the Group shall be deemed to
      result from a writing up of its book value by way of
      revaluation;

            

    

     

    
      	
               
      

            	
              (d)

            	
              excluding
      amounts set aside for taxation as at the date of such balance sheet and
      making such adjustments as may be appropriate in respect of any
      significant additional taxation expected to result from transactions
      carried out by any member of the Group after such date and not reflected
      in that balance sheet;

            

    

     

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (e)

            	
              deducting
      all amounts attributable to minority interests in
      subsidiaries;

            

    

     

    
      	
               
      

            	
              (f)

            	
              making
      such adjustments as may be appropriate in respect of any variation in the
      amount of such paid up spare capital or any such reserves after the date
      of the relevant balance sheet (but so that no such adjustment shall be
      made in respect of any variation in profit and loss account except to the
      extent of any profit or loss, calculated on a cumulative basis, recorded
      in the consolidated profit and loss account of the Group delivered to the
      Agent before the date of this Agreement, or under Clause 10.1(f) in
      respect of any subsequent period);

            

    

     

    
      	
               
      

            	
              (g)

            	
              making
      such adjustments as may be appropriate in respect of any distribution
      declared, recommended or made by any member of the Group (otherwise than
      attributable directly or indirectly to the Guarantor) out of profits
      earned up to and including the date of the latest audited balance sheet of
      that member of the Group to the extent that such distribution is not
      provided for in that balance sheet;

            

    

     

    
      	
               
      

            	
              (h)

            	
              making
      such adjustments as may be appropriate in respect of any variation in the
      interests of the Guarantor in its subsidiaries since the date of the
      latest published audited consolidated balance sheet of the Group;
      and

            

    

     

    
      	
               
      

            	
              (i)

            	
              if
      the calculation is required for the purpose of or in connection with a
      transaction under or in connection with when any company is to become or
      cease to be a subsidiary of the Guarantor, making all such adjustments as
      would be appropriate if that transaction has been carried into
      effect;

            

    

     

    “Finance Lease” means a lease
treated as a finance lease pursuant to the Applicable Accounting
Principles;

     

    “Net Asset Value” means, at any
relevant time, the amount in Dollars resulting after deducting the Total Debt
from the Total Market Value Adjusted Assets, in either case at such
time;

     

    “Total Debt” means the
aggregate principal amount (including any fixed or minimum premium payable on
final repayment) of:

     

    (a)           moneys
borrowed or raised by the Guarantor and its subsidiaries;

     

    
      	
               
      

            	
              (b)

            	
              bonds,
      notes, loan stock, debentures, commercial paper or other debt securities
      issued by the Guarantor or any of its subsidiaries not for the time being
      beneficially owned by the Guarantor or any of its
      subsidiaries;

            

    

     

    
      	
               
      

            	
              (c)

            	
              sums
      outstanding under acceptances by the Guarantor or any of its subsidiaries
      or by any bank or acceptable house under acceptance credits opened on
      behalf of the Guarantor or any
subsidiary;

            

    

     

    
      	
               
      

            	
              (d)

            	
              deferred
      indebtedness of the Guarantor or any of its subsidiaries for payment of
      the acquisition or construction price for assets or services acquired or
      constructed;

            

    

     

    (e)           rental
payments under Finance Leases;

     

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    (f)           receivables
sold or discounted with a right of recourse to the Guarantor or any of its
subsidiaries;

     

    
      	
               
      

            	
              (g)

            	
              the
      nominal amount of any issued and paid up share capital (other than equity
      share capital) of any subsidiary not beneficially owned by the Guarantor
      or another subsidiary;

            

    

     

    (h)           preference
share capital redeemable prior to the last day of the Security
Period;

     

    
      	
               
      

            	
              (i)

            	
              indebtedness
      secured by any Security Interest over all or any part of the undertaking,
      property, assets, rights or revenues of the Guarantor or any of its
      subsidiaries irrespective of whether or not such indebtedness is supported
      by a personal covenant on the part of the Guarantor or any of its
      subsidiaries;

            

    

     

    
      	
               
      

            	
              (j)

            	
              indebtedness
      incurred in respect of swaps, forward exchange contracts, futures or other
      derivatives;

            

    

     

    
      	
               
      

            	
              (k)

            	
              any
      other liability arising from a transaction having the commercial effect of
      a borrowing or the raising of money;
and

            

    

     

    
      	
               
      

            	
              (l)

            	
              obligations
      under guarantees in respect of the obligations of any other person which,
      if such person were the Guarantor or a subsidiary would fall within any of
      paragraphs (a) through (k) above,
inclusive;

            

    

     

    provided that, (i) moneys
owing by the Guarantor to a subsidiary or by a subsidiary to the Guarantor or to
another subsidiary shall not be taken into account and (ii) the principal amount
of Total Debt deemed to be outstanding in relation to Finance Leases or hire
purchase agreements shall be the present value of the minimum lease or hire
payments discounted at the interest rate implicit in the relevant lease or hire
purchase agreement; and

     

    “Total Market Value Adjusted
Assets” means the aggregate of:

     

    
      	
               
      

            	
              (a)

            	
              the
      value (less depreciation computed in accordance with generally accepted
      international accounting principles consistently applied) on a
      consolidated basis of all tangible fixed assets of the Group, including
      long-term cash receivables (seller’s credit), as stated in the relevant
      consolidated financial statements of the Group, but excluding any ships at
      the relevant time owned by members of the Group which, for the purposes of
      such consolidated financial statements, are included in the consolidated
      tangible fixed assets of the Group (the “Relevant Ships”);
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      aggregate of the market value of the Relevant Ships, as such market value
      shall have been most recently determined (as of the date of the relevant
      calculation) pursuant to Clause 10.1(v) by means of valuations
      obtained by the Agent in accordance therewith (and not the value of the
      Relevant Ships as stated in the relevant consolidated financial statements
      of the Group).

            

    

     

    All the
terms defined in this Clause 1.2 and used in this Agreement are to be
determined on a consolidated basis in respect of the Group and (except as items
are expressly included or excluded in the relevant definition or clause) are
used and shall be construed in accordance 

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    
      with
Applicable Accounting Principles and as determined from the latest consolidated
financial statements of the Group delivered to the Agent pursuant to
Clause 10.1(f).

    

     

    
      	
              1.3  

            	
              Construction of Certain
      Terms.  In this Agreement and the other Finance
      Documents:

            

    

     

    “approved” means, unless the
context otherwise requires, approved in writing by the Agent acting upon the
instructions of the Majority Lenders;

     

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

     

    “company” includes any
corporation, limited liability company, partnership, joint venture,
unincorporated association, joint stock company and trust;

     

    “consent” includes an
authorization, consent, approval, resolution, license, exemption, filing,
registration, notarization and legalization;

     

    “contingent liability” means a
liability that is not certain to arise or the amount of which remains
unascertained;

     

    “document” includes a deed;
also a letter, fax or telex;

     

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

     

    “law” includes any form of
delegated legislation, any order or decree, any treaty or international
convention and any regulation or resolution of the United States of America, any
state thereof, the Council of the European Union, the European Commission, the
United Nations or its Security Council or any other Pertinent
Jurisdiction;

     

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

     

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

     

    “months” shall be construed in
accordance with Clause 1.4;

     

    “parent company” has the
meaning given such term in Clause 1.5;

     

    “person” includes natural
persons, any company; any state, political sub-division of a state and local or
municipal authority; and any international organization;

     

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

     

    “subsidiary” has the meaning
given such term in Clause 1.5;

     

    

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

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

     

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

     

    
      	
              1.4  

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

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    and
“month” and “monthly” shall be construed
accordingly.

     

    
      	
              1.5  

            	
              Meaning of
      “subsidiary”.  A company (S) is a subsidiary of another
      company (P) (the “parent
      company”) if:

            

    

     

    
      	
               
      

            	
              (a)

            	
              a
      majority of the issued equity in S (or a majority of the issued equity in
      S that carries unlimited rights to capital and income distributions) is
      directly owned by P or is indirectly attributable to P;
  or

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

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

     

    
      	
              1.6  

            	
              General
      Interpretation.

            

    

     

    
      	
              (a)           
      

            	
              In
      this Agreement and the other Finance
Documents:

            

    

     

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

    

    
      	 	
              (i)  

            	
              references
      to, or to a provision of, a Finance Document or any other document are
      references to it as amended, restated or otherwise modified, whether
      before the date of this Agreement or otherwise, except that any reference
      to, or to a provision of, any Junior Loan Document shall include such
      Junior Loan Document or provision, as the case may be, as amended,
      restated or otherwise modified, but only with the prior written consent of
      the Agent;

            
	 	 	 
	 	
              (ii)  

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

            	references
      to “including” shall mean including without limiting the generality of any
      description preceding such term;
	 	 	 
	 	
              (iv) 

            	

              any
      reference in any Finance Document to a clause, sub-clause, paragraph,
      schedule, exhibit, annex or appendix shall be construed to mean a clause,
      sub-clause or paragraph thereof, or a schedule, exhibit, annex or appendix
      thereto, respectively;

            
	 	 	 
	 	
              (v)

            	

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

            
	 	 	 
	 	
              (vi) 

            	

              Clauses 1.1
      through 1.5 and this paragraph (a) apply unless the contrary
      intention appears;

            
	 	 	 

    

     

    
      	
              (b)        
        

            	
              References
      in Clause 1.1 to a document being in the form of a particular
      appendix, exhibit, schedule or annex include references to that form with
      any modifications to that form that the Agent shall approve or reasonably
      require; and

            

    

     

    
      	
              (c)        
        

            	
              The
      table of contents and the headings of the clauses, sub-clauses,
      paragraphs, schedules, exhibits, annexes or appendices of this Agreement
      or any other Finance Document shall not affect the interpretation of this
      Agreement or any other Finance
Document.

            

    

     

    
      	
              2  

            	
              FACILITY

            

    

     

    
      	
              2.1  

            	
              Amount of
      Facility.  Subject to the other provisions of this
      Agreement, the Lenders severally agree to make available to the Borrower a
      loan facility in the aggregate principal amount of up to $48,000,000 (the
      “Initial Aggregate
      Commitment”).

            

    

     

    
      	
              2.2  

            	
              Purpose of
      Loan.  The Borrower undertakes to use the Loan only for
      the purposes stated in the recitals to this Agreement and in accordance
      with Clause 3.2(b).

            

    

     

    
      	
              3  

            	
              DRAWDOWN

            

    

     

    
      	
              3.1  

            	
              Request for the
      Advance.  Subject to the following conditions, the
      Borrower may request the Advance by delivering to the Agent a completed
      Drawdown Notice in respect of the Advance not later than 11:00 a.m. (New
      York time) three Business Days prior to the

            

    

     

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

     

    
       

      
         

        
          	
                   

                	
                  Expected
      Drawdown Date thereof.  The Agent shall promptly notify the
      Lenders that it has received the Drawdown Notice and shall inform each
      Lender of:

                

        

         

      

      
        	
                (a)        
        

              	
                

                  the
      amount of the requested Advance and the Expected Drawdown Date
      thereof;

                

              

      

       

    

    
      	
              (b)           

            	
              the
      amount of each Lender’s Ratable Portion of the Advance;
  and

            

    

     

    
      	
              (c)           

            	
              the
      duration of the first Interest Period applicable to the
      Advance.

            

    

     

    
      	
              3.2  

            	
              Conditions to
      Availability.  The conditions referred to in
      Clause 3.1 are that:

            

    

     

    
      	
              (a)           

            	
              the
      Expected Drawdown Date shall be a Business Day during the Availability
      Period;

            

    

     

    
      	
              (b)           

            	
              the
      Advance shall be applied as payment for the acquisition of the Ship by the
      Borrower that shall not then own the Ship and shall not (i) exceed
      the purchase price of the Ship as stated in the Memorandum of Agreement
      for the Ship or (ii) exceed the lesser of the Initial Aggregate Commitment
      and the sum of all Commitments;

            

    

     

    
      	
              (c)           

            	
              there
      shall be no more than one Advance;
and

            

    

     

    
      	
              (d)           

            	
              the
      applicable conditions precedent stated in Clause 8 shall have been
      satisfied or waived as provided
therein.

            

    

     

    
      	
              3.3 

            	
              Drawdown Notice
      Irrevocable.  The Drawdown Notice must be signed by an
      officer or duly authorized attorney-in-fact of the Borrower; and once
      served, the Drawdown Notice cannot be revoked without the prior consent of
      the Agent, acting with the authority of the Majority
    Lenders.

            

    

     

    
      	
              3.4 

            	
              Disbursement of
      Advance.  Subject to the provisions of this
      Agreement:

            

    

     

    
      	
              (a)           

            	
              Each
      Lender shall before 11:00 a.m. (New York City time) make its Ratable
      Portion of the Advance available to the Agent, for the account of the
      Borrower, on and with the value date of the Expected Drawdown Date for the
      Advance.  After the Agent’s receipt of such funds and upon
      fulfillment or waiver of the applicable conditions set forth in
      Clause 8, the Agent shall make such funds available to the Borrower
      by paying such funds to such account or accounts that the Borrower
      specifies in the Drawdown Notice.  The payment by the Agent
      under this Clause 3.4 to such account or accounts shall constitute
      the making of the Advance to the Borrower and the Borrower shall thereupon
      become indebted, as principal and direct obligor, to each Lender in an
      amount equal to such Lender’s Ratable Portion of the
    Advance.

            

    

     

    
      	
              (b)           

            	
              Unless
      the Agent shall have received notice from a Lender prior to the Expected
      Drawdown Date that such Lender will not make available to the Agent such
      Lender’s Ratable Portion of the Advance, the Agent may assume, or at its
      option request confirmation from such Lender, that such Lender has made
      its Ratable Portion available to the Agent on such date in accordance with
      Clause 3.4(a) and the Agent may, in reliance upon such assumption or
      confirmation (as the case may be), make available to the Borrower on such
      date a corresponding amount.  If and to the extent that such
      Lender shall not have so made such Ratable Portion available to the Agent,
      such Lender and the Borrower (but without duplication) severally agree to
      repay to 

            

    

     

    

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

     

     

    
       

      
        	
                           

              	
                the
      Agent forthwith on demand such corresponding amount, together with
      interest thereon, for each day from the date such amount is made available
      to the Borrower by the Agent until the date such amount is repaid to the
      Agent, at the LIBOR rate for overnight
      or weekend deposits.  If such Lender shall pay to the Agent such
      corresponding amount, such amount so paid shall constitute such Lender’s
      Ratable Portion of the Advance for purposes of this
      Agreement.  Nothing in this Clause 3.4(b) shall be deemed
      to relieve any Lender of its obligation to make the Advance to the extent
      provided in this Agreement.

              

      

       

    

    
      	
              (c)           

            	
              In
      the event that the Borrower is required to repay all or a portion of the
      Advance pursuant to Clause 3.4(b), as between the Borrower and the
      defaulting Lender, the liability for any breakage costs as described in
      Clause 16.2 shall be borne by the defaulting Lender, provided that if the
      defaulting Lender has not paid any such breakage costs upon demand by the
      Agent therefor, the Borrower shall pay such breakage costs upon demand by
      the Agent and the Borrower shall be entitled to recover from the
      defaulting Lender any such payment for breakage costs made by the
      Borrower.

            

    

     

    
      	
              4  

            	
              INTEREST

            

    

     

    
      	
              4.1  

            	
              Payment of Normal
      Interest.  Subject to the provisions of this Agreement,
      interest on the Advance or any part thereof in respect of each Interest
      Period shall be paid by the Borrower on the last day of that Interest
      Period.

            

    

     

    
      	
              4.2  

            	
              Normal Rate of
      Interest.  Subject to the provisions of this Agreement,
      the rate of interest on the Advance or any part thereof in respect of an
      Interest Period shall be the sum of the Margin and LIBOR for that Interest
      Period.

            

    

     

    
      	
              4.3  

            	
              Payment of Accrued
      Interest.  Accrued interest shall be paid on the last day
      of each month and on the last day of each Interest
  Period.

            

    

     

    
      	
              4.4  

            	
              Notification of Interest
      Rate.  The Agent shall notify the Borrower and each
      Lender of the rate of interest as soon as it is
  determined.

            

    

     

    
      	
              4.5  

            	
              Notification of Market
      Disruption.  The Agent shall promptly notify the Borrower
      if:

            

    

     

    
      	
              (a)           

            	
              it
      is unable to determine LIBOR; or

            

    

     

    
      	
              (b)           

            	
              for
      any reason any Lender (the “Affected Lender”) is
      unable to obtain Dollars in the London Interbank Market to fund all or any
      part of its Ratable Portion of the Advance during any Interest
      Period,

            

    

     

    in either
case stating the circumstances that have caused such notice to be
given.

     

    
      	
              4.6  

            	
              Suspension of
      Drawdown.  If the Agent’s notice under Clause 4.5
      shall be served before the Advance is made, then while the circumstances
      referred to in the Agent’s notice
continue:

            

    

     

    
      	
              (a)           

            	
              in
      the case of Clause 4.5(a), each Lender’s obligation to make its
      Ratable Portion of the Advance shall be suspended;
  and

            

    

     

    
 

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

     

    
       

      
        	
                (b)           

              	
                in
      the case of Clause 4.5(b), the Affected Lender’s obligation to make
      its Ratable Portion of the Advance shall be
  suspended.

              

      

       

    

    
      	
              4.7

            	
              Negotiation of Alternative Rate
      of Interest.  If the Agent’s notice under Clause 4.5
      is served after the Advance is made, the Borrower and the Agent shall use
      reasonable endeavors to agree, within the 30 days after the date on which
      the Agent serves its notice under Clause 4.5 (the “Negotiation Period”), an
      alternative interest rate or (as the case may be) an alternative basis for
      each Lender or (as the case may be) the Affected Lender to fund or
      continue to fund its Ratable Portion of the Advance during the Interest
      Period concerned.

            

    

     

    
      	
              4.8  

            	
              Application of Agreed
      Alternative Rate of Interest.  Any alternative interest
      rate or an alternative basis that is agreed during the Negotiation Period
      shall take effect in accordance with the terms
  agreed.

            

    

     

    
      	
              4.9  

            	
              Alternative Rate of Interest in
      Absence of Agreement.  If an alternative interest rate or
      alternative basis is not agreed within the Negotiation Period, and the
      relevant circumstances are continuing at the end of the Negotiation
      Period, then the Agent shall set an interest period and interest rate
      representing the cost of funding of the Lenders or (as the case may be)
      the Affected Lender in Dollars or in any available currency of their or
      its Ratable Portion of the Advance plus the Margin and the procedure
      provided for by this Clause 4.9 shall be repeated if the relevant
      circumstances are continuing at the end of the interest period so set by
      the Agent.

            

    

     

    
      	
              4.10  

            	
              Notice of
      Prepayment.  If the Borrower does not agree with an
      interest rate set by the Agent under Clause 4.9, the Borrower may
      give the Agent not less than three Business Days’ notice of its intention
      to prepay the Advance at the end of the interest period set by the
      Agent.

            

    

     

    
      	
              4.11  

            	
              Prepayment.  A
      notice under Clause 4.10 shall be irrevocable.  The Agent
      shall promptly notify the Lenders or (as the case may be) the Affected
      Lender of the Borrower’s notice of intended prepayment
  and:

            

    

     

    
      	
              (a)           

            	
              on
      the date on which the Agent so notifies the Lenders or (as the case may
      be) the Affected Lender, the Commitments or (as the case may be) the
      Commitment of the Affected Lender shall be cancelled;
  and

            

    

     

    
      	
              (b)           

            	
              on
      the last Business Day of the interest period set by the Agent, the
      Borrower shall prepay the Loan or (as the case may be) the Affected
      Lender’s Ratable Portion thereof, together with accrued interest thereon
      at the applicable rate plus the
Margin.

            

    

     

    
      	
              4.12  

            	
              Application of
      Prepayment.  The provisions of Clause 7 shall apply
      in relation to each prepayment pursuant to
    Clause 4.11.

            

    

     

    
      	
              5  

            	
              INTEREST
      PERIODS

            

    

     

    
      	
              5.1  

            	
              Duration of Normal Interest
      Periods.  Subject to Clauses 5.2 and 5.3, each
      Interest Period shall be:

            

    

     

    
      	
              (a)           

            	
              one,
      three or six months, but no more than three one-month periods in any
      one-year period and provided that no such period shall overrun the first
      anniversary of the Actual Drawdown Date, in each case as notified by the
      Borrower to the Agent not

            

    

     

    

    
      
        
           

        

        
          22

          
            

          

        

        
           

        

      

    

    

    
      	
                         

            	
              later
      than 11:00 a.m. (New York time) three Business Days before the
      commencement of such Interest Period;
or

            

    

     

    
      	
              (b)           

            	
              three
      months or, if such Interest Period would overrun the first anniversary of
      the Actual Drawdown Date, a shorter period ending on such anniversary, if
      the Borrower fails to notify the Agent by the time specified in
      paragraph (a) above; or

            

    

     

    
      	
              (c)           

            	
              such
      other period as the Majority Lenders may agree with the Borrower, provided that if the
      Borrower desires an Interest Period longer than six months, the Borrower
      must notify the Agent not later than 11:00 a.m. (New York time) five
      Business Days before the commencement of such Interest
    Period.

            

    

     

    Each
notice of an Interest Period delivered by the Borrower to the Agent in
accordance with this Clause 5.1 shall be irrevocable.

     

    
      	
              5.2  

            	
              Duration of Interest Periods
      Overrunning Repayment Date.  If the Borrower has selected
      an Interest Period that would overrun a Repayment Date or Repayment Dates,
      then:

            

    

     

    
      	
              (a)           

            	
              in
      the case of the final Repayment Date, the Interest Period shall end on the
      final Repayment Date; and

            

    

     

    
      	
              (b)           

            	
              in
      the case of any other Repayment Date, the Loan shall be divided so
      that:

            

    

     

    
      	
              (i)  
               

            	
              the
      amount of each repayment installment falling due before the end of the
      Interest Period selected shall have an Interest Period ending on the
      Repayment Date on which it falls due;
and

            

    

     

    
      	
              (ii)           

            	
              the
      balance of the Loan from time to time outstanding during such Interest
      Period shall have an Interest Period ascertained in accordance with the
      provisions of Clause 5.1;

            

    

     

    and for
this purpose alone may there be Interest Periods of different lengths in
relation to the Loan.

     

    
      	
              5.3  

            	
              Duration of First Interest
      Period.

            

    

     

    
      	
              (a)           

            	
              The
      first Interest Period of the Advance shall commence on the Expected
      Drawdown Date and shall expire on the last day of the Interest Period
      selected by the Borrower in the Drawdown
Notice.

            

    

     

    
      	
              (b)           

            	
              Each
      Interest Period following the first Interest Period under
      Clause 5.3(a) shall commence on the expiry of the preceding Interest
      Period and end on the last day of the Interest Period selected by the
      Borrowers pursuant to the provisions of
  Clause 5.1.

            

    

     

    
      	
              6  

            	
              DEFAULT
      INTEREST

            

    

     

    
      	
              6.1  

            	
              Payment of Default Interest on
      Overdue Amounts.  The Borrower shall pay interest in
      accordance with the following provisions of this Clause 6 on all
      amounts payable by the Borrower under any Finance Document that the Agent,
      the Security Trustee or a Lender, as

            

    

     

    

    
      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    

    
    

     

    
       

      
        	
                 

              	
                the
      case may be, shall not receive on or before the date on which a Finance
      Document provides that such amount is due for
    payment.

              

      

       

    

     

    
      	
              6.2  

            	
              Rate of Default
      Interest.  Overdue principal and, to the extent permitted
      by applicable law, overdue interest in respect of the Advance and every
      other overdue amount payable by either Obligor pursuant to Finance
      Documents shall accrue interest from (and including) the date due until
      the date of actual payment (as well after as before judgment) at the rate
      per annum determined by the Agent to be two percent plus the Margin plus
      LIBOR for a period of one month (determined by the Agent on the first
      Business Day of each calendar
month).

