Document:

AMENDMENT NO. 1 TO
MANAGEMENT AGREEMENT DATED JUNE 27, 1988 

      BETWEEN B+H OCEAN CARRIERS
LTD. AND B+H MANAGEMENT LTD. (“the 

      Management
Agreement”)

      

      (A)         The
Management Agreement is hereby amended as follows:

       

      
        	
                 
      

              	
                (1)

              	
                Section
      10 of the Management Agreement is hereby amended and restated to read in
      its entirety as follow:

              

      

       

      “Certain Conflicts of
Interest.  The Company hereby acknowledges that the Manager and
certain of its affiliates provide services similar to those provided hereunder
to persons other than the Company, including entities in which the Manager or
such affiliates have economic interests.  In order to avoid even the
appearance of a conflict of interest, the Manager agree that (a) at least five 5
days in advance of the entering into any commitment to acquire or dispose of any
type of commercial cargo vessel, or any material direct or indirect interest in
such vessels, by the Manager or any of its affiliates on their own behalf or on
behalf of personas other than Company, the Manager will give the Audit Committee
of the Company’s Board of Directors written notice containing full disclosure of
the material terms of such acquisition or disposition; (b) it shall not
discriminate against the Company in the selection, purchase or sale of any type
of oceangoing cargo vessel; and (c) neither the Manager nor any of its
affiliates will for their own account purchase from or sell to the Company any
vessels, or any material direct or indirect interest therein, during the term of
this Agreement without the unanimous approval of the Audit Committee of the
Company’s Board of Directors.”

      

      
        	
                 
      

              	
                (2)

              	
                Schedule
      I of the Management Agreement is hereby amended and restated to read in
      its entirety as follows:

              

      

       

      “For
management services provided pursuant to this Agreement, the Manager shall
receive a fixed fee of $4,000 per month per vessel, and any increases in such
fixed fee shall be determined on each anniversary of this Agreement and be based
on any increases in the Urban Wage Earners and Clerical Workers Consumer Price
Index for the New York metropolitan area over the level reported by that Index
for the month of June 1988.”

      

      (B)         All
other terms and conditions of the Management Agreement remain
unaltered.

      

      
        
          
            
              	 
      	 	 
      
	
                      FOR
      B+H OCEAN CARRIERS LTD.

                    	 	
                      FOR
      B+H MANAGEMENT
LTD.

                    

            

          

        

      

      

      Dated as
ofAMENDMENT
TO MANAGEMENT SERVICES AGREEMENT

    

    THIS AMENDMENT, made as of
June 1, 2009 by and between B+H OCEAN CARRIERS LTD. of 80 Broad Street,
Monrovia, Liberia (“Ocean”) and B+H Management LTD. of Par-la-Ville Place, 14
Par-la-Ville Road, Hamilton, Bermuda (“BHM”).

    

    WHEREAS, Ocean and BHM are
parties to a Management Services Agreement dated June 27, 1988 as amended on
October 10, 1995 and as further amended and adjusted from time to time (the
“MSA”), in respect of the management by BHM of specified vessels within the
fleet of oceangoing vessels operated by Ocean (the “Vessels”); and

    

    WHEREAS, Ocean and BHM with by
means of this Amendment to add a further Vessel to management by BHM under the
MSA.

    

    NOW THEREFORE, in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, the parties agree that:

    

    As from
the date hereof BHM shall undertake the pre-delivery administrative management
under the MSA, at a monthly fee therefore of USD 10,500.00, of the +A1 DP2
Offshore Oilfield Accommodation Work Barge owned by Straits Offshore Ltd. of
Singapore (Hull No. 1150; under construction by NGV TECH Sdn Bhd at Sijankang,
Malaysia pursuant to contract dated April 11, 2008).

    

    IN WITNESS WHEREOF, the
parties have duly executed this Amendment to Management Services Agreement as of
the day and year first above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    B+H
      OCEAN CARRIERS LTD.

                                  
	 
      	 
      
	
                                    By

                                  	 
      
	 
      	
                                    Trevor
      J. Williams – Director

                                  
	 
      	 
      
	
                                    B+H
      MANAGEMENT LTD.

                                  
	 
      	 
      
	      
                                    By

                                  	
                                     

                                  
	 
      	
                                    Deborah
      L. Paterson -
DirectorLoan
Agreement

     

    relating
to a $34,000,000 facility to finance four MR Product