            

    

     

    
      	
              6.3  

            	
              Notification of Default Rates
      of Interest.  The Agent shall promptly notify the
      Borrower of each interest rate determined by the Agent pursuant to
      Clause 6.2, but such notice shall not be taken to imply that the
      Borrower is obligated to pay such interest only with effect from the date
      of such notice.

            

    

     

    
      	
              6.4  

            	
              Payment of Accrued Default
      Interest.  Subject to the other provisions of this
      Agreement, all interest accruing under this Clause 6 shall be due and
      payable on demand.

            

    

     

    
      	
              7  

            	
              REPAYMENT
      AND PREPAYMENT

            

    

     

    
      	
              7.1  

            	
              Amount of Repayment
      Installments.  The Borrower shall repay the Loan in the
      following twenty consecutive quarterly
  installments:

            

    

     

    
      	
              (a)           

            	
              each
      of the first three of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and
      $3,500,000;

            

    

     

    
      	
              (b)           

            	
              the
      next one of which shall be in an amount equal to the lesser of the
      aggregate outstanding principal amount of the Loan and
      $9,500,000;

            

    

     

    
      	
              (c)           

            	
              each
      of the next four of which shall be in an amount equal to the lesser of the
      aggregate outstanding principal amount of the Loan and
      $2,500,000;

            

    

     

    
      	
              (d)           

            	
              each
      of the next eleven of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and $600,000;
      and

            

    

     

    
      	
              (e)           

            	
              the
      last of which shall be payable on the Maturity Date in an amount equal to
      the aggregate outstanding principal amount of the
  Loan,

            

    

     

    provided that if (A) the
Borrower shall have delivered to the Agent not later than 270 days following the
Actual Drawdown Date an irrevocable notice of the Borrower’s election to modify
the amortization of the Loan in accordance with this proviso (“Option B”) and documentary
evidence satisfactory to the Agent showing that a time charter on the Ship shall
then be in full force and effect, provided that such time
charter (1) shall be for a minimum term of two years from the Actual
Drawdown Date and (x) if the term of such time charter shall be from and
including two years from the Actual Drawdown Date up to but not including three
years from the Actual Drawdown Date, the average net daily rate of such time
charter shall be not less than $52,000, or (y) if the term of such time
charter shall be for three years or more from the Actual Drawdown Date, the
average net daily rate of such time charter shall be not less than $47,000 for
the first three years of the time charter, and (2) shall be with an
Approved Charterer and be in form and substance acceptable to the Agent (an
“Option B

     

    

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    

     

    Time
Charter”) and (B) each of the
Borrower and the Guarantor shall have paid all fees due and payable by it
pursuant to this Agreement and the Finance Documents on or before 270th day,
then:

     

    In the
event that the Acceptable Time Charter is for a term from and including two
years from the Actual Drawdown Date up to but not including three years from the
Actual Drawdown Date, the Borrower shall repay the Loan in the following twenty
consecutive quarterly installments:

     

    
      	
               
      

            	
              (a)           
      

            	
              each
      of the first eight of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and
      $3,500,000;

            

    

     

    
      	
               
      

            	
              (b)           
      

            	
              each
      of the next four of which shall be in an amount equal to the lesser of the
      aggregate outstanding principal amount of the Loan and
      $1,100,000;

            

    

     

    
      	
               
      

            	
              (c)           
      

            	
              each
      of the next seven of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and $600,000;
      and

            

    

     

    
      	
               
      

            	
              (d)           
      

            	
              the
      last of which shall be payable on the Maturity Date in an amount equal to
      the aggregate outstanding principal amount of the Loan;
  or

            

    

     

    In the
event that the Acceptable Time Charter is for a term greater than and including
three years from the Actual Drawdown Date, the Borrower shall repay the Loan in
the following twenty consecutive quarterly installments:

     

    
      	
               
      

            	
              (a)           
      

            	
              each
      of the first three of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal of the Loan and
      $3,500,000;

            

    

     

    
      	
               
      

            	
              (b)           
      

            	
              the
      next one of which shall be in an amount equal to the lesser of the
      aggregate outstanding principal amount of the Loan and
      $3,000,000;

            

    

     

    
      	
               
      

            	
              (c)           
      

            	
              each
      of the next eight of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and
      $2,550,000;

            

    

     

    
      	
               
      

            	
              (d)           
      

            	
              each
      of the next seven of which shall be in an amount equal to the lesser of
      the aggregate outstanding principal amount of the Loan and $600,000;
      and

            

    

     

    
      	
               
      

            	
              (e)           
      

            	
              the
      last of which shall be payable on the Maturity Date in an amount equal to
      the aggregate outstanding principal amount of the
  Loan.

            

    

     

    
      	
              7.2  

            	
              Repayment
      Dates.  The first repayment installment shall be made on
      the First Repayment Date.  Each subsequent repayment installment
      shall be repaid quarterly thereafter; provided that the last
      repayment installment shall be repaid on the Maturity Date together with
      all other sums then accrued or owing under the Finance
      Documents.

            

    

     

    
      	
              7.3  

            	
              Voluntary
      Prepayment.  The Borrower may prepay the whole or any
      part of the Loan on the last day of an Interest Period, subject to the
      following conditions:

            

    

     

    
      	
              (a)        
        

            	
              each
      partial prepayment shall be in an amount not less than $500,000 and
      increments of an integral multiple of
$500,000;

            

    

     

    

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

    
      	
              (b)           

            	
              the
      Agent shall have received from the Borrower at least five Business Days’
      prior written notice specifying the amount to be prepaid and the date on
      which the prepayment is to be made;
and

            

    

     

    
      	
              (c)           

            	
              the
      Borrower shall have provided evidence satisfactory to the Agent that any
      consent required by the Borrower in connection with the prepayment shall
      have been obtained and remains in force and that each regulation relevant
      to this Agreement that affects the Borrower shall have been complied
      with.

            

    

     

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

     

    
      	
              7.4  

            	
              Mandatory
      Prepayment.

            

    

     

    
      	
              (a)           

            	
              If
      the Ship is sold or becomes a Total Loss, the Borrower shall prepay the
      aggregate outstanding principal amount of the
  Loan.

            

    

     

    
      	
              (b)           

            	
              If
      (i) the Borrower shall not have (A) elected Option B in
      accordance with the first proviso to Clause 7.1 and
      (B) delivered to the Agent, at least twenty Business Days prior to
      the first anniversary of the Actual Drawdown Date, an irrevocable notice
      of its election to continue the term of the Loan beyond such anniversary
      and, on or before such anniversary, a written appraisal report prepared by
      the Broker stating the Fair Market Value of the Ship as of such
      anniversary, which Fair Market Value shall not be less than 140% of the
      sum of the aggregate outstanding principal amount of the Loan, plus all
      accrued and unpaid interest thereon, plus all other amounts due and
      payable by the Borrower pursuant to the Finance Documents as of such
      anniversary, and which report shall otherwise be in form and substance
      satisfactory to the Agent, or (ii) either the Borrower or the
      Guarantor shall not have paid all fees due and payable by it pursuant to
      this Agreement and the Finance Documents on or before such anniversary,
      the Borrower shall prepay the aggregate outstanding principal amount of
      the Loan.

            

    

     

    
      	
              (c)           

            	
              The
      Borrower shall make each mandatory prepayment pursuant to this
      Clause 7.4:

            

    

     

    
      	
              (i)      
            

            	
              in
      the case of the sale of the Ship requiring a prepayment pursuant to
      Clause 7.4(a), on or before the date on which the sale is completed
      by delivery of the Ship to the buyer;
or

            

    

     

    
      	
              (ii)           

            	
              in
      the case of a Total Loss of the Ship requiring a prepayment pursuant to
      Clause 7.4(a), on the earlier of the date falling 180 days after the
      Total Loss Date and the date of receipt by the Security Trustee or the
      Borrower of the proceeds of insurance relating to such Total
      Loss;

            

    

     

    
      	
              (iii)          

            	
              in
      the case of (A) the Borrower’s failure to elect Option B in
      accordance with the first proviso to Clause 7.1 and to deliver the
      irrevocable notice and the written appraisal report described in
      Clause 7.4(b) or (B) the Borrower’s or the Guarantor’s failure to pay
      the fees described in such Clause 

            

    

     

    

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    

    
    

    
       

      
        	
                 

              	
                7.4(b) requiring
      a prepayment pursuant to Clause 7.4(b), on or before the first
      anniversary of the Actual Drawdown
Date.

              

      

       

    

     

    
      	
              7.5  

            	
              Amounts Payable on
      Prepayment.  Each prepayment pursuant to Clause 7.3
      or 7.4 shall be made together with:

            

    

     

    
      	
              (a)           

            	
              any
      and all accrued interest (and any other amount payable under
      Clause 16.1 or otherwise) in respect of the amount
      prepaid;

            

    

     

    
      	
              (b)           

            	
              if
      the prepayment is not made on the last day of an Interest Period, any and
      all sums payable under Clause 16.2;
and

            

    

     

    
      	
              (c)           

            	
              any
      and all additional amounts that may need to be paid for the Borrower to
      remain in compliance with the requirements of
      Clause 10.3.

            

    

     

    
      	
              7.6  

            	
              Application of
      Prepayments.  Each prepayment pursuant to Clause 7.3
      shall be applied pro-rata to the repayment installments (excluding the
      balloon payment, if any due on the Maturity Date) of the Loan, and
      promptly thereafter the Agent shall recalculate the remaining repayment
      installments and advise the Borrower
  accordingly.

            

    

     

    
      	
              7.7  

            	
              No
      Reborrowing.  No amount repaid or prepaid may be
      reborrowed.

            

    

     

    
      	
              7.8  

            	
              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 wholly or partially reverse, offset, unwind or otherwise
      terminate one or more of the continuing Designated Transactions to the
      extent necessary to ensure that the aggregate notional principal amount of
      the continuing Designated Transactions thereafter remaining does not and
      will not in the future (taking into account the scheduled amortization
      thereof) exceed the aggregate amount of the Loan scheduled to be
      outstanding from time to time
hereunder.

            

    

     

    
      	
              7.9  

            	
              Repayment of Swap
      Benefit.  If a Designated Transaction is terminated in
      circumstances in which the Swap Bank would be obliged to pay an amount to
      the Borrower under the Master agreement, the Borrower hereby agrees that
      such payment shall be applied in prepayment of the Loan in accordance with
      the terms of Clause 7.6 and hereby authorizes the Swap Bank to pay
      such amount to the Agent for such
purpose.

            

    

     

    
      	
              8  

            	
              CONDITIONS
      PRECEDENT

            

    

     

    
      	
              8.1  

            	
              Documents, Fees and No
      Default.  Each Lender’s obligation to make available its
      Ratable Portion of the Advance is subject to the following conditions
      precedent:

            

    

     

    
      	
              (a)           

            	
              on
      or before the delivery of the Drawdown Notice, the Agent shall have
      received:

            

    

     

    
      	
              (i)           

            	
              the
      documents described in Part A of Schedule 3, each in form and
      substance satisfactory to the Agent and its lawyers;
  and

            

    

     

    
      	
              (ii)           

            	
              such
      documentation and other evidence as is reasonably requested by the Agent
      or a Lender in order for each Lender to carry out and be satisfied with
      the results of all necessary “know your customer” or other checks that it
      is required to carry out in relation to the transactions contemplated by
      this 

            

    

     

    

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    

    
    

     

    
       

      
        	
                 

              	
                Agreement
      and the other Finance Documents, including obtaining, verifying and
      recording certain information and documentation that will allow the Agent
      and each Lender to identify the Borrower and the Guarantor in accordance
      with the requirements of the USA PATRIOT Act (Title III of
      Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT
      Act”);

              

      

       

    

    
      	
              (b)           

            	
              on
      or before the Expected Drawdown Date, the Agent shall have received the
      documents described in Part B of Schedule 3, each in form and
      substance satisfactory to the Agent and its
  lawyers;

            

    

     

    
      	
              (c)           

            	
              the
      Borrower shall have paid in full all fees and expenses referred to in
      Clause 15 that are due, or demanded by the Agent, on or before the
      date of the Advance;

            

    

     

    
      	
              (d)           

            	
              on
      the date of the Drawdown Notice, the Expected Drawdown Date and the Actual
      Drawdown Date:

            

    

     

    
      	
              (i)           

            	
              no
      Event of Default or Potential Event of Default shall have occurred and be
      continuing or would result from the borrowing of the Loan or any part
      thereof;

            

    

     

    
      	
              (ii)          

            	
              the
      representations and warranties in Clause 9 and those of each Obligor
      in any other Finance Document would be true and not misleading if repeated
      on each of those dates with reference to the circumstances then
      existing;

            

    

     

    
      	
              (iii)         

            	
              there
      has been no material change in the financial condition, assets, operations
      or business prospects of either of the Obligors since the date on which
      either Obligor provided information concerning those topics to the Agent
      or any Lender; and

            

    

     

    
      	
              (iv)         

            	
              none
      of the circumstances described in Clause 4.5 shall have occurred and
      be continuing;

            

    

     

    
      	
              (e)           

            	
              if
      the ratio set out in Clause 10.3 were applied immediately following
      the making of the Advance, the Borrower would not be obliged to provide
      additional security or prepay part of the Loan;
  and

            

    

     

    
      	
              (f)           

            	
              the
      Agent shall have received and found acceptable any further opinions,
      consents, agreements and documents in connection with the Finance
      Documents that the Agent shall have requested by notice to the
      Borrower.

            

    

     

    
      	
              8.2  

            	
              Waiver of Conditions
      Precedent.  If the Agent, with the consent of the
      Majority Lenders, permits the Advance to be borrowed before certain of the
      conditions referred to in Clause 8.1 shall be satisfied, the Borrower
      shall ensure that those conditions are satisfied within five Business Days
      after the Actual Drawdown Date (or such longer period as the Agent may
      specify).

            

    

     

    
      	
              9  

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    Each
Obligor represents and warrants as follows:

     

    

    
      
        
           

        

        
          28

          
            

          

        

        
           

        

      

    

     

    
       

      
        	
                9.1  

              	
                Status.  
      Each Obligor
  is:

              

      

    

     

    
      	
              (a)           

            	
              a
      corporation duly organized, validly existing and in good standing under
      the law of the Marshall Islands (in the case of the Guarantor) or Liberia
      (in the case of the Borrower); and

            

    

     

    
      	
              (b)           

            	
              duly
      qualified and in good standing as a foreign corporation in each other
      jurisdiction in which it owns or leases property or in which the conduct
      of its business requires it to so qualify or be
  licensed.

            

    

     

    
      	
              9.2  

            	
              Company Power;
      Consents.  Each Obligor has the corporate power and has
      taken all action required, and no consent of any person is required,
      for:

            

    

     

    
      	
              (a)           

            	
              it
      to own or lease and operate its properties and to carry on its business as
      now conducted and as proposed to be
conducted;

            

    

     

    
      	
              (b)           

            	
              it
      to execute, deliver and perform its obligations under this Agreement, each
      other Finance Document, the Memorandum of Agreement and each charter to
      which it is or is to be a party, and to consummate the transactions
      contemplated hereby and thereby;

            

    

     

    
      	
              (c)           

            	
              it
      to borrow under this Agreement (in the case of the Borrower) and to make
      all payments contemplated by, and to comply with the obligations of, the
      Finance Documents to which it is or is to be a
  party;

            

    

     

    
      	
              (d)           

            	
              it
      to grant the liens granted or to be granted by it pursuant to the Finance
      Documents to which it is or is to be a
party;

            

    

     

    
      	
              (e)           

            	
              to
      perfect and maintain the perfection of the liens granted or to be granted
      by it pursuant to the Security Documents (including the first-priority
      nature thereof); and

            

    

     

    
      	
              (f)           

            	
              the
      exercise by the Agent, the Security Trustee, Lenders and the Swap Bank of
      their rights under the Finance Documents and the remedies in respect of
      the Collateral pursuant to the Finance
  Documents;

            

    

     

    except,
in the case of any consent, for such consents that have been duly obtained,
taken, given or made and that are in full force and effect.

     

    
      	
              9.3  

            	
              Consents Not Capable of
      Revocation.  Nothing has occurred that makes any of the
      consents referred to in Clause 9.2 capable of being revoked and each
      Obligor is in compliance with all applicable
  laws.

            

    

     

    
      	
              9.4  

            	
              Legal Validity; Effective
      Security Interests.

            

    

     

    
      	
              (a)           

            	
              Each
      of the Memorandum of Agreement and this Agreement constitutes, and each
      other Finance Document to which either Obligor is to be a party will
      constitute upon the execution and delivery thereof by such Obligor, the
      legal, valid and binding obligations of each Obligor party hereto or
      thereto, as the case may be, enforceable against such Obligor in
      accordance with its terms.

            

    

     

    

    
      
        
           

        

        
          29

          
            

          

        

        
           

        

      

    

    

    
      	
              (b)           

            	
              Each
      Security Document creates or, upon the execution and delivery thereof by
      each Obligor party thereto, will
create:

            

    

     

    
      	
              (i)           

            	
              in
      the case of the Mortgage, a valid first preferred mortgage in favor of the
      Security Trustee over the Collateral described therein, subject to the
      registration of the Mortgage as described herein;
  and

            

    

     

    
      	
              (ii)          

            	
              in
      the case of each other Security Document, a legal, valid, binding and
      enforceable Security Interest in favor of the Security Trustee over all
      the Collateral described therein that shall be duly perfected and have
      first priority (A) in the case of the Earnings Assignment and Charter
      Assignment, upon notice thereof being given each obligor referenced
      therein and proper UCC financing statements describing such Collateral
      being filed with the Washington, D.C., Recorder of Deeds, and (B) in
      the case of the Insurance Assignment, notice thereof being given to
      underwriters and protection and indemnity clubs and their consent being
      obtained where policy provisions or club rules so
  require.

            

    

     

    
      	
              9.5  

            	
              No Conflicts; No
      Liens.  The execution, delivery and performance by each
      Obligor of the Memorandum of Agreement, this Agreement and each other
      Finance Document to which it is or is to be a party, the borrowing by the
      Borrower of the Loan, and consummation of the transactions contemplated
      hereby and thereby do not and will
not:

            

    

     

    
      	
              (a)           

            	
              violate
      or contravene (i) any law or regulation or order, writ, judgment,
      injunction, decree, determination or award; (ii) the organizational
      documents of either Obligor; or (iii) any contractual or other
      obligation or restriction that is binding on either Obligor or any of its
      assets; and

            

    

     

    
      	
              (b)           

            	
              except
      for liens created by the Security Documents, result in or require the
      creation or imposition of any lien upon or with respect to any of the
      properties of either Obligor.

            

    

     

    
      	
              9.6  

            	
              No Withholding Taxes; Tax
      Returns.

            

    

     

    
      	
              (a)           

            	
              Each
      payment that an Obligor is required to make under the Finance Documents
      may be made without deduction or withholding for or on account of any tax
      payable under any law of any Pertinent
  Jurisdiction.

            

    

     

    
      	
              (b)           

            	
              Each
      Obligor has filed or has caused to be filed all tax returns and other
      reports that it is required by law or regulation to file in any Pertinent
      Jurisdiction, and has paid or caused to be paid all taxes, assessments and
      other similar charges that are due and payable in any Pertinent
      Jurisdiction, other than taxes and charges that are (i) not yet
      delinquent or (ii) being contested in good faith by appropriate
      proceedings and for which adequate reserves have been
      established.  The charges, accruals, and reserves on the books
      of each Obligor respecting taxes are adequate in accordance with
      Applicable Accounting Principles.

            

    

     

    
      	
              9.7  

            	
              No
      Default.  No Event of Default or Potential Event of
      Default has occurred and is continuing and there is no incipient or other
      default under any other agreements of either
  Obligor.

            

    

     

    

    
      
        
           

        

        
          30

          
            

          

        

        
           

        

      

    

    

    
      	
              9.8  

            	
              Compliance with
      Laws.  Each Obligor is in compliance with all laws,
      orders, writs, injunctions and decrees applicable to it or any of its
      assets except to the extent such non-compliance could not reasonably be
      expected to have a material adverse effect on the financial condition,
      assets, operations or business prospects of either Obligor or to affect
      adversely the legality, validity, binding effect of enforceability of this
      Agreement, any Finance Document, the Memorandum of Agreement or any
      Approved Charter;

            

    

     

    
      	
              9.9  

            	
              Information.  All
      financial and other information that has been provided in writing by or on
      behalf of each Obligor to any of the Credit Parties in connection with any
      Finance Document was true and accurate at the time it was given, there are
      no other facts or matters the omission of which would have made or make
      any such information false or misleading and there has been no material
      adverse change in the financial condition, assets, operations or business
      prospects of either Obligor since the date on which such information was
      provided.

            

    

     

    
      	
              9.10  

            	
              No
      Litigation.  No legal or administrative action involving
      either Obligor (including any action relating to any alleged or actual
      breach of the ISM Code or ISPS Code or any Environmental Law) has been
      commenced or taken or, to either Obligor’s knowledge is likely to be
      commenced or taken, that could reasonably be expected to have a material
      adverse effect on the financial condition, assets, operations or business
      prospects of either Obligor or to affect adversely the legality, validity,
      binding effect or enforceability of this Agreement, any other Finance
      Document, the Memorandum of Agreement or any Approved
    Charter.

            

    

     

    
      	
              9.11  

            	
              ISM Code and ISPS Code
      Compliance.  The Borrower has obtained, or has caused the
      Approved Manager (technical) and the Approved Technical Submanager, if
      any, to obtain, all necessary ISM Code Documentation in connection with
      the Ship and its operation and will be, and will cause the Ship, the
      Approved Manager and the Approved Technical Submanager, if any, to be, in
      full compliance with the ISM Code and the ISPS
  Code.

            

    

     

    
      	
              9.12  

            	
              Validity
      and Completeness of Memorandum of Agreement and
  Charters

            

    

     

    
      	
              (a)           

            	
              The
      Borrower has executed and delivered the Memorandum of Agreement and a
      charter in respect of the Ship and such Memorandum of Agreement and
      charter constitute the valid, binding and enforceable obligations of the
      parties thereto in accordance with their terms and is in full force and
      effect.  True and complete copies of the Memorandum of Agreement
      and each Approved Charter, each agreement, instrument and other document
      delivered in connection therewith, and each amendment thereto and waiver
      thereof have been delivered to the Agent and the
  Lenders.

            

    

     

    
      	
              (b)           

            	
              There
      is no default on the part of the Borrower or, to the best knowledge of the
      Borrower, on the part of the relevant seller or charterer, with respect to
      the Memorandum of Agreement or any Approved Charter and no party to the
      Memorandum of Agreement or any Approved Charter has any right to terminate
      the Memorandum of Agreement or such Approved
  Charter.

            

    

     

    
      	
              (c)           

            	
              There
      is no, nor shall there be, any agreement or understanding to allow or pay
      any rebate, premium, commission, discount or other benefit or payment
      (howsoever 

            

    

     

    

    
      
        
           

        

        
          31

          
            

          

        

        
           

        

      

    

    

    
    

    
       

      
        	
                       

              	
                described)
      to the Borrower or any third party in connection with the purchase of the
      Ship other than as disclosed to the Agent in
    writing.

              

      

       

    

    
      	
              9.13  

            	
              Margin
      Stock.  The Borrower is not engaged in the business of
      extending credit for the purpose of purchasing or carrying Margin Stock
      and no proceeds of the Loan will be used to buy or carry any Margin Stock
      or to extend credit to others for the purpose of buying or carrying any
      Margin Stock.

            

    

     

    
      	
              9.14  

            	
              Compliance with Environmental
      Laws; Environmentally Sensitive Material.  Except to the
      extent the following could not reasonably be expected to have a material
      adverse effect on the financial condition, assets, operations or business
      prospects of either Obligor or that may affect adversely the legality,
      validity, binding effect or enforceability of this Agreement, any other
      Finance Document, the Memorandum of Agreement or any Approved
      Charter:

            

    

     

    
      	
              (a)           

            	
              the
      operations and assets of each Obligor comply with all Environmental Laws,
      all necessary Environmental Permits have been obtained and are in full
      force and effect for the operations and properties of each Obligor, and
      each Obligor is in compliance in all material respects with all such
      Environmental Permits; and

            

    

     

    
      	
              (b)           

            	
              none
      of the Obligors has been notified in writing by any person that it or any
      of its subsidiaries or Affiliates is potentially liable for the remedial
      or other costs with respect to treatment, storage, disposal, release,
      arrangement for disposal or transportation of any Environmentally
      Sensitive Material, except for costs incurred in the ordinary course of
      business with respect to treatment, storage, disposal or transportation of
      such Environmentally Sensitive
Material.

            

    

     

    
      	
              9.15  

            	
              Subsidiaries; Ownership of
      Borrower.  The Borrower does not have any
      subsidiaries.  All of the outstanding equity of the Borrower has
      been validly issued, is fully paid, non-assessable and free and clear of
      all liens and is owned beneficially and of record by the
      Guarantor.

            

    

     

    
      	
              9.16  

            	
              Investment Company, Holding
      Company, Etc.  None of the Obligors is (a) an
      “investment company,” or an “affiliated person” of, or “promoter” or
      “principal underwriter” for, an “investment company,” as such terms are
      defined in the Investment Company Act of 1940, as amended, or (b) a
      “holding company” or a “subsidiary company” of a “holding company” or an
      affiliate of a “holding company” or of a “subsidiary company” of a
      “holding company” or a “public utility” within the meaning of the Public
      Utility Holding Company of 1935, as amended, or (c) a “public
      utility” within the meaning of the Federal Power Act of 1920, as
      amended.

            

    

     

    
      	
              9.17  

            	
              Asset
      Control.  None of the Obligors is a “national” of any
      “designated foreign country” within the meaning of the Foreign Assets
      Control Regulations or the Cuban Asset Control Regulations of the U.S.
      Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
      amended, or a “specially designated national” listed by the Office of
      Foreign Assets Control (“OFAC”), the U.S.
      Department of the Treasury, or any regulations or rulings issued
      thereunder.  Neither the making of the Advance nor the use of
      the proceeds thereof nor the performance by the Borrower of its
      obligations under any of the Finance Documents to which it is a party
      violates any statute, regulation or executive order restricting loans to,
      investments in, or the export of assets to, foreign countries or entities
      doing business there.

            

    

     

    

    
      
        
           

        

        
          32

          
            

          

        

        
           

        

      

    

    

    
      	
              9.18  

            	
              ERISA.  None
      of the Obligors maintains, or has ever established or maintained, any
      employee benefit plan subject to Title IV of the Employee Retirement
      Income Security Act of 1974, as
amended.

            

    

     

    
      	
              9.19  

            	
              Use of
      Proceeds.  The Borrower is using the proceeds of the Loan
      only for the purposes stated in the recitals to this
      Agreement.

            

    

     

    
      	
              9.20  

            	
              Legal Name, Location and Place
      of Business.  The Borrower’s exact legal name, as defined
      in Section 9-503(a) of the UCC, is correctly set forth on the
      signature pages to this Agreement.  The Borrower has not
      previously changed its name, location, chief executive office, only place
      of business, place where it maintains its agreements, type of organization
      or jurisdiction of organization.  The Borrower is located
      (within the meaning of Section 9-307 of the UCC) in Washington, D.C.,
      and has its chief executive office or only place of business and the
      location at which it conducts its affairs and keeps its records at Vas.
      Sofias 1 & Meg. Alexandrou, Maroussi, Athens 151 24,
      Greece.

            

    

     

    
      	
              9.21  

            	
              Repetition.  The
      representations and warranties contained in this Clause 9.3 shall be
      deemed to be repeated by each Obligor at the commencement of each Interest
      Period until all of the Outstanding Indebtedness has been paid in
      full.

            

    

     

    
      	
              10  

            	
              COVENANTS

            

    

     

    
      	
              10.1  

            	
              Affirmative
      Covenants.  From the date of this Agreement and
      throughout the Security Period (unless otherwise
    specified):

            

    

     

    
      	
              (a)           

            	
              each
      Obligor shall duly observe and perform its obligations under this
      Agreement, the other Finance Documents, the Memorandum of Agreement and
      the charters to which it is or will be a party, and each Obligor shall
      promptly notify the Agent of (i) any material default by any party to
      the Memorandum of Agreement or charter, and (ii) any significant
      damage or injury caused by or to the
Ship;

            

    

     

    
      	
              (b)           

            	
              each
      Obligor shall notify the Agent, promptly upon becoming aware of the same,
      of the occurrence of any Event of Default or Potential Event of Default or
      any other event (including any litigation) that might adversely affect the
      ability of any Obligor to perform its obligations under this Agreement,
      any other Finance Document, the Memorandum of Agreement or any Approved
      Charter;

            

    

     

    
      	
              (c)           

            	
              each
      Obligor shall obtain, maintain in full force and effect and comply with
      the conditions and restrictions (if any) imposed in connection with each
      consent, and shall do all other acts and things, that may from time to
      time be necessary or required for the continued due performance of all of
      its obligations under this Agreement, the other Finance Documents, the
      Memorandum of Agreement and the charters to which it is a party, and shall
      deliver a copy of each such consent to the Agent promptly upon its
      request;

            

    

     

    
      	
              (d)           

            	
              each
      Obligor shall comply with all applicable federal, state, local and foreign
      laws, ordinances, rules, orders and regulations now in force or hereafter
      enacted, including all Environmental Laws and regulations relating to
      thereto, the failure to comply with which could reasonably be expected to
      have a material adverse effect on the financial

            

       

      
        

        
          
            
               

            

            
              33

              
                

              

            

            
               

            

          

        

      

       

       

      	 	
              condition,
      assets, operations or business prospects of either Obligor or to affect
      adversely the legality, validity, binding effect or enforceability of this
      Agreement, any other Finance Document, the Memorandum of Agreement or any
      Approved Charter;

            

    

     

    
      	
              (e)           

            	
              each
      Obligor shall keep proper books of record and account, in which full and
      materially correct entries shall be made of all financial transactions and
      the assets and business of such Obligor in accordance with Applicable
      Accounting Principles acceptable to the Agent, and the Agent shall have
      the right to examine the books and records of the Obligors wherever the
      same may be kept from time to time as it sees fit, in its sole discretion,
      or to cause an examination to be made by a firm of accountants selected by
      it;

            

    

     

    
      	
              (f)           

            	
              the
      Guarantor shall prepare and deliver to the
  Agent:

            

    

     

    
      	
              (i)   
              

            	
              within
      45 days after the end of each of the first three quarters of each of its
      fiscal years, the consolidated unaudited financial results of the Group in
      respect of such quarter (including balance sheet, profit and loss account
      and quarterly management accounts), and as soon as practicable, but not
      later than 120 days after the end of each of its fiscal years, the
      consolidated annual audited financial statements of the Group in respect
      of such fiscal year, together with reports of and updates on all
      off-balance sheet financings and time charter hire commitments of the
      Borrower, in each case (A) prepared in accordance with Applicable
      Accounting Principles acceptable to the Agent (and in the case of the
      consolidated annual financial statements, audited by a firm of independent
      auditors reasonably acceptable to the Agent) and (B) certified as
      true, complete and correct by the chief financial officer of the
      Guarantor;

            

    

     

    
      	
              (ii)    
            

            	
              together
      with each financial statement that the Guarantor delivers in
      Clause 10.1(f)(i), a Compliance Certificate;
  and

            

    

     

    
      	
              (iii)   
            

            	
              such
      other financial statements, annual budgets and projections as may be
      reasonably requested by the Agent, in each case in such form as the Agent
      may reasonably request;

            

    

     

    
      	
              (g)           

            	
              each
      Obligor shall prepare and timely file all tax returns required to be filed
      by it and pay and discharge all taxes imposed upon it or in respect of any
      of its property and assets before the same shall become in default, as
      well as all lawful claims (including claims for labor, materials and
      supplies) that, if unpaid, might become a lien or charge upon the
      Collateral or any part thereof, except in each case, such taxes (i) that
      are being contested in good faith by appropriate proceedings or (ii) the
      failure of which to pay or discharge could not reasonably be expected to
      have a material adverse effect on the financial condition, assets,
      operations or business prospects of either Obligor or to affect adversely
      the legality, validity, binding effect or enforceability of this
      Agreement, any other Finance Document, the Memorandum of Agreement or any
      Approved Charter;

            

    

     

    

    
      
        
           

        

        
          34

          
            

          

        

        
           

        

      

    

    

    
      	
              (h)           

            	
              each
      Obligor shall permit each person designated by the Agent to visit and
      inspect the Ship, at the risk and cost of the Obligors, at such times and
      so often as the Agent may reasonably require, provided that no such
      visit or inspection shall unduly interfere with the operation of the
      Ship;

            

    

     

    
      	
              (i) 
                

            	
              the
      Borrower shall cause the Ship at all times to be (i) kept in a good
      and safe condition and state of repair that is consistent with first class
      ship ownership and management practice, (ii) in compliance with all
      laws and regulations applicable to vessels registered under the law of the
      Approved Flag in which the Ship is registered and trading to any
      jurisdiction to which the Ship may trade from time to time,
      (iii) managed by an Approved Manager, or an Approved Manager and an
      Approved Technical Submanager, in accordance with vessel management
      agreements and vessel technical submanagement agreements acceptable to the
      Agent and that shall each have executed and delivered a Manager’s
      Undertaking to the Agent, (iv) registered under the law of an
      Approved Flag state, and (v) classed with the Classification Society
      in the highest classification and rating for vessels of the same age and
      type without any outstanding conditions or recommendations affecting class
      (other than those for which the time prescribed for curing the condition
      or recommendation has not passed);

            

    

     

    
      	
              (j)       
          

            	
              the
      Borrower shall (i) cause the operator of the Ship to comply, in all
      material respects within the requisite applicable time limits for vessels
      of the same type, size, age and flag as the Ship, with the ISM Code and,
      in particular, without prejudice to the generality of the foregoing, as
      and when required to do so by the ISM Code and at all times thereafter,
      (ii) cause the operator of the Ship to hold a valid Document of
      Compliance and Safety Management Certificate with respect to the Ship,
      (iii) provide the Agent with copies of each such Document of
      Compliance and Safety Management Certificate promptly following the
      issuance thereof and after every renewal and (iv) cause to kept on board
      the Ship a copy of such Document of Compliance and the original of such
      Safety Management Certificate;

            

    

     

    
      	
              (k)           

            	
              the
      Borrower shall:

            

    

     

    
      	
              (i)   
              

            	
              maintain
      a valid International Ship Security Certificate with respect to the
      Ship;

            

    

     

    
      	
              (ii)  
              

            	
              cause
      the Ship’s security system and associated security equipment to comply
      with the applicable requirements of Chapter XI-2 of SOLAS and
      Part A of the ISPS Code; and

            

    

     

    
      	
              (iii)  
             

            	
              maintain
      an approved ship security plan with respect to the
  Ship;

            

    

     

    
      	
              (l)      
           

            	
              each
      Obligor shall do or cause to be done all things necessary to preserve and
      keep in full force and effect its corporate
  existence;

            

    

     

    
      	
              (m)          

            	
              the
      Borrower shall maintain insurance on the Ship as required by the terms of
      the Mortgage;

            

    

     

    

    
      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

    

    
      	
              (n)           

            	
              each
      Obligor shall maintain insurance on all of its properties other than the
      Ship, payable in United States Dollars, with responsible companies, in
      such amounts and against such risks as is usually carried by owners of
      similar businesses and properties in the same general areas in which it
      operates, and as shall be satisfactory to the Majority
      Lenders;

            

    

     

    
      	
              (o)           

            	
              except
      as otherwise required by any Finance Document or to the extent the failure
      to do so could not reasonably be expected to have a material adverse
      effect on the financial condition, assets, operations or business
      prospects of any Obligor or to affect adversely the legality, validity,
      binding effect or enforceability of this Agreement, any other Finance
      Document, the Memorandum of Agreement or any Approved Charter, each
      Obligor shall maintain and preserve all of its properties that are used or
      useful in the conduct of its business in good working order and condition,
      ordinary wear and tear excepted;

            

    

     

    
      	
              (p)           

            	
              the
      Borrower shall use the proceeds of the Loan solely for the purposes
      referenced in Clause 2.2;

            

    

     

    
      	
              (q)           

            	
              the
      Borrower shall furnish to the Agent a true and complete copy of the
      Memorandum of Agreement and each charter to which it becomes a party after
      the date hereof and a true and complete copy of each material amendment or
      other modification thereto promptly following the execution and delivery
      thereof;

            

    

     

    
      	
              (r)           

            	
              each
      Obligor shall take, or cause to be taken, such actions as may be
      reasonably required to mitigate potential liability to it arising out of
      pollution incidents or as may be reasonably required to protect the
      interests of the Credit Parties with respect
  thereto;

            

    

     

    
      	
              (s)           

            	
              the
      Borrower shall cause all loans made by the Guarantor or any other
      Affiliate to it and all sums and other obligations (financial or
      otherwise) owed by it to any Approved Manager to be fully subordinated to
      all Secured Liabilities of the
Borrower;

            

    

     

    
      	
              (t)           

            	
              the
      Borrower shall procure and deliver to the Agent, in each case at the
      expense of the Borrower (i) on or before the thirtieth day following each
      of the second and fourth anniversaries of the Effective Date, a written
      appraisal report prepared by the Broker setting forth the Fair Market
      Value of the Ship as of such anniversary, and (ii) promptly following
      the Agent’s request therefor so long as an Event of Default shall have
      occurred and be continuing, such other interim valuation reports that the
      Agent may request in each case prepared by the Broker and setting forth
      the Fair Market Value of the Ship as of any date requested by the Agent
      and following such request;

            

    

     

    
      	
              (u)           

            	
              the
      Guarantor shall be the sole legal and beneficial shareholder of the
      Borrower;

            

    

     

    
      	
              (v)           

            	
              the
      Guarantor shall:

            

    

     

    
      	
              (i)    
             

            	
              maintain,
      at all times until the end of the Security Period, a minimum amount of
      $25,000,000 in bank accounts in its name or in the name of any of
      a

            

    

     

    

    
      
        
           

        

        
          36

          
            

          

        

        
           

        

      

    

    

    
      	
               

            	
              member
      of the Group and agreed by the Agent in writing from time to time, and for
      the purposes of this Clause 10.1(v)(i) the expression “bank accounts”
      shall exclude any bank accounts that shall be subject to any Security
      Interest;

            

    

     

    
      	
              (ii)  
              

            	
              cause
      its Net Asset Value to exceed $125,000,000 at all times until the end of
      the Security Period; and

            

    

     

    
      	
              (iii)
               

            	
              cause
      its Book Equity to exceed $100,000,000 at all times until the end of the
      Security Period;

            

    

     

    provided
that (A) the compliance of the Guarantor with the covenants set out in this
Clause 10.1(v) shall be determined on the basis of calculations made by the
Agent at any time by reference to the latest consolidated financial statements
of the Group delivered to the Agent pursuant to Clause 10.1(f) and the
Agent shall be entitled to make such determinations and calculations at any time
when, and in relation to any period in relation to which, the Guarantor shall be
obliged to comply with each of the covenants put in this Clause 10.1(v)
without regard to when any such financial statements are due to be delivered or
have been actually delivered to the Agent; (B) for the purposes of this
Clause 10.1(v), no item shall be deducted or credited more than once in any
calculation; and any amount expressed in a currency other than Dollars shall be
converted into Dollars in accordance with Applicable Accounting Principles;
(C) each of the Relevant Ships shall, for the purposes of this
Clause 10.1(v) and the definitions relevant thereto be valued in Dollars as
and when the Agent shall require and each such valuation shall be made by an
independent firm of shipbrokers appointed by the Agent without, unless required
by the Agent, physical inspection, and on the basis of a sale for prompt
delivery for cash at arm’s length, on normal commercial terms as between a
willing buyer and a willing seller and without taking into account the benefit
of any charterparty or other employment of such Relevant Ship and the value of
each of the Relevant Ships determined in accordance with the provisions of this
Clause 10.1(v) shall be binding upon the parties hereto for the purposes of
calculating the Total Market Value Adjusted Assets until such time as any
further such valuations shall be calculated; (D) the Guarantor shall supply
to each of the Agent and such shipbrokers such information concerning any
Relevant Ship and its condition as the Agent or such shipbroker may reasonably
require for the purpose of making any such valuation; and (E) all costs in
connection with the Agent obtaining any valuation of each of the Relevant Ships
referred to in this Clause 10.1(v) shall be borne by the
Borrower;

     

    
      	
              (w)          

            	
              the
      Borrower shall (i) ensure that no person who owns a controlling
      interest in or otherwise controls the Borrower or any subsidiary thereof
      is or shall be listed on the Specially Designated Nationals and Blocked
      Person List or other similar lists maintained by OFAC or included in any
      Executive Orders, (ii) comply, and cause each of its subsidiaries to
      comply, with all applicable Bank Secrecy Act laws and regulations, as
      amended, and (iii) not use or permit the use of the proceeds of the
      Loan to violate any of the foreign asset control regulations of OFAC or
      any enabling statute or Executive Order relating thereto;
    and

            

    

     

    
      	
              (x)           

            	
              from
      time to time and at its expense, each Obligor shall duly execute and
      deliver to the Agent such further documents and assurances as the Majority
      Lenders or the Agent
      may request to effectuate the purposes of this Agreement and the other
      Finance Documents or to obtain the full benefit of any of the
      Collateral.

            

    

     

    

    
      
        
           

        

        
          37

          
            

          

        

        
           

        

      

    

    

    
    

     

    
      	
              10.2  

            	
              Negative
      Covenants.  Without the prior written consent of the
      Majority Lenders:

            

    

     

    
      	
              (a)           

            	
              none
      of the Obligors will create, assume or permit to exist any Security
      Interest whatsoever upon any of its properties or assets, whether now
      owned or hereafter acquired, except for (i) the Security Interests
      created by the Finance Documents to which it is a party, (ii) the
      Security Interests created by the Junior Security Documents to which it is
      a party, but only so long as all Security Interests created by the Junior
      Security Documents shall be subject and subordinate to the Security
      Interests created by the Finance Documents, and (iii) liens that
      arise by operation of law in the ordinary course of business, the failure
      of which to pay or discharge could not reasonably be expected to have a
      material adverse effect on the financial condition, assets, operations or
      business prospects of any Obligor or to affect adversely the legality,
      validity, binding effect or enforceability of this Agreement, any other
      Finance Document, the Memorandum of Agreement or any Approved
      Charter;

            

    

     

    
      	
              (b)           

            	
              none
      of the Obligors shall sell, transfer or lease all of or a substantial
      portion of its properties and assets, or enter into any transaction of
      merger or consolidation or liquidate, windup or dissolve itself (or suffer
      any liquidation or dissolution), except that, so long as no Event of
      Default or Potential Event of Default shall have occurred or be continuing
      or would occur or be continuing immediately after giving effect to such
      transaction:

            

    

     

    
      	
              (i)       
          

            	
              the
      Borrower may sell the Ship, but only if the proceeds of the sale are
      applied in accordance with Clause 7.4 and the sale of the Ship is
      effected pursuant to an arm’s length transaction for fair market value;
      and

            

    

     

    
      	
              (ii)    
            

            	
              the
      Borrower may charter or lease the Ship in accordance with
      Clause 10.2(c);

            

    

     

    
      	
              (c)           

            	
              the
      Borrower shall not charter the Ship, or permit the Ship to be chartered or
      sub-chartered, to any person, or permit any person to have possession or
      the right to use or direct the use of the Ship, except that the Borrower
      may:

            

    

     

    
      	
              (i)      
           

            	
              charter
      the Ship to an Approved Charterer pursuant to the terms of an Approved
      Charter assigned as Collateral to the Security Trustee for the benefit of
      the Credit Parties pursuant to a Charter
  Assignment;

            

    

     

    
      	
              (ii)    
            

            	
              permit
      each charterer of the Ship to charter or sub-charter the Ship to an
      Approved Charterer pursuant to the terms of a charter that is an Approved
      Charter but is not an Option B Time Charter or the Initial Approved
      Charter; and

            

    

     

    
      	
              (iii)    
           

            	
              cause
      or permit the Ship to be managed by an Approved Manager, or an Approved
      Manager and an Approved Technical Submanager, pursuant to
  

            

       

      
        

        
          
            
               

            

            
              38

              
                

              

            

            
               

            

          

        

      

       

       

      	 	vessel
      management and technical submanagement agreements acceptable to the
      Agent;

    

     

    
      	
              (d)           

            	
              neither
      of the Obligors shall enter into any transaction or series of related
      transactions, whether or not in the ordinary course of business, with any
      Affiliate or subsidiary, other than on terms and conditions substantially
      as favorable to such person as would be obtainable by such person at the
      time in a comparable arm’s-length transaction with a person other than an
      Affiliate or subsidiary;

            

    

     

    
      	
              (e)           

            	
              neither
      of the Obligors shall make or permit any change in accounting policies
      affecting (i) the presentation of financial statements or
      (ii) reporting practices, except in either case except as required by
      Applicable Accounting Principles or as may be acceptable to the Agent with
      the consent of the Majority
Lenders;

            

    

     

    
      	
              (f)           

            	
              the
      Borrower shall not engage in any business other the execution, delivery
      and performance of its obligations under this Agreement, the other Finance
      Documents to which it is or will be a party, and the Junior Loan
      Documents, the ownership of the Ship, and the execution, delivery and
      performance of its obligations under the Memorandum of Agreement and each
      charter and management agreement to which it is a party relating to the
      Ship and permitted by the terms of this Agreement, the other Finance
      Documents to which it is or will be a party, and the Junior Loan
      Documents;

            

    

     

    
      	
              (g)           

            	
              the
      Borrower shall not transfer or change or permit the transfer or change of
      the flag of the Ship from the Approved Flag in which the Ship is
      registered on the Actual Drawdown Date or change the classification or the
      Classification Society of the Ship except with the prior written consent
      of the Majority Lenders, such consent not to be unreasonably withheld, or
      do or allow to be done anything as a result of which such registration or
      classification might be imperiled or
cancelled;

            

    

     

    
      	
              (h)           

            	
              the
      Borrower shall not replace any Approved Manager or permit the appointment
      or replacement of any Approved Technical Submanager for the Ship or agree
      or consent to any material amendment or other modification of the terms of
      any of technical or commercial management agreements relating to the Ship,
      including any increase in the rate of compensation payable thereunder,
      except with the prior written consent of the Majority Lenders, such
      consent not to be unreasonably withheld; provided that, subject
      to the requirements of Clause 10.1(i), the Borrower may at any time
      and in its discretion replace the manager of the Ship with any Approved
      Manager and may permit any Approved Manager to appoint any Approved
      Technical Submanager with respect to the Ship or to replace any technical
      submanager of the Ship with any Approved Technical
    Submanager;

            

    

     

    
      	
              (i)           

            	
              the
      Borrower shall not permit any act, event or circumstance that would result
      in the Guarantor holding directly less than 100% of the Borrower’s
      equity;

            

    

     

    
      	
              (j)           

            	
              the
      Borrower shall not incur any Financial Indebtedness other than the Loan
      and pursuant to pursuant to the Junior
  Guarantee;

            

    

     

    
      	
              (k)           

            	
              the
      Borrower shall not declare or pay any dividends or return any capital to
      its equity holders or authorize or make any other distribution, payment or
      delivery of property 

            

       

      
        

        
          
            
               

            

            
              39

              
                

              

            

            
               

            

          

        

         

         

      

      	 	or
      cash to its equity holders, or redeem, retire, purchase or otherwise
      acquire, directly or indirectly, for value, any share of any class of its
      capital stock or other form of equity interest (or require any rights,
      options or warrants relating thereto but not including convertible debt)
      now or hereafter outstanding, or repay any subordinated shareholder loans
      or set aside any funds for any of the foregoing
  purposes;

    

     

    
      	
              (l)           

            	
              the
      Borrower shall not increase its capital by way of the creation of
      preference securities, further common or ordinary securities or otherwise
      howsoever, or create any new class of
equity;

            

    

     

    
      	
              (m)           

            	
              the
      Borrowers shall not permit any material amendment of or other modification
      to the Memorandum of Agreement or any Approved Charter, which, in the case
      of any Approved Charter, shall include any amendment or other modification
      of the day rates, the allocation of expenses or any provision relating to
      the term or termination of such Approved
  Charter;

            

    

     

    
      	
              (n)           

            	
              the
      Borrower shall not make any loan or advance to, make any investment in, or
      enter into any working capital maintenance or similar agreement with
      respect to any person, whether by acquisition of stock or indebtedness, by
      loan, guarantee or otherwise, except pursuant to the Junior
      Guarantee;

            

    

     

    
      	
              (o)           

            	
              the
      Borrower shall not acquire any capital assets (including any vessel other
      than the Ship) by purchase, charter or otherwise; provided that nothing in
      this Clause 10.2(o) shall prevent or be deemed to prevent capital
      improvements being made to the
Ship;

            

    

     

    
      	
              (p)           

            	
              the
      Borrower shall not enter into any arrangements, directly or indirectly,
      with any person whereby it shall sell or transfer, or shall be obligated
      to sell or transfer, any property, whether real or personal, and used or
      useful in its business, whether now owned or hereafter acquired, if at the
      time of such sale or disposition, the Borrower shall intend to lease or
      otherwise acquire the right to use or possess (except by purchase) such
      property or like property for a substantially similar
    purpose;

            

    

     

    
      	
              (q)           

            	
              the
      Borrower shall not change the jurisdiction of its incorporation or amend
      its organizational documents except in connection with a merger or
      consolidation that is not prohibited by the terms of
      Clause 10.2(b);

            

    

     

    
      	
              (r)           

            	
              the
      Borrower shall not change its name, type or jurisdiction of organization
      or location from the name, type or jurisdiction of organization, or
      location set forth on the signature pages to this Agreement or in
      Clause 9.1(a) or 9.19, as the case may be, without first giving at
      least 30 days’ prior written notice to the Agent and the Security Trustee
      and taking all action required by the Agent or the Security Trustee for
      the purpose of perfecting or protecting the security interest granted by
      the Security Documents; and

            

    

     

    
      	
              (s)           

            	
              the
      Guarantor shall not permit the appointment of any chief executive officer
      other than Mr. Evangelos Pistiolis without the prior written consent of
      the Majority Lenders.

            

    

     

    

    
      
        
           

        

        
          40

          
            

          

        

        
           

        

      

    

    

    
      	
              
                10.3   

              

            	
               Value
      Maintenance.

            

    

     

    
      	
              (a)           

            	
              If,
      at any time during the first two years following the Effective Date, the
      Fair Market Value of the Ship and any additional Collateral provided
      pursuant to this Clause 10.3(a) shall be less than 140% of the
      Required Fair Market Value as at such time, or if at any time thereafter,
      the Fair Market Value of the Ship and any additional Collateral provided
      pursuant to this Clause 10.3(a) shall be less than 130% of the Required
      Fair Market Value as at such time, the Agent (acting upon the instruction
      of the Majority Lenders) shall have the right to require the Borrower and
      the Guarantor, within 30 Business Days of the date of the written demand
      of the Agent therefor, either (i) to prepay the Loan in such amount as may
      be necessary to cause such Fair Market Value of the Ship to equal or
      exceed 140% or 130%, as the case may be, of the Required Fair Market Value
      as at such time or (ii) to provide such additional Collateral as may be
      acceptable to the Agent in its sole reasonable discretion (acting upon the
      instruction of the Majority Lenders) so that Fair Market Value of the Ship
      and additional Collateral provided pursuant to this Clause 10.3(a)
      shall equal or exceed 140% or 130%, as the case may be, of the Required
      Fair Market Value as at such time, and the Obligors shall comply with any
      such written demand made by the
Agent.

            

    

     

    
      	
              (b)           

            	
              Any
      prepayment required by this Clause 10.3 shall be subject to the
      requirements of Clauses 7.5, 7.6, 7.7, 7.8 and
  7.9.

            

    

     

    
      	
              10.4

            	
              Clear
      Market.  Without the prior written consent of the Agent,
      neither of the Obligors shall, and the Guarantor shall not permit any of
      its Affiliates to, syndicate or issue, attempt to syndicate or issue,
      announce or authorize the announcement of the syndication or issuance of,
      or engage in discussions concerning the syndication or issuance of, any
      debt facility or debt security (including any renewals thereof) for a
      period of two months following the date
hereof.

            

    

     

    
      	
              10.5  

            	
              Forward Freight
      Agreements.  Neither of the Obligors shall enter into any
      forward freight agreements with counterparties other than DVB Bank AG or
      its Affiliates without the prior written consent of the
    Agent.

            

    

     

    
      	
              11  

            	
              GUARANTY

            

    

     

    
      	
              11.1  

            	
              Guaranty.  To
      induce the Lenders to make the Loan to the Borrower, and to induce the
      Swap Bank to enter into Designated Transactions with the Borrower, the
      Guarantor hereby irrevocably and unconditionally guarantees (this “Guaranty”), as a primary
      obligor and not merely as a surety, the performance and punctual payment
      when due, whether at stated maturity, by acceleration or otherwise, of all
      Secured Liabilities of the Borrower now or hereafter existing under this
      Agreement and the other Finance Documents, whether for principal,
      interest, fees, expenses or otherwise (collectively, the “Guaranteed Obligations”)
      due or owing to the Credit Parties, and agrees to pay any and all expenses
      (including counsel fees and expenses) incurred by each Credit Party in
      enforcing any rights under this Guaranty.  The obligations of
      the Guarantor under this Guaranty are in addition to and shall not in any
      way be prejudiced by any other guaranty or security now or subsequently
      held by any Credit Party.

            

    

     

    

    
      
        
           

        

        
          41

          
            

          

        

        
           

        

      

    

    

    
      	
              11.2  

            	
              Obligations
      Absolute.  The Guarantor guarantees that the Guaranteed
      Obligations will be performed and paid to the Credit Parties strictly in
      accordance with the terms of any applicable agreement, express or implied,
      of the Borrower, regardless of any law, regulation or order of any
      jurisdiction affecting any term of any Guaranteed Obligation or the rights
      of the Credit Parties with respect thereto, including any law, rule or
      policy that is now or hereafter promulgated by any governmental authority
      (including any central bank) or regulatory body any of which may adversely
      affect the Borrower’s ability or obligation to make, or right of the
      Credit Parties to receive, such payments, including any sovereign act or
      circumstance that might otherwise constitute a defense to, or a legal or
      equitable discharge of, the
Borrower.

            

    

     

    
      	
              11.3  

            	
              Guaranty
      Unconditional.  The liability of the Guarantor hereunder
      shall be unconditional irrespective of, and the Guarantor hereby waives
      any defenses it may have with respect
to:

            

    

     

    
      	
              (a)           

            	
              any
      lack of validity or enforceability of any Guaranteed Obligation or
      agreement or instrument relating
thereto;

            

    

     

    
      	
              (b)           

            	
              any
      change in the time, manner or place of payment of, or in any other term
      of, any Guaranteed Obligation;

            

    

     

    
      	
              (c)           

            	
              any
      exchange, release or non-perfection of any other Collateral securing
      payment of any Guaranteed
Obligation;

            

    

     

    
      	
              (d)           

            	
              any
      moratorium, bankruptcy, insolvency or other similar law or any other law,
      regulation or order of any jurisdiction affecting any term of any
      Guaranteed Obligation or a Credit Party’s rights with respect thereto;
      or

            

    

     

    
      	
              (e)           

            	
              any
      other circumstance that might otherwise constitute a defense available to,
      or the discharge of, the Borrower or the
  Guarantor.

            

    

     

    
      	
              11.4  

            	
              Waiver of Subrogation;
      Contribution.  Notwithstanding any other provision of
      this Guaranty, until payment in full of the Guaranteed Obligations in cash
      and the termination of the commitments of the Lenders and the Swap Bank
      with respect thereto:

            

    

     

    
      	
              (a)           

            	
              the
      Guarantor hereby irrevocably waives any right to assert, enforce, or
      otherwise exercise any right of subrogation to any of the rights, security
      interests, claims, or liens that any Credit Party has or may have against
      the Borrower in respect of the Guaranteed
  Obligations;

            

    

     

    
      	
              (b)           

            	
              the
      Guarantor shall not have any right of recourse, reimbursements,
      contribution, indemnification, or similar right (by contract or otherwise)
      against the Borrower in respect of the Guaranteed Obligations;
      and

            

    

     

    
      	
              (c)           

            	
              the
      Guarantor hereby irrevocably waives any and all of the foregoing rights
      and also irrevocably waives the benefit of, and any right to participate
      in, any Collateral or other security given to the Credit Parties to secure
      payment of the Guaranteed
Obligations.

            

    

     

    

    
      
        
           

        

        
          42

          
            

          

        

        
           

        

      

    

    

    
      	
              11.5

            	
              Reinstatement.  This
      Guaranty shall continue to be effective or be reinstated, as the case may
      be, if at any time any payment of any of the Guaranteed Obligations is
      rescinded or must otherwise be returned by any Credit
    Party.

            

    

     

    
      	
              11.6  

            	
              Waiver.  The
      Guarantor waives promptness, diligence and notices with respect to any
      Guaranteed Obligation and this Guaranty and any requirement that a Credit
      Party exhaust any right or take any action against the Borrower or any
      other entity or any of its
property.

            

    

     

    
      	
              11.7  

            	
              Payments; No
      Reductions.

            

    

     

    
      	
              (a)           

            	
              All
      payments under this Guaranty shall be made in accordance with
      Clauses 12, 16, and 17 of this
Agreement.

            

    

     

    
      	
              (b)           

            	
              The
      Guarantor agrees to pay any and all taxes that arise from any payment made
      hereunder or from the execution, delivery or registration by such
      Guarantor of, or otherwise with respect to, this
  Agreement.

            

    

     

    
      	
              (c)           

            	
              The
      Guarantor shall indemnify each Credit Party in accordance with
      Clause 16.

            

    

     

    
      	
              (d)           

            	
              Within
      30 days after the date of any payment of taxes, the Guarantor shall
      furnish to each Credit Party at its address for notices, the original or a
      certified copy of a receipt evidencing payment thereof.  If no
      taxes are payable in respect of any payment, the Guarantor will furnish to
      each Credit Party a certificate from each appropriate taxing authority, or
      an opinion of counsel acceptable to each Credit Party, in either case
      stating that such payment is exempt from or not subject to
      taxes.

            

    

     

    
      	
              11.8  

            	
              Continuing
      Guarantee.  This Guaranty (a) is a continuing
      guaranty, (b) is joint and several with each other guarantee given in
      respect of the Guaranteed Obligations, (c) shall, subject to
      Clause 11.5, remain in full force and effect until the later of the
      termination of the Commitments under this Agreement and the payment in
      full of the Guaranteed Obligations and all other amounts payable pursuant
      to the Finance Documents and (d) shall be binding upon the Guarantor,
      its successors and permitted assigns.  The obligations of the
      Guarantor under this Guaranty shall rank pari passu with all other
      unsecured obligations of the
Guarantor.

            

    

     

    
      	
              12  

            	
              PAYMENTS
      AND CALCULATIONS

            

    

     

    
      	
              12.1  

            	
              Currency and Method of
      Payments.  All payments to be made by either Obligor
      under the Finance Documents shall be made to the
  Agent:

            

    

     

    
      	
              (a)           

            	
              not
      later than 10:00 a.m. (New York City time) on the due
  date;

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              (c)           

            	
              to
      the account and in favor of the Agent at HSBC Bank USA, New York, New
      York, ABA No. 021001088, SWIFT: MRMDUS33, for credit to 1700006231,
      Reference:  

            

       

      
        

        
          
            
               

            

            
              43

              
                

              

            

            
               

            

          

        

         

         

      

      	 	Top
      Ships, or to such other account with such other bank as the Agent may from
      time to time notify to the Obligors.

    

     

    
      	
              12.2  

            	
              Payment on a Non-Business
      Day.  If any payment by either Obligor under a Finance
      Document would otherwise fall due on a day that is not a Business
      Day:

            

    

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

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

            

    

     

    and
interest shall be payable during any extension under Clause 12.2(a) at the
rate payable on the original due date.

     

    
      	
              12.3  

            	
              Basis for Calculation of
      Periodic Payments.  All interest, commitment fees and any
      other payments under any Finance Document that are of an annual or
      periodic nature shall accrue from day to day and shall be calculated on
      the basis of the actual number of days elapsed and a 360-day
      year.

            

    

     

    
      	
              12.4  

            	
              Distribution of Payments to
      Credit Parties.  Subject to Clauses 12.2, 12.6 and
      12.7:

            

    

     

    
      	
              (a)           

            	
              each
      amount received by the Agent under a Finance Document for distribution or
      remittance to a Lender shall be made available by the Agent to such Lender
      by payment to such account indicated by notice from such Lender to the
      Agent not less than five Business Days prior to the date on which such
      payment is to be made; and

            

    

     

    
      	
              (b)           

            	
              amounts
      to be applied in satisfaction of amounts of a particular category that are
      due to the Lenders generally shall be distributed by the Agent to each
      Lender pro rata to the amount in that category that is due to
      it.

            

    

     

    
      	
              12.5  

            	
              Permitted Deductions by
      Agent.  Notwithstanding any other provision of this
      Agreement or any other Finance Document to the contrary, the Agent may, to
      the extent permitted by applicable law and before making an amount
      available to a Lender, deduct and withhold from that amount any sum that
      is then due and payable to the Agent from such Lender under any Finance
      Document or any sum that the Agent is then entitled under any Finance
      Document to require such Lender to pay on
  demand.

            

    

     

    
      	
              12.6  

            	
              Agent Only Obliged to Pay
      Monies Received.  Notwithstanding any other provision of
      this Agreement or any other Finance Document to the contrary, the Agent
      shall not be obligated to make available to the Borrower or any Lender any
      sum that the Agent is expecting to receive for remittance or distribution
      to the Borrower or that Lender until the Agent has satisfied itself that
      it has actually received that sum.

            

    

     

    
      	
              12.7  

            	
              Refund to Agent of Monies Not
      Received.  Except as is otherwise provided in
      Clause 3.4(b) of this Agreement, if and to the extent that the Agent
      makes available a sum to the Borrower or a Lender without first having
      received that sum, the Borrower or (as the case may be) the Lender
      concerned shall, on demand:

            

    

     

    
      	
              (a)           

            	
              refund
      the sum in full to the Agent; and

            

    

     

    

    
      
        
           

        

        
          44

          
            

          

        

        
           

        

      

    

    

    
      	
              (b)           

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

            

    

     

    
      	
              12.8  

            	
              Agent May Assume
      Receipt.  Clause 12.7 shall not affect any claim
      that the Agent has under the law of restitution, and applies irrespective
      of whether the Agent had any form of notice that it had not received the
      sum that it made available (except an express notice from a Lender that it
      will not fund its Ratable Portion of the
  Advance).

            

    

     

    
      	
              12.9  

            	
              Credit Party
      Accounts.  Each Credit Party shall maintain accounts
      showing the amounts owing to it by the Borrower under the Finance
      Documents and all payments in respect of those amounts made by the
      Obligors.

            

    

     

    
      	
              12.10  

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

            

    

     

    
      	
              12.11  

            	
              Accounts Prima
      Facie
      Evidence.  If the accounts maintained under
      Clauses 12.9 and 12.10 show an amount to be owing by any Obligor to a
      Credit Party, those accounts shall be prima facie evidence
      that that amount is owing to that Credit
Party.

            

    

     

    
      	
              13  

            	
              APPLICATION
      OF RECEIPTS

            

    

     

    
      	
              13.1  

            	
              Normal Order of
      Application.  Except as this Agreement or any other
      Finance Document may otherwise provide, any sums that are received or
      recovered by the Agent or the Security Trustee under or by virtue of any
      Finance Document shall be paid to the account of the Agent identified in
      Clause 12.1(c) and applied by the Agent in the following
      manner:

            

    

     

    
      	
               
      

            	
              FIRST:

            	
              in
      or towards payment of all sums (other than principal of the Loan or
      interest owing in respect thereof or amounts due under the Master
      Agreement) that may be owing to any Credit Party under this Agreement and
      the other Finance Documents (or any of them), including any amounts due
      under Clause 16;

            

    

     

    
      
        	 	
                SECOND:

              	
                in
      or towards payment of any accrued default interest due but unpaid under
      Clause 6;

              

      

    

     

    
      	
               
      

            	
              THIRD:

            	
              in
      or towards payment of any accrued interest due but unpaid under
      Clause 4;

            

    

     

    
      
        	 	
                FOURTH:

              	
                in
      or towards payment, on a pro rata basis, of any amounts then due under the
      Master Agreement and any principal due but unpaid under Clause 7,
      provided that any
      amounts in payment of any principal due under Clause 7 shall be
      applied to the outstanding principal balance of the Loan as provided
      therein;

              

      

    

     

    
      	
               
      

            	
              FIFTH:

            	
              in
      or towards payment of the balance (if any) of the Outstanding
      Indebtedness; and

            

    

     

    
      	
               
      

            	
              SIXTH:

            	
              any
      surplus shall be paid to the Borrower as it
  directs.

            

    

     

    

    
      
        
           

        

        
          45

          
            

          

        

        
           

        

      

    

    

    
      	
              13.2

            	
              Application of Credit
      Balances.  Each Credit Party may, upon not less than
      seven days’ prior notice to each Obligor or, to the extent permitted by
      applicable law, without prior notice if an Event of Default shall have
      occurred and be continuing:

            

    

     

    
      	
              (a)           

            	
              apply
      any balance (whether or not then due) that at any time shall be standing
      to the credit of any account in the name of any Obligor at any office of
      such Credit Party in any country in or towards satisfaction of any sum
      then due from that Obligor to such Credit Party under any of the Finance
      Documents; and

            

    

     

    
      	
              (b)           

            	
              for
      that purpose:

            

    

     

    
      	
              (i)    
             

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

            

    

     

    
      	
              (ii)   
             

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

            

    

     

    
      	
              (iii)       
        

            	
              enter
      into any other transaction or make any entry with regard to the credit
      balance that such Credit Party considers
  appropriate.

            

    

     

    Each
Credit Party (other than the Agent) shall promptly notify the Agent of each
amount applied pursuant to this Clause 13.2 in or towards satisfaction of
any sum then due from any Obligor to such Credit Party under any of the Finance
Documents.

     

    
      	
              13.3  

            	
              Other Rights
      Unaffected.  A Credit Party shall not be obliged to
      exercise any of its rights under Clause 13.2 and those rights shall
      be without prejudice and in addition to any right of set-off, combination
      of accounts, charge, lien or other right or remedy to which such Credit
      Party is entitled (whether under the general law or any
      document).

            

    

     

    
      	
              13.4  

            	
              Payments in Excess of Ratable
      Share.  If any Lender shall obtain any payment (whether
      voluntary, involuntary, through the exercise of any right of set-off,
      counterclaim or otherwise) on account of its portion of the Loan and in
      excess of its ratable share of payments on account of the Loan obtained by
      all the Lenders, such Lender shall forthwith purchase from the other
      Lenders such participation in their respective portions of the Loan as
      shall be necessary to share the excess payment ratably with each of them;
      provided that if
      all or any portion of such excess payment shall be thereafter recovered by
      any other Lender from the purchasing Lender, such purchase from such other
      Lender shall be rescinded and such other Lender shall repay to the
      purchasing Lender the purchase price to the extent of such recovery
      together with an amount equal to such Lender’s ratable share (according to
      the proportion of (a) the amount of such Lender’s required repayment
      to (b) the total amount so recovered from the purchasing Lender) of
      any interest or other amount paid or payable by the purchasing Lender in
      respect of the total amount so recovered.  The Borrower agrees
      that any Lender so purchasing a participation from another Lender pursuant
      to this Clause 13.4 may, to the fullest extent permitted by law,
      exercise all of its rights of payment (including any right of set-off)
      with respect to such participation as fully as if such Lender were the
      direct creditor of the Borrower in the amount of such
      participation.  Notwithstanding the preceding sentences of this
      Clause 13.4, any Lender that shall have commenced or joined (as a
      plaintiff) in an action or proceeding in any court to recover sums due to
      it under this Agreement or any other Finance Document and pursuant to a
      judgment obtained therein or a settlement or compromise of that
      action or proceeding shall have received any amount, shall not be
      

            

       

      
        

        
          
            
               

            

            
              46

              
                

              

            

            
               

            

          

        

         

      

      	 	
              required
      to share any proportion of that amount with any Lender that shall have had
      the legal right to, but shall not have joined such action or proceeding or
      commenced and diligently prosecuted a separate action or proceeding to
      enforce its rights in the same or another court.  Each Lender
      exercising or contemplating exercising any right giving rise to a receipt
      or receiving any payment of the type referred to in this Clause 13.4
      or instituting legal proceedings to recover sums owing to it under this
      Agreement shall, as soon as reasonably practicable thereafter, give notice
      thereof to the Agent, which shall give notice thereof to the other
      Lenders.

            

    

     

    
      	
              14  

            	
              EVENTS
      OF DEFAULT

            

    

     

    
      	
              14.1  

            	
              Events of
      Default.  There shall be an Event of Default
      if:

            

    

     

    
      	
              (a)           

            	
              any
      sum payable under this Agreement or any of the other Finance Documents
      shall not be paid when due; or

            

    

     

    
      	
              (b)           

            	
              either
      Obligor or any other party (other than a Credit Party) shall commit any
      breach of or fail to perform any of its obligations, covenants or
      undertakings in this Agreement or any other Finance Document (except as
      provided in Clause 14.1(a)) or any event of default, or any event or
      circumstance that with the giving of any notice, the lapse of time or both
      would constitute an event of default, shall occur under any other Finance
      Document; or

            

    

     

    
      	
              (c)           

            	
              any
      representation or warranty made by either Obligor or any other party
      (other than a Credit Party) in or pursuant to this Agreement or any other
      Finance Document shall prove to have been incorrect in any material
      respect when made or deemed made or confirmed;
  or

            

    

     

    
      	
              (d)           

            	
              any
      principal of or interest on any Financial Indebtedness of either Obligor
      (other than the Financial Indebtedness payable pursuant to this Agreement
      or any other Finance Document) shall not be paid when due, subject to any
      agreed cure period but only so long as cure shall be made in accordance
      with the terms thereof and in any event on or before the thirtieth day
      after such principal or interest shall be due;
  or

            

    

     

    
      	
              (e)           

            	
              any
      event of default, or any event or circumstance that, with the giving of
      any notice, the lapse of time or both would constitute an event of
      default, shall occur under any agreement (other than the Finance
      Documents) to which either of the Obligors or a Principal Subsidiary is a
      party, including any charter party or other contract of employment for the
      Ship; or

            

    

     

    
      	
              (f)           

            	
              any
      of the consents referred to in Clause 9.3 shall be modified in a
      manner that shall be unacceptable to the Majority Lenders, shall be
      revoked or terminated, shall expire and not be renewed, or otherwise shall
      cease to be in full force and effect;
or

            

    

     

    
      	
              (g)           

            	
              either
      Obligor shall suspend payment of its debts or shall be unable or shall
      admit its inability to pay its debts as they fall due or any proceeding
      shall be commenced by or against either Obligor for a composition or other
      arrangement for the benefit of its creditors generally relating to
      reconstruction or readjustment of it or its debts or any
  

            

       

      

        
          
             

          

          
            47

            
              

            

          

          
             

          

        

      

       

       

      	 	similar
      process or proceeding shall be instituted by or against either Obligor
      under the laws of any relevant jurisdiction;
or

    

     

    
      	
              (h)           

            	
              either
      Obligor shall take any action or any legal proceedings shall be started or
      other steps shall be taken for:

            

    

     

    
      	
              (i)  
               

            	
              such
      Obligor to be adjudicated or found bankrupt or
  insolvent;

            

    

     

    
      	
              (ii)    
            

            	
              the
      winding-up or dissolution of such Obligor;
or

            

    

     

    
      	
              (iii)   
            

            	
              the
      appointment of a liquidator, trustee, receiver or similar officer of such
      Obligor or of the whole or any part of its undertakings, assets, rights or
      revenues or any similar process or proceeding shall be instituted under
      the laws of any relevant jurisdiction;
or

            

    

     

    
      	
              (i)     
            

            	
              either
      Obligor ceases or threatens to cease to carry on its business except, with
      respect to the Borrower, in the case of a sale or a proposed sale of the
      Ship; or

            

    

     

    
      	
              (j)     
            

            	
              all
      or a material part of the undertakings, assets, rights or revenues of, or
      shares or other ownership interest in, either Obligor shall be seized,
      nationalized, expropriated or compulsorily acquired by or under authority
      of any government; or

            

    

     

    
      	
              (k)           

            	
              a
      creditor shall attach or take possession of, or a distress, execution,
      sequestration or process (each an “action”) shall be levied
      or enforced upon or sued out against, a material part of the undertakings,
      assets, rights or revenues of either Obligor in relation to a claim by
      such creditor and such action shall not have been lifted, vacated,
      released or expunged, or substitute security posted, within 10 Business
      Days of such action having been instituted;
or

            

    

     

    
      	
              (l)    
             

            	
              the
      Guarantor shall cease to be the legal and beneficial owner of all of the
      issued and outstanding shares of the Borrower;
  or

            

    

     

    
      	
              (m)          

            	
              the
      Ship shall be a Total Loss and insurance proceeds with respect to such
      Total Loss shall not be collected or received by the Security Trustee
      within 150 days thereafter; or

            

    

     

    
      	
              (n)           

            	
              any
      provision of this Agreement shall cease to be valid and binding on or
      enforceable against either Obligor or such Obligor shall so state in
      writing, or any other Finance Document executed and delivered by either
      Obligor shall for any reason cease to be valid and binding on or
      enforceable against such Obligor or any such Obligor shall so state in
      writing; or

            

    

     

    
      	
              (o)           

            	
              any
      Security Document shall cease for any reason (other than pursuant to the
      terms thereof) after the execution and delivery thereof to create (i) in
      the case of the Mortgage, a valid first priority preferred mortgage under
      the laws of the Republic of Liberia on the Ship described therein or (ii)
      in the case of the Earnings Assignment, Insurance Assignment or Charter
      Assignment, a valid first-priority perfected lien on the Collateral
      described therein; or

            

    

     

    

    
      
        
           

        

        
          48

          
            

          

        

        
           

        

      

    

    

    
      	
              (p)           

            	
              any
      Approved Charter shall cease to be in full force and effect at any time
      after such Approved Charter shall have been executed and delivered by the
      parties thereto; or

            

    

     

    
      	
              (q)           

            	
              it
      shall be impossible or unlawful:

            

    

     

    
      	
              (i)    
             

            	
              for
      either Obligor or any other party (other than a Credit Party) to fulfill
      any of the covenants and obligations contained in this Agreement or any
      other Finance Document; or

            

    

     

    
      	
              (ii)    
            

            	
              for
      any Credit Party to exercise any of the rights vested in it under this
      Agreement or any other Finance Documents;
or

            

    

     

    
      	
              (r)           

            	
              in
      the reasonable opinion of the Majority Lenders, a material adverse change
      in the financial condition of either Obligor shall occur;
    or

            

    

     

    
      	
              (s)           

            	
              any
      other event occurs or circumstance shall occur that, in the reasonable
      opinion of the Majority Lenders, shall likely materially and adversely
      affect:

            

    

     

    
      	
              (i)    
             

            	
              the
      ability of either Obligor or any other party (other than a Credit Party)
      to perform all or any of its respective obligations under or otherwise to
      perform its obligations under this Agreement or any other Finance
      Document; or

            

    

     

    
      	
              (ii)   
             

            	
              the
      security created by any Collateral.

            

    

     

    
      	
              14.2  

            	
              Actions Following an Event of
      Default.  If at any time an Event of Default shall have
      occurred and be continuing, the Agent may and, if so instructed by the
      Majority Lenders, shall:

            

    

     

    
      	
              (a)           

            	
              serve
      on the Borrower a notice stating that all obligations of the Lenders to
      the Borrower under this Agreement are terminated at which time such
      obligations shall immediately terminate without any further action by any
      party hereto; provided that if any Event of Default described in either of
      Clauses 14.1(g) and 14.1(h) shall have occurred and be continuing,
      such obligations shall be deemed immediately terminated without notice
      thereof or any other action by any party
hereto;

            

    

     

    
      	
              (b)           

            	
              serve
      on the Borrower a notice stating that the Loan, all accrued interest and
      all other amounts accrued or owing under this Agreement are immediately
      due and payable at which time the Loan, all accrued interest and all other
      amounts accrued or owing by the Obligors under this Agreement and the
      other Finance Documents shall become immediately due and payable, and the
      Security Trustee shall be entitled to enforce the Security Interests
      created by this Agreement and the other Finance Documents in any manner
      available to it and in such sequence as the Security Trustee may, in its
      absolute discretion, determine; provided that if any
      Event of Default described in either of Clauses 14.1(g) and 14.1(h)
      shall have occurred and be continuing, the Loan, all such accrued interest
      and all such other amounts shall become immediately due and payable and
      the Security Trustee shall be entitled to enforce the Security Interests
      as provided herein, in each case without notice or demand therefor or any
      other action by any party hereto;
and

            

    

     

    

    
      
        
           

        

        
          49

          
            

          

        

        
           

        

      

    

    

    
      	
              (c)           

            	
              take
      such other actions that, as a result of such Event of Default or any
      notice served pursuant to paragraph (a) or (b) above, a Credit Party
      shall be entitled to take under any Finance Document or any applicable
      law.

            

    

     

    
      	
              14.3  

            	
              Multiple Notices; Action
      without Notice.  The Agent may serve notices pursuant to
      Clauses 14.2(a) and 14.2(b) simultaneously or at different times and
      may take any action referred to in either such Clause even if no such
      notice is served or simultaneously with or at any time after the service
      of both or either of such notices.

            

    

     

    
      	
              15  

            	
              FEES
      AND EXPENSES

            

    

     

    
      	
              15.1  

            	
              Commitment
      Fee.  The Borrower shall pay to the Agent for the account
      of each Lender a commitment fee equal to 0.50% per annum of the undrawn
      portion of the Commitment of such Lender from the Effective Date (in the
      case of any Initial Lender) and from the effective date specified in the
      Assignment and Acceptance pursuant to which it became a Lender (in the
      case of each other Lender) until the end of the Availability Period,
      payable in arrears on the last day of the Availability
    Period.

            

    

     

    
      	
              15.2  

            	
              Other
      Fees.  The Guarantor shall pay to DVB Bank America N.V.
      for its own account such fees as may from time to time be agreed by DVB
      Bank America N.V. and the
Guarantor.

            

    

     

    
      	
              15.3  

            	
              Costs of Negotiation,
      Preparation, Etc.  The Borrower shall pay to the Agent on
      demand the amount of all out-of-pocket expenses incurred by the Agent and
      each other Credit Party in connection with the negotiation, preparation,
      execution, registration and enforcement of each Finance Document and
      related document and each transaction contemplated by any Finance Document
      or related document, including the reasonable fees and disbursements of
      each Credit Party’s legal counsel and any local counsel retained by
      them.

            

    

     

    
      	
              15.4  

            	
              Costs of Variations,
      Amendments, Enforcement, Etc.  The Borrower shall pay to
      the Agent on demand the amount of all expenses incurred by the Credit
      Parties (including the legal fees and disbursements of counsel to the
      Credit Parties) in connection with:

            

    

     

    
      	
              (a)           

            	
              each
      amendment or supplement to any Finance Document, and each proposal for any
      such amendment or supplement regardless of whether or not such amendment
      or supplement shall become
effective;

            

    

     

    
      	
              (b)           

            	
              each
      consent or waiver by any Credit Party under or in connection with any
      Finance Document, and each request for any such waiver or consent
      regardless of whether or not such waiver or consent shall be
      given;

            

    

     

    
      	
              (c)           

            	
              the
      valuation of or any other matter relating to the Collateral or the Ship;
      and

            

    

     

    
      	
              (d)           

            	
              each
      action taken by a Credit Party for the protection, exercise or enforcement
      of any right or Security Interest created by any Finance Document or for
      any similar purpose.

            

    

     

    
      	
              15.5  

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

            

    

     

    

    
      
        
           

        

        
          50

          
            

          

        

        
           

        

      

    

    

    
      	
              16  

            	
              INDEMNITIES

            

    

     

    
      	
              16.1  

            	
              Indemnities Regarding Borrowing
      and Repayment of Loan.  The Borrower shall indemnify each
      Lender on demand for any and all expenses, liabilities and losses incurred
      by such Lender as a result of or in connection
  with:

            

    

     

    
      	
              (a)           

            	
              the
      Advance not being borrowed on the Expected Drawdown Date specified in the
      Drawdown Notice for any reason other than a default by such
      Lender;

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              (c)           

            	
              any
      failure (for whatever reason) by the Borrower to make payment of any
      amount due under any Finance Document on the due date (after giving credit
      for any default interest paid by the Borrower on the amount
      concerned);

            

    

     

    
      	
              (d)           

            	
              the
      occurrence and continuance of any Event of Default or Potential Event of
      Default and the acceleration of repayment of the Loan or any other amounts
      pursuant to Clause 14; and

            

    

     

    
      	
              (e)           

            	
              any
      tax (other than tax on its overall net income imposed by a taxing
      jurisdiction in which such Lender is organized, holds or books the Loan or
      has a principal place of business) for which such Lender is liable in any
      jurisdiction directly in connection with any amount paid or payable to
      such Credit Party under any Finance
Document.

            

    

     

    
      	
              16.2  

            	
              Breakage
      Costs.  Without limiting its generality of
      Clause 16.1, the expenses, liabilities and losses indemnified by the
      Borrower pursuant to Clause 16.1 shall include those incurred by each
      Lender:

            

    

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              16.3  

            	
              Miscellaneous
      Indemnities.  The Borrower shall indemnify each Credit
      Party for any and all claims, demands, proceedings, liabilities, taxes,
      losses and expenses of every kind that may be made or brought against, or
      incurred by, such Credit Party, in any country, in relation
      to:

            

    

     

    
      	
              (a)           

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

            

    

     

    

    
      
        
           

        

        
          51

          
            

          

        

        
           

        

      

    

    

    
      	
              (b)           

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

            

    

     

    other
than such claims, demands, proceedings, liabilities, taxes, losses and expenses
that are shown to have been caused by the gross negligence or willful misconduct
of such Credit Party’s own officers or employees.

     

    
      	
              16.4  

            	
              Other
      Indemnities.  The Borrower shall indemnify each Credit
      Party for any and all reasonable expenses, liabilities and losses incurred
      by such Credit Party as a result of or in connection with the enforcement
      (whether through negotiations, legal proceedings or otherwise) of the
      Finance Documents and any other document to be delivered
      hereunder.

            

    

     

    
      	
              16.5  

            	
              Currency
      Indemnity.  If any amount payable by either Obligor to
      any Credit Party pursuant to any Finance Document or pursuant to any order
      or judgment relating to any Finance Document shall be converted from the
      currency in which the Finance Documents require such amount to be paid
      (the “Contractual
      Currency”) into another currency (the “Payment Currency”) for
      the purpose of:

            

    

     

    
      	
              (a)           

            	
              making
      or lodging any claim or proof against the Borrower, whether in
      liquidation, bankruptcy, insolvency or otherwise;
  or

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              (c)           

            	
              enforcing
      any such order or judgment,

            

    

     

    the
Borrower shall indemnify such Credit Party on demand against any and all losses
arising when the amount of the payment actually received by such Credit Party is
converted at the available rate of exchange into the Contractual
Currency.  In this Clause 16.5, the “available rate of exchange”
means the rate at which the Credit Party concerned shall be able at the opening
of business (London time) on the Business Day after it shall have received such
amount concerned to purchase the Contractual Currency with the Payment
Currency.  This Clause 16.5 creates a separate liability of the
Borrower that is distinct from its other liabilities under the Finance Documents
and that shall not be merged in any judgment or order relating to those other
liabilities.

     

    
      	
              16.6  

            	
              Increased
      Costs.

            

    

     

    
      	
              (a)           

            	
              If,
      due to either

            

    

     

    
      	
              (i)        
         

            	
              the
      introduction of or any change in or in the interpretation of any law or
      regulation; or

            

    

     

    
      	
              (ii)      
          

            	
              the
      compliance by any Lender with any guideline or request from any central
      bank or other governmental authority after the date hereof (whether or not
      having the force of law);

            

    

     

    
      	
               
      

            	
              there
      shall be

            

    

     

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 
      

              	
                (x)

              	
                imposed,
      modified or deemed applicable any reserve, special deposit or similar
      requirement against assets held by, or deposits in or for the account of,
      any Lender;

              

      

       

    

    
      	
               
      

            	
              (y)

            	
              imposed
      on any Lender any tax of any kind whatsoever with respect to this
      Agreement or the Advance made by it, or any change in the basis of
      taxation of payments to any Lender in respect thereof (except for taxes
      indemnified pursuant to Clause 17);
or

            

    

     

    
      	
               
      

            	
              (z)

            	
              imposed
      on any Lender any other condition relating to this Agreement or the
      Advance made by it;

            

    

     

    and the
result of any event referred to in paragraph (x), (y) or (z) of this
Clause 16.6(a) shall be to increase the cost to such Lender of agreeing to
make or making, funding or maintaining the Advance or to reduce any amount
received or receivable by any Lender hereunder or under any Finance Document
(whether of principal, interest or any other amount), then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Agent) made within 60 days after the first date on which such Lender has actual
knowledge that it is entitled to make demand for payment under this
Clause 16.6(a), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided that:

     

    
      	
               
      

            	
              (A)

            	
              if
      such Lender fails to so notify the Borrower within such 60-day period,
      such increased cost shall commence accruing on such later date on which
      the Lender notifies the Borrower;
and

            

    

     

    
      	
               
      

            	
              (B)

            	
              before
      making any such demand, such Lender agrees to use reasonable efforts
      (consistent with its internal policy and legal and regulatory
      restrictions) to designate a different Lending Office if the making of
      such a designation would avoid the need for, or reduce the amount of, such
      increased cost and would not, in the reasonable judgment of such Lender,
      be otherwise disadvantageous to such
Lender.

            

    

     

    Each
Lender, upon determining that additional amounts needed to compensate it for
such increased cost are payable by the Borrower pursuant to this
Clause 16.6(a), shall give prompt written notice thereof to the Borrower
and the Agent, which notice shall include a certificate submitted to the
Borrower and the Agent by such Lender setting forth in reasonable detail the
basis for and the calculation of such increased cost (such certificate shall be
conclusive and binding for all purposes, absent manifest error), although the
failure to give any such notice shall not release or diminish any Borrower’s
obligations to pay such increased cost pursuant to this
Clause 16.6(a).

     

    
      	
              (b)           

            	
              If
      any Lender shall determine that compliance with any law or regulation or
      any guideline or request from any central bank or other governmental or
      monetary authority in regard to capital adequacy (whether or not having
      the force of law) including any guideline contemplated by the report dated
      July 1988 entitled “International Convergence of Capital Management and
      Capital Standards” issued by the Bank Committee on Banking Regulations and
      Supervisory Practices, in any case 

            

       

      
        

        
          
            
               

            

            
              53

              
                

              

            

            
               

            

          

        

         

      

      	 	
              in
      which such law, regulation, guideline or request shall have become
      effective or shall have been made after the date hereof, shall or would
      have the effect of reducing the rate of return on the capital of, or
      maintained by, such Lender or any person controlling such Lender as a
      consequence of such Lender making its ratable portion of the Advance or
      Commitment hereunder and other commitments of this type, by increasing the
      amount of capital required or expected to be maintained by such Lender or
      any person controlling such Lender, to a level below that which such
      Lender or any person controlling such Lender could have achieved but for
      such adoption, effectiveness, change or compliance (taking into account
      such Lender’s or such person’s policies with respect to capital adequacy),
      then the Borrower shall, from time to time, pay such Lender, upon demand
      by such Lender made within 60 days after the first date on which such
      Lender has actual knowledge that it is entitled to make demand for payment
      under this Clause 16.6(b) of such reduction in return, such
      additional amount as may be specified by such Lender as being sufficient
      to compensate such Lender for such reduction in return, to the extent that
      such Lender reasonably determines such reduction to be attributable to the
      existence of such Lender’s commitment to lend hereunder; provided that if such
      Lender fails to so notify the Borrower within such 60 day period, such
      amounts shall commence accruing on such later date on which such Lender
      notifies the Borrower.  A certificate as to such amounts
      submitted to the Borrower by a Lender shall be conclusive and binding for
      all purposes, absent manifest
error.

            

    

     

    
    

    
      	
              17  

            	
              NO
      SET-OFF OR TAX DEDUCTION

            

    

     

    
      	
              17.1  

            	
              No
      Deductions.  All amounts due from either Obligor under
      any Finance Document shall be paid:

            

    

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              17.2  

            	
              Grossing-Up for
      Taxes.  If either Obligor shall be required by law to
      make a tax deduction from any
payment:

            

    

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              (c)           

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

            

    

     

    
      	
              17.3  

            	
              Evidence of Payment of
      Taxes.  Within 30 days after making any tax deduction, an
      Obligor shall deliver to the Agent documentary evidence satisfactory to
      the Agent that the tax shall have been paid to the appropriate taxation
      authority.

            

    

     

    
       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

         

      

    

     

    
      	
              17.4  

            	
              Exclusion of Tax on Overall Net
      Income.  In this Clause 17, “tax deduction” means any
      deduction or withholding for or on account of any present or future tax
      except tax on a Credit Party’s overall net income imposed by a taxing
      jurisdiction in which such Credit Party is organized, holds or books the
      Loan (as applicable) or has a principal place of
  business.

            

    

     

    
      	
              18  

            	
              ILLEGALITY

            

    

     

    If any
Lender shall notify the Borrower that it shall have become, or shall with effect
from a specified date become:

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

            	
              contrary
      to, or inconsistent with, any
regulation;

            

    

     

    for such
Lender to maintain or give effect to any of its obligations under this Agreement
in the manner contemplated by this Agreement, such Lender’s obligation to make
available its Commitment shall terminate; and thereupon or, if later, on the
date specified in such Lender’s notice as the date on which the notified event
shall become effective, the Borrower shall prepay to such Lender that portion of
the Loan payable to such Lender plus all amounts otherwise payable under
Clause 7.

     

    
      	
              19  

            	
              ASSIGNMENTS
      AND PARTICIPATIONS; CHANGES IN LENDING
OFFICE

            

    

     

    
      	
              19.1  

            	
              Assignment by
      Borrower.  Except as permitted by Clause 10.2(b), no
      Obligor may, without the consent of the Majority
  Lenders:

            

    

     

    
      	
              (a)           

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

            

    

     

    
      	
              (b)           

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

            

    

     

    
      	
              19.2  

            	
              Assignments by Lenders;
      Participations.

            

    

     

    
      	
              (a)           

            	
              Each
      Lender may at its own expense assign to a bank or other entity all or a
      portion of its rights and obligations under this Agreement (including all
      or a portion of its Commitment, the Advance owing to it and the Notes held
      by it, if any), provided
      that:

            

    

     

    
      	
              (i)    
             

            	
              each
      such assignment shall be of a uniform, and not a varying, percentage of
      all rights and obligations under this Agreement and the other Finance
      Documents;

            

    

     

    
      	
              (ii)   
             

            	
              except
      in the case of an assignment of all of such Lender’s rights and
      obligations under this Agreement or an assignment to a person that,
      immediately prior to such assignment, shall also be a Lender, the amount
      of the Commitment of the assigning Lender being assigned pursuant to each
      such assignment (determined as of the date of the Assignment and
      

            

       

      

        
          
             

          

          
            55

            
              

            

          

          
             

          

        

      

       

       

      	 	Acceptance
      with respect to such assignment) shall in no event be less than $5,000,000
      and shall be an integral multiple of $1,000,000 in excess
    thereof;

    

     

    
      	
              (iii)   
            

            	
              each
      such assignment shall be to (A) an Eligible Assignee acceptable to
      the Borrower, which acceptance the Borrower shall not unreasonably
      withhold, condition or delay, (B) another Lender or (C) an
      Affiliate of the assigning Lender or an Eligible
  Assignee;

            

    

     

    
      	
              (iv)    
           

            	
              the
      parties to each such assignment shall execute and deliver to the Agent,
      for its acceptance and recording in the Register, an Assignment and
      Acceptance, together with the Notes (if any) subject to such assignment
      and a processing and recordation fee of $5,000 payable by the assigning
      Lender; and

            

    

     

    
      	
              (v)           

            	
              after
      giving effect to each such assignment, there shall be no more than five
      Lenders.

            

    

     

    Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (y) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(other than its rights under Clauses 15, 16, and 17 to the extent any claim
thereunder relates to an event arising prior to or in connection with such
assignment) and be released from its further obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).

     

    
      	
              (b)           

            	
              By
      executing and delivering an Assignment and Acceptance, the assigning
      Lender thereunder and the assignee thereunder confirm to and agree with
      each other and the other parties hereto as
  follows:

            

    

     

    
      	
              (i)     
            

            	
              other
      than as provided in such Assignment and Acceptance, such assigning Lender
      makes no representation or warranty and assumes no responsibility with
      respect to any statements, warranties or representations made in or in
      connection with this Agreement or the execution, legality, validity,
      enforceability, genuineness, sufficiency or value of this Agreement or any
      other instrument or document furnished pursuant
  hereto;

            

    

     

    
      	
              (ii)    
            

            	
              such
      assigning Lender makes no representation or warranty and assumes no
      responsibility with respect to the financial condition of either Obligor
      or the performance or observance by either Obligor of any of its
      obligations under this Agreement, any other Finance Document or any other
      instrument or document furnished pursuant hereto or
    thereto;

            

    

     

    
      	
              (iii)     
          

            	
              such
      assignee confirms that it has received a copy of this Agreement, together
      with copies of all financial statements referred to or delivered in
      accordance with Clauses 9.9 and 10.1(f) and such other documents and
      information as it 

            

       

      
         

        
          
            
               

            

            
              56

              
                

              

            

            
               

            

          

        

         

      

       

      	 	deems
      appropriate to make its own credit analysis and decision to enter into
      such Assignment and Acceptance;

    

    
       

    

    
    

    
      	
              (iv)          

            	
              such
      assignee will, independently and without reliance upon the Agent, the
      Security Trustee, the Swap Bank, the assigning Lender or any other Lender
      and based on such documents and information as it shall deem appropriate
      at the time, continue to make its own credit decisions in taking or not
      taking action under this Agreement;

            

    

     

    
      	
              (v)           

            	
              such
      assignee confirms that it is another Lender, an Affiliate of the assigning
      Lender or an Eligible Assignee;

            

    

     

    
      	
              (vi)          

            	
              such
      assignee appoints and authorizes the Agent to take such action as agent on
      its behalf and to exercise such powers under this Agreement as are
      delegated to the Agent by the terms hereof, together with such powers as
      are reasonably incidental thereto;

            

    

     

    
      	
              (vii)         

            	
              such
      assignee agrees that it shall perform in accordance with their terms all
      of the obligations which by the terms of this Agreement are required to be
      performed by it as a Lender; and

            

    

     

    
      	
              (viii)        

            	
              such
      assigning Lender and such assignee represent and warrant that such
      assignment is not in violation of any applicable law, including any
      securities law.

            

    

     

    
      	
              (c)           

            	
              The
      Agent shall maintain at its address referred to in Clause 21.2 a copy
      of each Assignment and Acceptance delivered to and accepted by it and a
      register for the recordation of the names and addresses of the Lenders and
      the Commitment of, and principal amount of the Advance owing to, each
      Lender from time to time (the “Register”).  The
      entries in the Register shall be conclusive and binding for all purposes,
      absent manifest error, and the Borrower, the Guarantor, the Agent, the
      Security Trustee and the Lenders may treat each person whose name is
      recorded in the Register as a Lender hereunder for all purposes of this
      Agreement and the Security Documents.  The Register shall be
      available for inspection by the Borrower or any Lender at any reasonable
      time and from time to time upon reasonable prior
  notice.

            

    

     

    
      	
              (d)           

            	
              Upon
      its receipt of an Assignment and Acceptance executed by an assigning
      Lender and an assignee, the Agent shall, if such Assignment and Acceptance
      has been completed and is in substantially the form of Appendix H,
      (i) accept such Assignment and Acceptance, (ii) record the
      information contained therein in the Register and (iii) give prompt
      notice thereof to the Borrower and the
  Guarantor.

            

    

     

    
      	
              (e)           

            	
              Each
      Lender may, at is own expense, sell participations to one or more banks or
      other entities in or to all or a portion of its rights and obligations
      under this Agreement (including all or a portion of its Commitment and the
      Advances owing to it); provided
      that:

            

    

     

    
      

      
        
          
             

          

          
            57

            
              

            

          

          
             

          

        

      

    

     

     

    
      	
              (i)   
              

            	
              such
      Lender’s obligations under this Agreement (including its Commitment to the
      Borrower hereunder) shall remain
unchanged;

            

    

     

    
      	
              (ii)   
             

            	
              such
      Lender shall remain solely responsible to the other parties hereto for the
      performance of such obligations;

            

    

     

    
      	
              (iii)  
             

            	
              such
      Lender shall remain a Lender for all purposes of this
      Agreement;

            

    

     

    
      	
              (iv)   
            

            	
              the
      Borrower, the Guarantor, the Agent, the Security Trustee and the other
      Lenders shall continue to deal solely and directly with such Lender in
      connection with such Lender’s rights and obligations under this Agreement;
      and

            

    

     

    
      	
              (v)           

            	
              no
      participant under any such participation shall have any right to approve
      any amendment or waiver of any provision of any Finance Document, or any
      consent to any departure by the Borrower
  therefrom.

            

    

     

    
      	
              (f)           

            	
              Notwithstanding
      any other provision set forth in this Agreement, any Lender may, at its
      own expense, at any time create a security interest in all or any portion
      of its rights under this Agreement (including the Advance owing to it and
      the Notes held by it) in favor of any Federal Reserve Bank in accordance
      with Regulation A of the Board of Governors of the Federal Reserve
      System.

            

    

     

    
      	
              19.3  

            	
              Rights of
      Assignee.  In respect of any breach of a warranty,
      undertaking, condition or other provision of a Finance Document, or any
      misrepresentation made in or in connection with a Finance Document, a
      direct or indirect assignee of any of a Lender’s rights or interests under
      or by virtue of the Finance Documents shall be entitled to recover damages
      by reference to the loss incurred by that assignee as a result of the
      breach or misrepresentation irrespective of whether the Lender would have
      incurred a loss of that kind or
amount.

            

    

     

    
      	
              19.4  

            	
              Subrogation
      Assignment.  A Lender may assign, in any manner and on
      terms agreed by it, all or any part of those rights to an insurer or
      surety who has become subrogated to
them.

            

    

     

    
      	
              19.5  

            	
              Disclosure of
      Information.  Any Lender may, in connection with any
      assignment or participation or proposed assignment or participation
      pursuant to this Clause 19.2, disclose
to

            

    

     

    any
assignee or participant, or any proposed assignee or participant, any
information relating to the Obligors furnished to such Lender by or on behalf of
the Obligors or received in relation to the Obligors or their affairs under or
in connection with any Finance Document.

     

    
      	
              19.6  

            	
              Change of Lending
      Office.  Subject to Clause 16.6, a Lender may change
      its Lending Office by notice to the Borrower and such change shall become
      effective on the later of:

            

    

     

    (a)           the
date on which such notice shall become effective; and

     

    
      	
               
      

            	
              (b)

            	
              the
      date, if any, specified in the notice as the date on which the change will
      come into effect;

            

    

     

    provided that such change in
Lending Office shall not result at the time of such change in an increase the
Borrower’s cost under this Agreement.

     

    

    
      
        
           

        

        
          58

          
            

          

        

        
           

        

      

    

    

     

    
      	
              20 

            	 VARIATIONS,
      WAVIERS, ETC.
	 	 
	
              20.1  

            	
              Variations,
      Waivers, Etc.

            

    

     

    
      	
              (a)         
       

            	
              A
      document shall be effective to vary, waive, suspend or limit any provision
      of a Finance Document, or a Credit Party’s rights or remedies under such a
      provision or the general law, only if the document is signed, or
      specifically agreed to by fax, by the relevant Obligors and the relevant
      Credit Parties.

            

    

     

    
      	
              (b)           

            	
              Except
      as otherwise provided in this Agreement, this Agreement or any term hereof
      may be amended, modified, waived, discharged or terminated only by an
      instrument in writing, signed by the Majority Lenders or by the Agent
      acting with the consent of the Majority Lenders; provided that no
      amendment, modification or waiver shall, unless by an instrument signed by
      all the Lenders or by the Agent acting with the consent of all the Lenders
      (so long as this Agreement remains in effect or there are any Designated
      Transactions continuing):

            

    

     

    
      	
              (i)     
            

            	
              increase
      the Commitment of any Lender, or increase or extend the term, or extend
      the time or waive any requirement for the reduction or termination, of the
      Advance;

            

    

     

    
      	
              (ii) 
               

            	
              extend
      the date fixed for the payment of principal or interest on the
      Loan;

            

    

     

    
      	
              (iii)     
          

            	
              reduce
      the amount of any payment of principal thereof or the rate at which
      interest is payable thereon or any fee is payable
    hereunder;

            

    

     

    
      	
              (iv)   
            

            	
              alter
      the terms of this Clause 20;

            

    

     

    
      	
              (v)           

            	
              waive
      any of the conditions precedent set forth in
  Clause 8;

            

    

     

    
      	
              (vi)          

            	
              release
      any Collateral, except as contemplated by this Agreement or any other
      Finance Document; or

            

    

     

    
      	
              (vii)         

            	
              change
      the definition of the term “Majority
Lenders”;

            

    

     

    provided further that any
amendment of Clause 10.4 or 24 shall require the written consent of the
Agent and the Security Trustee.

     

    
      	
              20.2  

            	
              Exclusion of Other or Implied
      Variations.  Except as expressly provided in any document
      that satisfies the requirements of Clause 20.1, no document, and no
      act, course of conduct, failure or neglect to act, delay or acquiescence
      on the part of a Credit Party (or any person acting on its behalf) shall
      result in such Credit Party (or any person acting on its behalf) being
      taken to have varied, waived, suspended or limited, or being precluded
      (permanently or temporarily) from enforcing, relying on or
      exercising:

            

    

     

    
      	
              (a)           

            	
              any
      provision of this Agreement or any other Finance Document;
    or

            

    

     

    
      	
              (b)           

            	
              any
      Event of Default or Potential Event of Default;
  or

            

    

     

    

    
      
        
           

        

        
          59

          
            

          

        

        
           

        

      

    

    

    
      	
              (c)           

            	
              any
      breach by an Obligor of an obligation under any Finance Document or
      applicable law; or

            

    

     

    
      	
              (d)           

            	
              any
      right or remedy conferred by any Finance Document or applicable
      law;

            

    

     

    and there
shall not be implied into any Finance Document any term or condition requiring
any such provision to be enforced, or such right or remedy to be exercised,
within a certain or reasonable time.  Without limiting the forgoing,
no single or partial exercise of any such right or remedy shall preclude any
other or further exercise thereof or the exercise of any other right or
remedy.

     

    
      	
              21

            	
              NOTICES

            

    

     

    
      	
              21.1  

            	
              General.  Unless
      otherwise specifically provided, each notice given pursuant to or in
      connection with this Agreement or any other Finance Document shall be
      given by registered or certified mail, by FedEx, DHL or similar courier,
      by facsimile or by hand.

            

    

     

    
      
        	
                21.2  

              	
                Addresses for Notices,
      Etc.  Each such notice shall be
  sent:

              

      

       

    

    
      
        
          
            
              	 	
                      (a)

                    	
                      if
      to the Borrower, to:

                    	
                      Japan
      II Shipping Company Limited

                      c/o
      Top Ships Inc.

                      Vas.
      Sofias 1 & Meg. Alexandrou

                      Maroussi
      -- Athens 151 24, GREECE

                      Facsimile:  +30-210-614-1273;

                    
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      	 
      
	 	
                      (b)

                    	
                      if
      to the Guarantor, to:

                    	
                      Top
      Ships Inc.

                      Vas.
      Sofias 1 & Meg. Alexandrou

                      Maroussi
      -- Athens 151 24 GREECE

                      Facsimile:  +30-210-614-1273;

                    
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      	 
      
	 	
                      (c)

                    	
                      if
      to the Agent or the Security Trustee, to:

                    	
                      DVB
      Bank America N.V.

                      Zeelandia
      Office Park

                      Kaya
      W.F.G. Mensing 14

                      P.O.
      Box 3107

                      Curaçao,
      NETHERLANDS ANTILLES

                      Attention:  Natascha
      Bloem

                      Facsimile:  +599-9-465-2366;

                    
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      	 
      
	 	 
      	
                      with
      a copy to:

                    	
                      DVB
      Bank AG

                      Representative
      Office -- Greece

                      95
      Akti Miaouli

                      185
      35 Piraeus, GREECE

                      Attention:  Nikolas
      Chontzopoulos

                      Facsimile:
      +30-210-455-7420;

                    
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      

            

          

        

      

    

    
 

    

    
      
        
           

        

        
          60

          
            

          

        

        
           

        

      

    

    

    
      
        
          
            
              
                	 	
                        (d)

                      	
                        if
      the Swap Bank, to:

                      	
                        DVB
      Bank AG

                        Friedrich-Ebert-Anlage
      2-14

                        D-50325
      Frankfurt am Main

                        GERMANY;

                      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      	 
      
	 	 
      	
                        with
      a copy to:

                      	
                        DVB
      Bank AG

                        Representative
      Office -- Greece

                        95
      Akti Miaouli

                        185
      35 Piraeus, GREECE

                        Attention:  Nikolas
      Chontzopoulos

                        Facsimile:
      +30-210-455-7420;

                      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      
	 	 
      	 
      	 
      
	 	
                        (e)

                      	
                        if
      to any Initial Lender, to:

                      	

                        the
      address or facsimile number for such Lender listed on Schedule 1 hereto;
      and

                      
	 	 
      	 
      	 
      
	 	
                        (f)

                      	
                        if
      to any other Lender, to:

                      	
                        the
      address or facsimile number listed for notices to such Lender on the
      Assignment and Acceptance pursuant to which it shall have become a
      Lender;

                      

              

            

          

        

      

    

     

    or to
such other address or facsimile number as such party may notify for itself to
the others.

     

    
      	
              21.3

            	
              Effective Date of
      Notices.  Subject to Clauses 21.4 and
      21.5:

            

    

     

    
      	
               
      

            	
              (a)

            	
              a
      notice that is sent by post shall be deemed served and given, and shall
      take effect, three days after the date of delivery to the
      post;

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      notice that is sent by FedEx, DHL or similar courier shall be deemed
      served and given, and shall take effect, two days after the date of
      delivery to such courier;

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      notice that is sent by facsimile shall be deemed served and given, and
      shall take effect, two hours after its successful transmission is
      completed; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              a
      notice that is delivered by hand shall deemed served and given, and shall
      take effect, at the time that it is
delivered.

            

    

     

    
      	
              21.4

            	
              Service Outside Business
      Hours.  However, if under Clause 21.3 a notice would
      be deemed to be served:

            

    

     

    
      	
               
      

            	
              (a)

            	
              on
      a day that is not a Business Day in the place of receipt;
    or

            

    

     

    
      	
               
      

            	
              (b)

            	
              on
      such a Business Day, but after 5:00 p.m. local time on such Business
      Day;

            

    

     

    the
notice shall (subject to Clause 21.5) be deemed to be served, and shall
take effect, at 9:00 a.m. on the next day that is a Business Day.

     

    
      	
              21.5

            	
              Illegible
      Notices.  Clauses 21.3 and 21.4 do not apply if the
      recipient of a notice notifies the sender within one hour after the time
      at which the notice would otherwise be deemed to be served that the notice
      has been received in a form that is illegible in any material
      respect.

            

    

     

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    
      	
              21.6

            	English
      Language.  All notices given pursuant to or in connection
      with this Agreement or any other Finance Document shall be in the English
      language.

    

     

    
      	
              21.7

            	
              Meaning of
      “notice”.  In this Clause 21, “notice” includes any
      demand, consent, authorization, approval, instruction, waiver or other
      communication.

            

    

     

    
      	
              22

            	
              SUBORDINATION

            

    

     

    
      	
              22.1

            	
              [intentionally
      omitted]

            

    

     

    
      	
              22.2

            	
              [intentionally
      omitted]

            

    

     

    
      	
              22.3

            	
              [intentionally
      omitted]

            

    

     

    
      	
              22.4

            	
              Subordination.  Subject
      to Clause 22.5, during the Security Period, neither Obligor
      shall:

            

    

     

    
      	
               
      

            	
              (a)

            	
              claim
      by way of any legal or administrative action any amount that may be due to
      it from the other Obligor whether in respect of a payment made, or matter
      arising out of, this Agreement or any other Finance Document, or any
      matter unconnected with this Agreement or any other Finance Document;
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              take
      or enforce any form of security from the other Obligor for such an amount,
      or in any other way seek to have recourse in respect of such an amount
      against any asset of the other Obligor;
or

            

    

     

    
      	
               
      

            	
              (c)

            	
              set
      off any such amount against any sum due from it to the other Obligor;
      or

            

    

     

    
      	
               
      

            	
              (d)

            	
              prove
      or claim for such an amount in any liquidation, administration,
      arrangement or similar procedure involving the other Obligor;
      or

            

    

     

    
      	
               
      

            	
              (e)

            	
              exercise
      or assert any combination of the
foregoing.

            

    

     

    
      	
              22.5

            	
              Obligors’ Required
      Action.  If during the Security Period, the Agent, by
      notice to either Obligor, requires such Obligor to take any action
      referred to in paragraphs (a) through (d) of Clause 22.4, in
      relation to the other Obligor, such Obligor shall take that action as soon
      as practicable after receiving the Agent’s
  notice.

            

    

     

    
      	
              23

            	
              SUPPLEMENTAL

            

    

     

    
      	
              23.1

            	
              Rights Cumulative,
      Non-Exclusive.  The rights and remedies granted to the
      Credit Parties pursuant to the Finance
  Documents:

            

    

     

    
      	
               
      

            	
              (a)

            	
              are
      cumulative;

            

    

     

    
      	
               
      

            	
              (b)

            	
              may
      be exercised as often as appears expedient;
and

            

    

     

    
      	
               
      

            	
              (c)

            	
              shall
      not, unless a Finance Document explicitly and specifically states so, be
      taken to exclude or limit any right or remedy conferred by applicable
      law.

            

    

     

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    
      	
              23.2

            	
              Severability of
      Provisions.  If any provision of a Finance Document is or
      subsequently becomes void, unenforceable or illegal, that shall not affect
      the validity, enforceability or legality of the other provisions of that
      Finance Document or of the provisions of any other Finance
      Document.

            

    

     

    
      	
              23.3

            	
              Counterparts.  This
      Agreement may be executed in any number of counterparts and by different
      parties hereto in separate counterparts, each of which when so executed
      shall be deemed to be an original and all of which taken together shall
      constitute one and the same
agreement.

            

    

     

    
      	
              23.4

            	
              Binding
      Effect.  This Agreement shall be binding upon and inure
      to the benefit of each of the parties hereto and their respective
      successors and assigns, except that the Borrower shall not have the right
      to assign its rights hereunder or any interest herein except as provided
      in Clause 19.1.

            

    

     

    
      	
              24

            	
              THE
      AGENT AND THE SECURITY TRUSTEE

            

    

     

    
      	
              24.1

            	
              Appointment and
      Granting.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Each
      of the Lenders and the Swap Bank hereby irrevocably appoints and
      authorizes the Agent to act as its agent hereunder and under any of the
      other Finance Documents with such powers as are specifically delegated to
      the Agent by the terms of this Agreement and the other Finance Documents,
      together with such other powers as are reasonably incidental
      thereto.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Security Trustee.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Each
      of the Lenders, the Swap Bank and the Agent hereby irrevocably appoints
      and authorizes the Security Trustee to act as security trustee hereunder
      and under the other Finance Documents (other than the Notes) with such
      powers as are specifically delegated to the Security Trustee by the terms
      of this Agreement and such other Finance Documents, together with such
      other powers as are reasonably incidental
  thereto.

            

    

     

    
      
        	
                 
      

              	
                (ii)

              	
                To
      secure the payment of all sums of money from time to time owing to the
      Lenders under this Agreement, the Notes and the other Finance Documents in
      the maximum principal amount of $48,000,000 plus accrued interest thereon
      and all other amounts owing to the Lenders, the Swap Bank, the Agent and
      the Security Trustee pursuant to this Agreement, the Notes and the other
      Finance Documents, and the performance of the covenants of the Borrower
      and the other Obligor herein and therein contained, and in consideration
      of the premises and of the covenants herein contained and of the
      extensions of credit by the Lenders and the entry by the Swap Bank into
      the Master Agreement, the Security Trustee does hereby declare that it
      shall hold as such trustee in trust for the benefit of the Lenders, the
      Swap Bank and the Agent, from and after the execution and delivery
      thereof, all of its right, title and interest as mortgagee in, to and
      under each Mortgage and its right, title and interest as assignee and
      secured party under the other Finance Documents (the right, title and
      interest of the Security Trustee in and to the property, rights
      

              

         

        
           

          
            
              
              

            

            
              63

              
                

              

            

            
              
              

            

          

        

         

         

        	 	 	and
      privileges described above, from and after the execution and delivery
      thereof, and all property hereafter specifically subjected to the lien of
      the indenture created hereby and by the Finance Documents by any amendment
      hereto or thereto are herein collectively called the “Estate”) TO HAVE AND TO
      HOLD the Estate unto the Security Trustee and its successors and assigns
      forever, BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
      benefit and security of the Lenders, the Swap Bank and the Agent and their
      respective successors and assigns without any priority of any one over any
      other, UPON THE CONDITION that, unless and until an Event of Default under
      this Agreement shall have occurred and be continuing, the Borrower shall
      be permitted, to the exclusion of the Security Trustee, to possess and use
      the Ship.  IT IS HEREBY COVENANTED, DECLARED AND AGREED that all
      property subject or to become subject hereto is to be held, subject to the
      further covenants, conditions, uses and trusts hereinafter set forth, and
      the Borrower, for itself and its respective successors and assigns, hereby
      covenants and agrees to and with the Security Trustee and its successors
      in said trust, for the equal and proportionate benefit and security of the
      Lenders, the Swap Bank and the Agent as hereinafter set
  forth.

      

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Security Trustee hereby accepts the trusts imposed upon it as Security
      Trustee by this Agreement, and the Security Trustee covenants and agrees
      to perform the same as herein expressed and agrees to receive and disburse
      all monies constituting part of the Estate in accordance with the terms
      hereof.

            

    

     

    
      
        	
                24.2

              	
                Scope of
      Duties.  Neither the Agent nor the Security Trustee
      (which terms as used in this sentence and in Clause 24.5 shall
      include reference to their respective affiliates and their own respective
      and their respective affiliates’ officers, directors, employees, agents
      and attorneys-in-fact): (a) shall have any duties or responsibilities
      except those expressly set forth in this Agreement and the other Finance
      Documents, and shall not by reason of this Agreement or any of the other
      Finance Documents be (except, with respect to the Security Trustee, as
      specifically stated to the contrary in this Agreement) a trustee for a
      Lender; (b) shall be responsible to any Credit Party for any
      recitals, statements, representations or warranties contained in this
      Agreement or in any of the Finance Documents, or in any certificate or
      other document referred to or provided for in, or received by any of them
      under, this Agreement or any of the other Finance Documents, or for the
      value, validity, effectiveness, genuineness, enforceability or sufficiency
      of this Agreement or any of the other Finance Documents or any other
      document referred to or provided for herein or therein or for any failure
      by the Borrower, the Guarantor or any other person to perform any of its
      obligations hereunder or thereunder or for the location, condition or
      value of any property covered by any lien under any of the Finance
      Documents or for the creation, perfection or priority of any such lien;
      (c) shall be required to initiate or conduct any litigation or
      collection proceedings hereunder or under any of the Finance Documents
      unless expressly instructed to do so in writing by the Majority Lenders;
      or (d) shall be responsible for any action taken or omitted to be
      taken by it hereunder or under any of the Finance Documents or under any
      other document or instrument referred to or provided for herein or therein
      or in connection herewith or therewith, except for its own gross
      negligence or willful misconduct.  Each of the Agent and the
      Security Trustee may employ agents and attorneys-in-fact and neither the
      Agent nor the Security Trustee shall be responsible for the negligence or
      misconduct of any such agents or attorneys-in-fact selected by it in good
      faith.  Each of the Agent and the Security Trustee may
      

              

         

        
           

          
            
              
              

            

            
              64

              
                

              

            

            
              
              

            

          

        

         

         

        	 	deem
      and treat the payee of a Note as the holder thereof for all purposes
      hereof unless and until a written notice of the assignment or transfer
      thereof shall have been filed with and accepted by the Agent in accordance
      herewith.

      

    

     

    
      	
              24.3

            	
              Reliance.  Each
      of the Agent and the Security Trustee shall be entitled to rely upon any
      certification, notice or other communication (including any thereof by
      telephone, telex, telefacsimile, telegram or cable) believed by it to be
      genuine and correct and to have been signed or sent by or on behalf of the
      proper person or persons, and upon advice and statements of legal counsel,
      independent accountants and other experts selected by the Agent or the
      Security Trustee, as the case may be.  As to any matters not
      expressly provided for by this Agreement or any of the other Finance
      Documents, each of the Agent and the Security Trustee shall in all cases
      be fully protected in acting, or in refraining from acting, hereunder or
      thereunder in accordance with instructions signed by the Majority Lenders,
      and such instructions and any action taken or failure to act pursuant
      thereto shall be binding on all of the Lenders and the Swap
      Bank.

            

    

     

    
      	
              24.4

            	
              Knowledge.  Neither
      the Agent nor the Security Trustee shall be deemed to have knowledge or
      notice of the occurrence of a Potential Event of Default or an Event of
      Default (other than, in the case of the Agent, the non-payment of
      principal of or interest on the Loan or the Advance) unless it shall have
      received notice from a Lender or an Obligor specifying such Potential
      Event of Default or Event of Default and stating that such notice is a
      “Notice of Default.”  If the Agent receives such a notice of the
      occurrence of such Potential Event of Default or Event of Default, the
      Agent shall give prompt notice thereof to the Security Trustee, the
      Lenders and the Swap Bank (and shall give each of the Security Trustee,
      the Lenders and the Swap Bank prompt notice of each such
      non-payment).  Subject to Clause 24.8, the Agent and the
      Security Trustee shall take such action with respect to such Potential
      Event of Default or Event of Default or other event as shall be directed
      by the Majority Lenders, except that, unless and until the Agent and the
      Security Trustee shall have received such directions, each of the Agent
      and the Security Trustee may (but shall not be obligated to) take such
      action, or refrain from taking such action, with respect to such Potential
      Event of Default or Event of Default or other event as it shall deem
      advisable in the best interest of the Lenders and the Swap
      Bank.

            

    

     

    
      	
              24.5

            	
              Agent and Security Trustee as
      Lenders.  Each of the Agent and the Security Trustee (and
      any successor acting as Agent or Security Trustee, as the case may be) in
      its individual capacity as a Lender hereunder shall have the same rights
      and powers hereunder as any other Lender and may exercise the same as
      though it were not acting as the Agent or the Security Trustee, as the
      case may be, and the term “Lender” and “Lenders” shall, unless the context
      otherwise indicates, include each of the Agent and the Security Trustee in
      its individual capacity.  Each of the Agent and the Security
      Trustee (and any successor acting as Agent or Security Trustee, as the
      case may be) and their respective affiliates may (without having to
      account therefor to any Lender or the Swap Bank) accept deposits from,
      lend money to and generally engage in any kind of banking, trust or other
      business with the Obligors and any of their respective subsidiaries or
      affiliates as if it were not acting as the Agent or the Security Trustee,
      as the case may be, and each of the Agent and the Security Trustee and
      their respective affiliates may accept fees and other consideration from
      the Borrower and the Guarantor for services in connection with this
      Agreement or otherwise without having to account for the same to the
      Lenders or the Swap Bank.

            

    

     

    
       

      
        
          
          

        

        
          65

          
            

          

        

        
          
          

        

      

    

     

     

    
      	
              24.6

            	
              Indemnification of the Agent and the Security
      Trustee.  The Lenders agree to
      indemnify each of the Agent and the Security Trustee (to the extent not
      reimbursed under other provisions of this Agreement, but without limiting
      the obligations of either Obligor under said other provisions), ratably in
      accordance with the aggregate principal amount of each Lender’s
      participation in the Loan, for any and all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements of any kind and nature whatsoever that may be imposed on,
      incurred by or asserted against the Agent or the Security Trustee in any
      way relating to or arising out of this Agreement or any other Finance
      Document or any other documents contemplated by or referred to herein or
      therein or the transactions contemplated hereby or thereby (including the
      costs and expenses that the Borrower is to pay hereunder, but excluding,
      unless an Event of Default shall have occurred and be continuing, normal
      administrative costs and expenses incident to the performance of their
      respective agency duties hereunder) or the enforcement of any of the terms
      hereof or thereof or of any such other documents, except that no Lender
      shall be liable for any of the foregoing to the extent they arise from the
      gross negligence or willful misconduct of the party to be
      indemnified.

            

    

     

    
      	
              24.7

            	
              Reliance on Agent or Security
      Trustee.  Each of the Lenders and the Swap Bank agrees
      that it has, independently and without reliance on the Agent, the Security
      Trustee or any other Credit Party, and based on such documents and
      information as it has deemed appropriate, made its own credit analysis of
      the Borrower and the Guarantor and decision to enter into this Agreement
      and that it will, independently and without reliance upon the Agent, the
      Security Trustee or any other Credit Party, and based on such documents
      and information as it shall deem appropriate at the time, continue to make
      its own analysis and decisions in taking or not taking action under this
      Agreement or any of the Finance Documents.  None of the Agent or
      the Security Trustee shall be required to keep itself informed as to the
      performance or observance by either of the Obligors of its obligations
      under this Agreement or any other Finance Document or any other document
      referred to or provided for herein or therein or to inspect the properties
      or books of either Obligor.  Except for notices, reports and
      other documents and information expressly required to be furnished to the
      Lenders and the Swap Bank by the Agent or the Security Trustee hereunder,
      neither the Agent nor the Security Trustee shall have any duty or
      responsibility to provide any Lender or the Swap Bank with any credit or
      other information concerning the affairs, financial condition or business
      of the Borrower or the Guarantor or any of their respective parents,
      subsidiaries or Affiliates that may come into the possession of the Agent,
      the Security Trustee or any of their respective
  Affiliates.

            

    

     

    
      	
              24.8

            	
              Actions by Agent and Security
      Trustee.  Except for action expressly required of the
      Agent or the Security Trustee hereunder and under the other Finance
      Documents, each of the Agent and the Security Trustee shall in all cases
      be fully justified in failing or refusing to act hereunder and thereunder
      unless it shall receive further assurances to its satisfaction from the
      Lenders of their indemnification obligations under Clause 24.6
      against any and all liability and expense that may be incurred by it by
      reason of taking or continuing to take any such
  action.

            

    

     

    
      
        	
                24.9

              	
                Resignation and
      Removal.  Subject to the appointment and acceptance of a
      successor Agent or Security Trustee (as the case may be) as provided
      below, each of the Agent and the Security Trustee may resign at any time
      by giving notice thereof to the Lenders, the Swap Bank and the Obligors,
      and the Agent or the Security Trustee may be removed at any time
      

              

        
           

           

          
            
              
              

            

            
              66

              
                

              

            

            
              
              

            

             

             

          

        

        	 	with
      or without cause by the Majority Lenders.  Upon any such
      resignation or removal, the Majority Lenders shall have the right to
      appoint a successor Agent or Security Trustee, as the case may be, which
      shall be a Lender, or a Lender with an Affiliate, that has an office in
      New York, New York.  If no successor Agent or Security Trustee,
      as the case may be, shall have been so appointed by the Lenders or, if
      appointed, shall not have accepted such appointment within 30 days after
      the retiring Agent’s or Security Trustee’s, as the case may be, giving of
      notice of resignation or the Majority Lenders’ removal of the retiring
      Agent or Security Trustee, as the case may be, then the retiring Agent or
      Security Trustee, as the case may be, may, on behalf of the Lenders,
      appoint a successor Agent or Security Trustee, as the case may be, which
      shall be a Lender, or a Lender with an Affiliate, that has an office in
      New York, New York.  Upon the acceptance of any appointment as
      Agent or Security Trustee hereunder by a successor Agent or Security
      Trustee, such successor Agent or Security Trustee, as the case may be,
      shall thereupon succeed to and become vested with all the rights, powers,
      privileges and duties of the retiring Agent or Security Trustee, as the
      case may be, and the retiring Agent or Security Trustee shall be
      discharged from its duties and obligations hereunder.  After any
      retiring Agent’s or Security Trustee’s resignation or removal hereunder as
      Agent or Security Trustee, as the case may be, the provisions of this
      Clause 24 shall continue in effect for its benefit in respect of any
      actions taken or omitted to be taken by it while it was acting as the
      Agent or the Security Trustee, as the case may
be.

      

    

     

    
      	
              24.10

            	
              Release of
      Collateral.  Without the prior written consent of all of
      the Lenders and the Swap Bank, neither the Agent nor the Security Trustee
      shall consent to any modification, supplement or waiver under any Finance
      Document or release any Collateral or otherwise terminate any lien under
      any Finance Document, except that no such consent shall be required, and
      each of the Agent and the Security Trustee shall be authorized, to release
      any lien covering property that is the subject of a disposition of
      property permitted hereunder or to which the Lenders and the Swap Bank
      have consented.

            

    

     

    
      	
              25

            	
              LAW
      AND JURISDICTION

            

    

     

    
      	
              25.1

            	
              Governing
      Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
      IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
  YORK.

            

    

     

    
      	
              25.2

            	
              Consent to
      Jurisdiction.

            

    

     

    
      	
               
      

            	
              (a)

            	
              Each
      of parties hereto irrevocably and unconditionally submits, for itself and
      its property, to the nonexclusive jurisdiction of any New York State court
      or Federal court of the United States of America sitting in New York
      County, and any appellate court thereof, in any action, suit or proceeding
      arising out of or relating to this Agreement or any other Finance Document
      or for recognition or enforcement of any judgment, and each of the parties
      hereto hereby irrevocably and unconditionally agrees that all claims in
      respect of any such action, suit or proceeding may be heard and determined
      in such New York State Court or, to the extent permitted by law, in such
      Federal court.  Each of the parties hereto agrees that a final
      judgment in any such action, suit or proceeding shall be conclusive and
      may be enforced in other jurisdictions by suit on the judgment or in any
      other manner provided by law.

            

    

     

     

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

     

     

    
      
        	 	
                (b)

              	
                Nothing
      in this Clause 25.2 shall affect the right of any Credit Party to
      bring any action or proceeding against an Obligor or its property in the
      courts of any other jurisdiction where such action or proceeding may be
      heard.

              

      

    

     

    
      	
               
      

            	
              (c)

            	
              Each
      of the parties hereto irrevocably and unconditionally waives, to the
      fullest extent it may legally and effectively do so, any objection that it
      may now or hereafter have to the laying of venue of any suit, action, suit
      or proceeding arising out of or relating to this Agreement or any other
      Finance Document in any New York State or Federal court and the defense of
      an inconvenient forum to the maintenance of such action, suit or
      proceeding in any such court and any immunity from jurisdiction of any
      court or from any legal process with respect to themselves or their
      property.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Each
      Obligor irrevocably appoints Seward & Kissel LLP, with an office at
      One Battery Park Plaza, New York, New York 10004 U.S.A., as its agent to
      receive on its behalf service of copies of the summons and complaint and
      any other process which may be served in any such action, suit or
      proceeding.  If the appointment of Seward & Kissel LLP as
      agent pursuant to the preceding sentence shall cease to be effective as to
      any Obligor or Seward & Kissel LLP shall at any time cease to have an
      office in New York County, each of the Obligors shall immediately appoint
      another person having an office in New York County and otherwise
      acceptable to the Agent to accept service on its behalf.  If
      Seward & Kissel LLP shall at any time change its name or shall move
      its office in the County of New York from One Battery Park Plaza, New
      York, New York 10004 U.S.A., each Obligor shall promptly notify the each
      of the Lenders, the Swap Bank and the Agent of such new name or address,
      as the case may be.  Each Obligor hereby consents to service of
      process in connection with the subject matter specified in the first
      sentence of Clause 25.2(a) by registered or certified mail, FedEx,
      DHL or similar courier at the address to which notices to it are to be
      given, it being agreed that service in such manner shall constitute valid
      service upon such party or its respective successors or assigns in
      connection with any such action or proceeding only; provided, that nothing
      in this Clause 25.2(d) shall affect the right of any party to serve
      legal process in any other manner permitted by applicable
    law.

            

    

     

    
      	
              25.3

            	
              Rights
      unaffected.  Nothing in this Clause 25 shall exclude
      or limit any right a Credit Party may have (whether under the law of any
      country, an international convention or otherwise) with regard to the
      bringing of proceedings, the service of process, the recognition or
      enforcement of a judgment or any similar or related matter in any
      jurisdiction.

            

    

     

    
      	
              25.4

            	
              Meaning of
      “proceedings”.  In this Clause 25, “proceedings” means
      proceedings of any kind, including an application for a provisional or
      protective measure.

            

    

     

    
      	
              26

            	
              PATRIOT
      ACT

            

    

     

    The Agent
hereby notifies the Obligors that pursuant to the requirements of the PATRIOT
Act and the Agent’s policies and practices, the Agent and each of the Lenders is
required to obtain, verify and record certain information and documentation that
identifies each of the Obligors, which information includes the name and address
of each of the Obligors and such other information that will allow the Agent and
each of the Lenders to identify each of the Obligors in accordance with the
PATRIOT Act.

     

    

    
      
        
           

        

        
          68

          
            

          

        

        
           

        

      

    

     

    
       

      
        	
                27

              	
                WAIVER
      OF JURY TRIAL

              

      

    

     

    THE
OBLIGORS AND THE CREDIT PARTIES MUTUALLY AND IRREVOCABLY WAIVE ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER FINANCE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

     

    

    
      
        
           

        

        
          67

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first above written.

     

    

    
      
        
          	 
      	
                  JAPAN
      II SHIPPING COMPANY LIMITED

                   

                   

                  By:     
      /s/ Arthur
      Lichtenstein

                  Name: 
      Arthur Lichtenstein

                  Title: 
      Attorney-in-Fact

                   

                
	 
      	
                  TOP
      SHIPS INC.,

                  as
      Guarantor

                   

                  By:     
      /s/ Arthur
      Lichtenstein

                  Name: 
      Arthur Lichtenstein

                  Title: 
      Attorney-in-Fact

                   

                
	 
      	
                  DVB
      BANK AG,

                  as
      Swap Bank

                   

                  By:     
      / s/  John F.
      Imhof, Jr. 

                  Name: 
      John F. Imhof, Jr.

                  Title: 
      Attorney-in-Fact

                   

                
	 	
                  DVB
      BANK AMERICA N.V.,

                  as
      Agent and Security Trustee

                   

                   

                  By:    
      /s/  John F. Imhof,
      Jr.

                  Name: 
      John F. Imhof, Jr.

                  Title: 
      Attorney-in-Fact

                   

                

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      

      
        
          
            
              
                
                  	 
      	
                          INITIAL
      LENDER(S):

                           

                          DVB
      BANK AMERICA N.V.,

                          as
      Initial Lender

                           

                           

                          By:     
      /s/ John F. Imhof,
      Jr.

                          Name: 
      John F. Imhof, Jr.

                          Title: 
      Attorney-in-Fact

                           

                        

                

              

            

          

        

      

       

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    

    SCHEDULE
1

     

    LENDERS
AND COMMITMENTS

     

    

      
        
          
            
              	
                      Lender

                    	 
      	
                      Commitment

                    
	
                       

                      DVB
      BANK AMERICA N.V.

                    	 
      	
                       

                      $48,000,000

                    
	
                       

                      Lending
      Office:

                    	
                       

                      DVB
      Bank America N.V.

                      Zeelandia
      Office Park

                      Kaya
      W.F.G. Mensing 14

                      P.O.
      Box 3107

                      Curaçao,
      NETHERLANDS ANTILLES

                    	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                       

                      Address for
      Notices:

                    	
                       

                      DVB
      Bank America N.V.

                      Zeelandia
      Office Park

                      Kaya
      W.F.G. Mensing 14

                      P.O.
      Box 3107

                      Curaçao,
      NETHERLANDS ANTILLES

                      Attention:  Natascha
      Bloem

                      Facsimile:  +599-9-465-2366;

                    	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      with
      a copy to:

                    	 
      
	 
      	 
      	 
      
	 
      	
                      DVB
      Bank AG

                      Representative
      Office – Greece

                      95
      Akti Miaouli

                      185
      35 Piraeus, GREECE

                      Attention:  Nikolas
      Chontzopoulos

                      Facsimile:  +30-210-455-7420

                    	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     

    

    SCHEDULE
2

     

    IRREVOCABLE
DRAWDOWN NOTICE

     

    

      
        	
                To:

              	
                DVB
      Bank America N.V., as Agent

                Zeelandia
      Office Park

                Kaya
      W.F.G. Mensing 14

                P.O.
      Box 3107

                Curaçao,
      Netherlands Antilles

                Attention:  Natascha
      Bloem

                Facsimile:
      +599-9-465-2366

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      	 
      
	
                cc:

              	
                DVB
      Bank AG

                Representative
      Office – Greece

                95
      Akti Miaouli

                185
      35 Piraeus, GREECE

                Attention:  Nikolas
      Chonzopoulos

                Facsimile:
      +30-210455-7420

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                Date:
      ________, 2008

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    We refer
to the Loan Agreement dated as of April 24, 2008 (as such may be amended,
restated, supplemented or otherwise modified from time to time in accordance
therewith, the “Loan
Agreement”) among ourselves, as Borrower, and the other parties named
therein in connection with a loan facility of up to
$48,000,000.  Terms defined in the Loan Agreement have their defined
meanings when used in this Drawdown Notice.

     

    We
request to borrow Advance as follows

     

    Total
Amount: $_______________.

     

    Expected
Drawdown Date: ___________, 2008

     

    Duration
of the first Interest Period shall be__ months

     

    Payment
instructions:

     

    [_____________________]

     

    [_____________________]

     

    [_____________________]

     

    We
represent and warrant that:

     

    
      	
              (a)

            	
              the
      representations and warranties in Clause 9 of the Loan Agreement
      would be true and not misleading if repeated on the date of this notice
      with reference to the circumstances now
  existing;

            

    

     

    
      	
              (b)

            	
              no
      Event of Default or Potential Event of Default has occurred or will result
      from the borrowing of the Loan.

            

    

     

    This
notice cannot be revoked without your prior consent.

     

    

    
      
        
          
            

            

             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    We
authorize you to deduct any balance of the accumulated commitment fee and any
other fees payable by us under the Loan Agreement and the other Finance
Documents on the Expected Drawdown Date from the amount of the Advance requested
herein.

     

    JAPAN II
SHIPPING COMPANY LIMITED,

    as
Borrower

     

    
      	
              By:

            	
              ___________________________

              Name:

              Title:

            

    

    
 

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
3

     

    CONDITIONS
PRECEDENT DOCUMENTS

     

    PART
A

     

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

     

    
      	
              1.

            	
              An
      original of each Finance Document (other than those Finance Documents to
      be delivered in connection with the Ship pursuant to paragraph 2 of Part B
      hereof) and each document required to be delivered by each such Finance
      Document, each duly executed by each party
  thereto;

            

    

     

    
      	
              2.

            	
              Copies
      of the constitutional documents, and each amendment thereto, of each
      Obligor, certified as of a date reasonably near the date of the relevant
      Drawdown Notice by the president or the secretary (or equivalent officer)
      of such party as being a true and correct copy
  thereof;

            

    

     

    
      	
              3.

            	
              Copies
      of certificates dated as of a date reasonably near the date of the
      Drawdown Notice, certifying that each Obligor is duly incorporated and in
      good standing under the laws of such party’s jurisdiction of
      incorporation;

            

    

     

    
      	
              4.

            	
              Copies
      of resolutions of the directors (or equivalent governing body) (and where
      required, the shareholders or equivalent equity holders)
    of:

            

    

     

    
      	
               
      

            	
              (a)

            	
              each
      Obligor authorizing the execution of each of the Finance Documents to
      which such Obligor is or is to be a party (and additionally, in the case
      of the Borrower, the Memorandum of Agreement) and authorizing named
      officers or attorneys-in-fact to execute such documents and, in the case
      of the Borrower, to give the Drawdown Notice and other notices required by
      the Finance Documents; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      seller under the Memorandum of Agreement authorizing the execution of the
      Memorandum of Agreement and authorizing named officers or
      attorneys-in-fact to execute such documents and to give any notices
      required thereunder,

            

    

     

    in each
case certified as of a date reasonably near the date of the Drawdown Notice by
the president or the secretary (or equivalent officer) of such party as being a
true and correct copy thereof;

     

    
      	
              5.

            	
              The
      original or a certified copy of any power of attorney under which any
      Finance Document is to be executed on behalf of an
  Obligor;

            

    

     

    
      	
              6.

            	
              Copies
      of all consents that any of the Obligors requires to enter into, or make
      any payment or perform any of its obligations under or in connection with
      the transactions contemplated by this Agreement and the Finance Documents,
      each certified as of a date reasonably near the date of the relevant
      Drawdown Notice by the president or the secretary (or equivalent officer)
      of such party as being a true and correct copy thereof, or certification
      by such president or secretary (or equivalent officer) that no such
      consents are required;

            

    

     

    

    
      
        
          
             

          

           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    
      	
              7.

            	
              A
      copy of the Memorandum of Agreement, to be in form and substance
      acceptable to the Majority Lenders and certified as of a date reasonably
      near the date of the relevant Drawdown Notice by the president or the
      secretary (or equivalent officer) of the Borrower as being a true and
      correct copy thereof and further
certifying;

            

    

     

    
      	
               
      

            	
              (a)

            	
              such
      document remains valid and in full force and effect as of the anticipated
      delivery date of the Ship;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      seller in respect of the Memorandum of Agreement is not in default under
      the terms of such document; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              there
      is no pending dispute or arbitration proceeding arising out of or in
      connection with any such document;
and

            

    

     

    
      	
              8.

            	
              Documentary
      evidence that Seward & Kissel LLP has accepted its appointment as
      agent for service of process in respect of each
  Obligor.

            

    

     

    
      	
              9.

            	
              All
      know-your-customer information and information under applicable
      anti-money laundering rules and regulations, in each case as requested by
      any Lender in connection with its internal compliance regulations, under
      the PATRIOT Act, applicable EU regulations or
      otherwise.

            

    

     

     

    PART
B

     

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

     

    
      	
              1.

            	
              A
      certificate of each Obligor, signed on behalf of each such party by the
      president or the secretary (or equivalent officer) of such party, dated as
      of the Expected Drawdown Date (the statements made in such certificate
      shall be true on and as of the Expected Drawdown Date), certifying as
      to:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      absence of any amendments to the constitutive documents of such party
      since the date of the certificate referred to in paragraph 2 of
      Part A above;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      absence of any proceeding for the dissolution or liquidation of such
      party;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      veracity in all material respects of the representations and warranties
      contained in this Agreement and the other Finance Documents as though made
      on and as of the Expected Drawdown
Date;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      absence of any material misstatement of fact in any information provided
      by the Obligors to the Agent, the Security Trustee or any Lender and that
      such information did not omit to state any material fact necessary to make
      the statements therein, in the light of the circumstances under which they
      were made, not misleading; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      absence of any event occurring and continuing, or that would result from
      the making of the Advance, that constitutes or would constitute a
      Potential Event of Default or an Event of
  Default;

            

    

     

    

    
      
        
          
              

          

           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    
      
        	
                2.

              	
                A
      duly executed original of the Mortgage, Insurance Assignment, Earnings
      Assignment, Charter Assignment and Manager’s Undertakings (and of each
      document required to be delivered thereby), duly executed by each party
      thereto, and documentary evidence that the Security Interest created by
      such Finance Documents have been duly
perfected;

              

      

    

     

    3.            
Documentary evidence that:

     

    
      	
               
      

            	
              (a)

            	
              the
      Ship has been unconditionally delivered by the seller to, and
      unconditionally accepted by, the Borrower in accordance with all of the
      terms and conditions of the Memorandum of Agreement, free and clear of all
      liens and encumbrances, together with a copy, certified as of the relevant
      Expected Drawdown Date by the president or the secretary (or equivalent
      officer) of the Borrower as being a true and correct copy of the original,
      of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Protocol of Delivery and Acceptance for the Ship, duly executed by the
      seller and the relevant Borrower;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Bill of Sale delivered by the seller to the
  Borrower;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      commercial invoice issued by the seller to the
  Borrower;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      corporate authorities of the seller permitting such seller to sell the
      Ship to the Borrower under the terms of the Memorandum of Agreement;
      and

            

    

     

    
      	
               
      

            	
              (v)

            	
              each
      charter in effect with respect to the
Ship;

            

    

     

    
      	
               
      

            	
              (b)

            	
              there
      is no pending dispute or arbitration proceedings arising out of or in
      connection with the Memorandum of Agreement, which may be established by a
      certificate dated as of the relevant Expected Drawdown Date by the
      president, the secretary or an equivalent officer of the
      Borrower;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Ship is registered in the name of the Borrower under Liberian registry,
      free of all recorded liens and encumbrances, save as contemplated by the
      Finance Documents (which shall be established by a Certificate of
      Ownership and Encumbrance issued by the appropriate Liberian authorities
      stating that the Ship is owned by the Borrower and that there are on
      record no other mortgages, liens or other encumbrances on the Ship except
      the Mortgage);

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Mortgage has been preliminarily registered against the Ship as a valid
      first preferred ship mortgage in accordance with the laws of Liberia and
      the Security Interest created by the Mortgage shall have been duly
      perfected;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      Ship is classed with the Classification Society in the highest
      classification and rating for vessels of the same age and type without any
      outstanding conditions or recommendations affecting class (other than
      those for which the time prescribed for curing the condition or
      recommendation has not passed), which shall be established by a
      Confirmation of Class Certificate issued by the Classification Society of
      the Ship and dated a date reasonably near the relevant Expected Drawdown
      Date; a “Class Statement” or similar instrument shall not be acceptable
      for purposes of this clause;

            

    

     

    

    
      
        
          
             

          

           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (f)

            	
              the
      Ship:

            

    

     

    
      	
               
      

            	
              (i)

            	
              is
      insured in compliance with the terms of the Mortgage, including
      mortgagee’s interest and loss of hire
insurance;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              is
      or will be managed by the Approved Manager and the relevant Approved
      Technical Submanager in accordance with management agreements acceptable
      to the Agent; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              has
      been inspected and found to be in a satisfactory condition by an inspector
      appointed by the Agent at the cost of the Borrower;
  and

            

    

     

    
      	
               
      

            	
              (g)

            	
              if
      chartered to an Approved Charterer, the Ship has been unconditionally
      delivered by the Borrower to, and unconditionally accepted by, such
      Approved Charterer in accordance with all of the terms and conditions of
      the relevant Approved Charter, together with a copy, certified as of the
      Expected Drawdown Date by the president or the secretary (or equivalent
      officer) of the Borrower as being a true and correct copy of the original,
      of the Protocol of Delivery and Acceptance for the Ship, duly executed by
      the Borrower and such Approved
Charterer;

            

    

     

    
      	
              4.

            	
              A
      certificate by the president or the secretary (or equivalent officer) of
      the Borrower, or a certificate of the Approved Manager, identifying and
      giving the address and other communication details of the ISM Responsible
      Person(s) for the Ship;

            

    

     

    
      	
              5.

            	
              Copies
      of the Document of Compliance and Safety Management Certificate referred
      to in paragraph (a) of the definition of the ISM Code Documentation
      for the Ship, certified as true and in effect by the president or the
      secretary (or equivalent officer) of the Borrower or the Approved Manager,
      provided that the Borrower may deliver to the Agent on or before the
      Expected Drawdown Date an undertaking, in form and substance satisfactory
      to the Agent, to deliver a copy of the Safety Management Certificate to
      the Agent within ten Business Days after the relevant Expected Drawdown
      Date;

            

    

     

    
      	
              6.

            	
              Copies
      of such other ISM Code Documentation as the Agent may have requested by
      written notice to the Borrower not later than two days before the relevant
      Expected Drawdown Date, certified as true and complete in all material
      respects by the Borrower or the relevant Approved
  Manager;

            

    

     

    7.          
  Certification by the Borrower that:

     

    
      	
               
      

            	
              (i)

            	
              the
      Ship has and will maintain for the duration of the Security Period a valid
      International Ship Security Certificate (and either a true copy of such
      International Ship Security Certificate shall be attached to such
      Borrower’s certification or the Borrower shall undertake to deliver a
      certified copy of such certificate as soon as it becomes
      available);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      security system of the relevant Ship and associated security equipment
      complies with, and at all times during the Security Period will comply
      with, the applicable requirements of Chapter XI-2 of SOLAS and Part A of
      the ISPS Code; and

            

    

     

    

    
      
        
          
             

          

           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              (iii)

            	
              an
      approved ship security plan is in place and will be maintained at all
      times during the Security Period.

            

    

     

    
      	
              8.

            	
              A
      favorable opinion of Watson, Farley & Williams (New York) LLP, New
      York, Marshall Islands and Liberian counsel for the Credit Parties, in
      form, scope and substance satisfactory to the Credit
    Parties;

            

    

     

    
      	
              9.

            	
              A
      favorable opinion of Seward & Kissel LLP, New York, Marshall Islands
      and Liberian counsel for the Obligors, in form, scope and substance
      satisfactory to the Credit Parties;
and

            

    

     

    
      	
              10.

            	
              Documentary
      evidence that it has funds adequate to cover the acquisition cost of the
      Ship five Business Days prior to the Ship’s expected delivery
      date.

            

    

     

    

     

    

    
      
        
          
          

           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    APPENDIX
A

     

    FORM OF
COMPLIANCE CERTIFICATE

     

    Financial
Statement Date:  __________

     

    COMPLIANCE
CERTIFICATE

     

    To:           DVB
Bank America N.V., as Agent

     

    Ladies
and Gentlemen:

     

    Reference
is made to that certain Loan Agreement, dated as of April 24, 2008 (as such
may be amended, restated, supplemented or otherwise modified from time to time,
the “Loan Agreement”)
among (i) Japan II Shipping Company Limited, as the Borrower, (ii) Top
Ships Inc., as the Guarantor, (iii) the banks and financial institutions
defined therein as the Lenders, (iv) DVB Bank AG, as Swap Bank, and
(v) DVB Bank America N.V., as Agent and Security Trustee.  Unless
otherwise defined herein, terms defined in the Loan Agreement (as defined in the
recitals hereof) are used herein as therein defined and the rules of
construction and interpretation in Clause 1 of the Loan Agreement apply to
this certificate, including Schedule 2 hereto.

     

    The
undersigned, _________________________hereby certifies on the date hereof that
he/she is the Chief Financial Officer of the Guarantor and that, as such, he/she
is authorized to execute and deliver this certificate to Agent on the behalf of
Guarantor, and that:

     

    [Use
following paragraph 1 for fiscal year-end financial
statements]

     

    1.           Attached
hereto as Schedule 1 are the year-end audited financial statements required
by Clause 10.1(f)(i) of the Loan Agreement for the fiscal year of Guarantor
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

     

    [Use
following paragraph 1 for fiscal quarter-end financial
statements]

     

    1.           Attached
hereto as Schedule 1 are the unaudited financial statements required by
Clause 10.1(f)(i) of the Loan Agreement for the fiscal quarter of Guarantor
ended as of the above date.  Such financial statements fairly present
the financial condition, results of operations and cash flows of Guarantor and
its subsidiaries in accordance with Applicable Accounting Principles as at such
date and for such period, subject only to normal year-end audit adjustments and
the absence of footnotes.

     

    2.           The
undersigned has reviewed and is familiar with the terms of the Loan Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Guarantor during the accounting period covered by the attached financial
statements.

     

    3.           A
review of the activities of the Guarantor during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Obligors performed and observed all their
obligations under the Finance Documents, and

     

    

    
      
        
          
             

          

           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    [select
one:]

     

    [to the
best knowledge of the undersigned during such fiscal period, each Obligor
performed and observed each covenant and condition of the Finance Documents
applicable to it.]

     

    --or--

     

    [the
following covenants or conditions have not been performed or observed and the
following is a list of each such Potential Default and Event of Default and its
nature and status:]

     

    4.           The
financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this
certificate.

     

    IN
WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of
_______, 20___.

     

     

     

    
      
        	 	 	 TOP
      SHIPS INC.
	 	 	 
	 	 	 
	
                 
      

              	
                By:

              	
                _______________________________

                Name:

                Title:  Chief Financial
      Officer

              

      

    

    

    
      
        
          
          

           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    For the
Quarter/Year ended

    ___________________(“Statement
Date”)

     

    SCHEDULE
1

    to the
Compliance Certificate

     

    Financial
Statements

     

     

    
      

      
        
          
            
            

             

          

          
            3

            
              

            

          

          
             

          

        

      

    

    
 

    For the
Quarter/Year ended

    ___________________(“Statement
Date”)

     

    SCHEDULE
2

    to the
Compliance Certificate

     

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Clause
      10.1(v)(i):  Cash in Bank Accounts:

                                        	 
      
	 	 
	

                                          Names
      of members of the Group as of

                                          the
      Statement Date:

                                        	
                                           

                                          
                                            ______________________________

                                          

                                        
	 	 
	

                                          Cash
      in bank accounts in the name of

                                          the
      Guarantor or in the name of any of

                                          a
      member of the Group (excluding any

                                          bank
      accounts that shall be

                                          subject
      to any Security Interest)

                                        	
                                           

                                           

                                           

                                           

                                          
                                            $_____________

                                          

                                        
	 
      	
                                          [itemize
      by bank and Group
member]

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
 

    
      Clause
10.1(v)(ii):  Net Asset Value:

       

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      I.

                                    	
                                      Total
      Debt:

                                    	 	 
      
	
                                      (a)

                                    	
                                      moneys
      borrowed or raised by the Guarantor and its subsidiaries

                                    	 	
                                       

                                      $_____________ 
      

                                    
	 
      	 
      	 	
                                       

                                    
	
                                      (b)

                                    	
                                      bonds,
      notes, loan stock, debentures, commercial paper or other debt securities
      issued by the Guarantor or any of its subsidiaries not for the time being
      beneficially owned by the Guarantor or any of its
    subsidiaries

                                    	 	
                                       

                                       

                                      
                                        $_____________ 
      

                                      

                                    
	 
      	 
      	 	
                                       

                                    
	
                                      (c)

                                    	
                                      sums
      outstanding under acceptances by the Guarantor or any of its subsidiaries
      or by any bank or acceptable house under acceptance credits opened on
      behalf of the Guarantor or any subsidiary

                                    	 	
                                       

                                       

                                      
                                        $_____________ 
      

                                      

                                    
	 
      	 
      	 	 
      
	
                                      (d)

                                    	
                                      deferred
      indebtedness of the Guarantor or any of its subsidiaries for payment of
      the acquisition or construction price for assets or services acquired or
      constructed

                                    	 	
                                       

                                       

                                      $_____________

                                    
	 
      	 
      	 	 
      
	
                                      (e)

                                    	
                                      rental
      payments under Finance Leases

                                    	 	
                                      $_____________

                                    
	 	 	 	 
	
                                      (f)

                                    	
                                      receivables
      sold or discounted with a right of recourse to the Guarantor or any of its
      subsidiaries

                                    	 	
                                       

                                      
                                        $_____________

                                      

                                    
	 
      	 
      	 	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    
 

    
      	
              (g)

            	
              the
      nominal amount of any issued and paid up share capital (other than equity
      share capital) of any subsidiary not beneficially owned by the Guarantor
      or another subsidiary

            	 
      	
              $____________

            
	 
      	 
      	 
      	 
      
	
              (h)

            	
              preference
      share capital redeemable prior to the last day of the Security
      Period

            	 
      	
              $____________

            
	 
      	 
      	 
      	 
      
	
              (i)

            	
              over
      all or any part of the undertaking, property, assets, rights or revenues
      of the Guarantor or any of its subsidiaries irrespective of whether or not
      such indebtedness is supported by a personal covenant on the part of the
      Guarantor or any of its subsidiaries

            	 
      	
              $____________

            
	 
      	 
      	 
      	 
      
	
              (j)

            	
              indebtedness
      incurred in respect of swaps, forward exchange contracts, futures or other
      derivatives

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              (k)

            	
              any
      other liability arising from a transaction having the commercial effect of
      a borrowing or the raising of money

            	 
      	
              $_____________
      plus

            
	 
      	 
      	 
      	 
      
	
              (l)

            	
              obligations
      under guarantees in respect of the obligations of any other person which,
      if such person were the Guarantor or a subsidiary would fall within
      paragraphs (a) to (k) above

            	 
      	
              $_____________

            
	 
      	 
      	 
      	 
      
	
              minus:

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              moneys
      owing by the Guarantor to a subsidiary or by a subsidiary to the Guarantor
      or to another subsidiary

            	 
      	
              $_____________
      equals

            
	 
      	 
      	 
      
	
              Total
      Debt =

            	 
      	
              $_____________

            
	 
      	 
      	 
      	 
      

    

     

    
      
        	
                The
      principal amount of Total Debt deemed to be outstanding in relation to
      Finance Leases or hire purchase agreements shall be the present value of
      the minimum lease or hire payments discounted at the interest rate
      implicit in the relevant lease or hire purchase
  agreement

              

      

       

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    

      
        	
                II.            
      Total Market Value Adjusted
      Assets

                 

              	 
      	 
      
	
                (a)

              	
                The
      value (less depreciation computed in accordance with generally accepted
      international accounting principles consistently applied) on a
      consolidated basis of all tangible fixed assets of the Group, , including
      long-term cash receivables (seller’s credit), as stated in the relevant
      consolidated financial statements of the Group, but excluding any Relevant
      Ships

                 

              	 
      	
                $_____________
      plus

                 

              
	
                (b)

              	
                the
      aggregate of the market value of the Relevant Ships,  as such
      market value shall have been most recently determined (as of the date of
      the relevant calculation) pursuant to Clause 10.1(v) by means of
      valuations obtained by the Agent in accordance therewith (and not the
      value of the Relevant Ships as stated in the relevant consolidated
      financial statements of the Group)

                 

              	 
      	
                $_____________
      equals

                 

              
	
                Total
      Market Value Adjusted Assets

                 

              	
                 

              	$_____________.
	
                Net
      Asset Value (Total Debt minus Total 

                Market
      Value Adjusted Assets) as of the Statement Date

                 

              	
                 

              	
                 

                                                    $_____________ 
      

              
	
                Clause 10.1(v)(iii):  Book
      Equity:

                 

              	 
      	 
      
	
                Aggregate
      of the amounts paid-up or credited as paid-up on the Guarantor’s issued
      share capital and the amount of the consolidated capital and revenue
      reserves of the Group (including any share premium account, capital
      redemption reserve fund and any credit balance on the consolidated profit
      and loss account of the Group) all as shown by the latest audited
      consolidated balance sheet and profit and loss account of the Group
      delivered under the Loan Agreement

                 

              	
                 

              	
                 
      

                 

                 

                 

                 

                $_____________ minus

              
	
                (a)

              	
                any
      debit balance on such consolidated profit and loss account

                 

              	 
      	
                $_____________

                 

              
	
                (b)

              	
                any
      amount shown in such consolidated balance sheet in respect of goodwill
      (including goodwill arising on consolidation) and other intangible
      assets

              	 
      	
                $_____________

              

      

    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    
      
        
          
            
              
                	
                        (c)

                      	
                        so
      far as not otherwise excluded as attributable to minority interests, a sum
      equal to the aggregate of the amount of which the book value of any fixed
      assets of any member of the Group has been written up after
      December 31, 2005 (or, in the case of a company becoming a subsidiary
      after that date, the date on which that company became a subsidiary) by
      way of revaluation and, for the purposes of this paragraph (c) any
      increase in the book value of any fixed assets resulting from its transfer
      by one member of the Group to another member of the Group shall be deemed
      to result from a writing up of its book value by way of
      revaluation

                         

                      	 
      	
                        $_____________

                         

                      
	
                        (d)

                      	
                        amounts
      set aside for taxation as at the date of such balance sheet and making
      such adjustments as may be appropriate in respect of any significant
      additional taxation expected to result from transactions carried out by
      any member of the Group after such date and not reflected in
      that  balance sheet

                         

                      	 
      	
                        $_____________

                         

                      
	
                        (e)

                      	
                        all
      amounts attributable to minority interests in subsidiaries

                         

                      	 
      	
                        $_____________  and
      plus/minus

                         

                      
	
                        (f)

                      	
                        adjustments
      appropriate in respect of any variation in the amount of such paid up
      spare capital or any such reserves after the of the attached financial
      statements (but so that no such adjustment shall be made in respect of any
      variation in profit and loss account except to the extent of any profit or
      loss, calculated on a cumulative basis, recorded in the consolidated
      profit and loss account of the Group delivered to the Agent before the
      date of this Agreement, or under Clause 10.1(g) in respect of any
      subsequent period)

                         

                      	 
      	
                        $_____________  plus/minus

                         

                      
	
                        (g)

                      	
                        adjustments
      appropriate in respect of any distribution declared, recommended or made
      by any member of the Group (otherwise than attributable directly or
      indirectly to the Guarantor) out of profits earned up to and including the
      date of the latest audited balance sheet of that member of the Group to
      the extent that such distribution is not provided for in that balance
      sheet

                         

                      	 
      	
                        $_____________
      plus/minus

                         

                      

              

            

          

        

      

    
       

      
        
          
             

              
                 

              

            

          

          
            7

            
              

            

          

          
             

          

        

      

      

        
          
            
              
                
                  
                    
                      
                        	
                                (h)

                              	
                                adjustments
      appropriate in respect of any variation in the interests of the Guarantor
      in its subsidiaries since the date of the latest published audited
      consolidated balance sheet of the Group

                                 

                              	 
      	
                                $_____________
      and plus/minus

                                 

                              
	
                                (i)

                              	
                                if
      the calculation is required for the purpose of or in connection with a
      transaction under or in connection with when any company is to become or
      cease to be a subsidiary of the Guarantor, adjustments appropriate if that
      transaction has been carried into effect

                                 

                              	 
      	
                                $____________
      equals

                                 

                              
	Book
      Equity  as of the Statement Date 	 
      	
                                                                            
      $_______________ 

                              

                      

                    

                  

                

              

            

          

      

       

    

    
      
        
           

            
               

            

          

        

        
          8

          
            

          

        

        
           

        

      

    

    

    APPENDIX
B

     

    FORM OF
EARNINGS ASSIGNMENT

     

    

     

    

     

    
       

      
        
          
             

              
                 

              

            

          

          
            9

            
              

            

          

          
             

          

        

      

       

    

    

    APPENDIX
C

     

    FORM OF
INSURANCE ASSIGNMENT

     

    

     

    

    
       

      
        
          
             

              
                 

              

            

          

          
            10

            
              

            

          

          
             

          

        

      

    

    

    APPENDIX
D

     

    FORM OF
CHARTER ASSIGNMENT

     

    

     

    
       

      
        
          
             

              
                 

              

            

          

          
            11

            
              

            

          

          
             

          

        

      

    

     

    

    APPENDIX
E

     

    FORM OF
MANAGER’S UNDERTAKING

     

    

     

    

     

    

    
       

      
        
          
             

              
                 

              

            

          

          
            12

            
              

            

          

          
             

          

        

      

    

     

    

    APPENDIX
F

     

    FORM OF
MORTGAGE

     

    

     

     

    
       

      
        
          
             

              
                 

              

            

          

          
            13

            
              

            

          

          
             

          

        

    

    APPENDIX
G

     

    FORM OF
NOTE

     

    

     

     

     

    
       

      
        
          
             

              
                 

              

            

          

          
            14

            
              

            

          

          
             

          

        

      

    

    
 

    APPENDIX
H

     

    FORM
OF

    ASSIGNMENT
AND ACCEPTANCE

     

    ASSIGNMENT
AND ACCEPTANCE

     

    Dated as
of ___________

     

    Reference
is made to the Loan Agreement dated as of April 24, 2008 (as such may have
been and may be further amended, restated, supplemented or otherwise modified
from time to time in accordance therewith, the “Loan Agreement”) among Japan
II Shipping Company Limited, as Borrower, Top Ships Inc., as Guarantor, the
banks and financial institutions described therein as Lenders, and DVB Bank AG
as Swap Bank, Agent and Security Trustee.  Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined
and the rules of construction and interpretation in Clause 1 of the Loan
Agreement apply hereto.

     

    ______________________
(the “Assignor”) and
________________________ (the “Assignee”) agree as
follows:

     

    1.           As
of the Effective Date (defined in Paragraph 4 below), the Assignor hereby
sells and assigns to the Assignee, and the Assignee hereby purchases and assumes
from the Assignor, that interest in and to all of the Assignor’s rights and
obligations under the Loan Agreement that represents the Percentage Interest
specified in Section 1 of Annex 1 hereto in the Assignor’s Commitment
and the Advance owing to the Assignor.  After giving effect to such
sale and assignment, the Assignee’s Commitment and the amount of the Advance
owing to the Assignee will be as set forth in Section 2 of
Annex 1.

     

    2.           The
Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; and (b) makes no representation or
warranty and assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Loan Agreement,
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Agreement, or any other instrument or document furnished
pursuant thereto or (ii) the financial condition of the Obligors or the
performance or observance by the Obligors of any of their obligations under the
Loan Agreement or any other instrument or document furnished pursuant
thereto.

     

    3.           The
Assignee (a) confirms that it has received a copy of the Loan Agreement and
the other Finance Documents, together with copies of the financial statements
referred to in the Loan Agreement, and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (b) agrees that it will, independently
and without reliance upon the Agent, the Security Trustee, the Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Agreement and the other Finance Documents;
(c) appoints and authorizes each of the Agent and the Security Trustee to
take such action as agent on its behalf and to exercise such powers under the
Loan Agreement and the other Finance Documents as are delegated to the Agent and
the Security Trustee by the terms thereof, together with such powers as are
reasonably incidental thereto; (d) agrees that it 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    will be bound by the Loan Agreement and perform in accordance with
its terms all of the obligations that by the terms of the Loan Agreement are
required to be performed by it as a Lender; and (e) specifies as its
address for notices the offices set forth beneath its name on the signature page
hereof.

     

    4.           The
effective date (the “Effective
Date”) for this Assignment and Acceptance shall be the date of acceptance
hereof by the Agent, unless a later date is specified in Annex 1 hereto,
provided that no Assignment and Acceptance shall be effective until and unless
the terms and conditions of Clause 19.2 of the Loan Agreement are complied
with.  Following the execution of this Assignment and Acceptance, two
counterparts will be promptly delivered by the Assignee to the Agent, and the
Agent shall promptly forward a counterpart to the Borrower.

     

    5.           Upon
such acceptance and recording, as of the Effective Date, (a) the Assignee
shall be a party to the Loan Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender; and
(b) the Assignor shall, to the extent provided in the Loan Agreement,
relinquish its rights and be released from its obligations under the Loan
Agreement.

     

    6.           Upon
such acceptance and recording, from and after the Effective Date, the Agent
shall make all payments under the Loan Agreement in respect of the assignment
effected hereby (including all payments of principal, interest and commitment
fees with respect thereto) to the Assignee.  The Assignor and Assignee
shall make all appropriate adjustments in payments under the Loan Agreement for
periods prior to the Effective Date directly between themselves.

     

    7.           This
Assignment and Acceptance shall be governed by, and shall be construed in
accordance with, the laws of the State of New York.

     

     

    
      
        
          
            
              
                	
                        [NAME
      OF ASSIGNOR]

                         

                         

                         

                         

                      	
                        [NAME
      OF ASSIGNEE]

                      
	
                        By:  _____________________________

                      	
                        By:  _____________________________

                      
	
                        Name:

                      	
                        Name:

                      
	
                        Title:

                      	
                        Title:

                      
	 	 
	 
      

                        Address
      for Notices to the Assignee:

                        ____________________________

                        ____________________________

                        ____________________________

                      	 
	 	 
	 
      

                        Address
      of Assignee’s Lending Office:

                        ____________________________

                        ____________________________

                        ____________________________

                      	 

              

            

          

        

      

    
    

    
    

    

    
       

      
        
          
             

              
                 

              

            

          

          
            2

            
              

            

          

          
             

          

        

      

    

    

    Annex
1

    to

    Assignment
and Acceptance

    Dated as
of _________

     

    Section
1

     

    Percentage
Interest:

     

    Section
2

     

    Assignee’s
Commitment:                                                           $

     

    Aggregate
Outstanding Principal

    Amount of
Advances owing to

    the
Assignee:                                                                              $

     

    Section
3

     

    Effective
Date:

     

    NAME OF
ASSIGNOR

     

    
      
        	
                By:

              	
                 _______________________

              
	 	Name:
	 	Title:

      

    

     

     

    

    

     

     

    SK 23116 0005
1007433

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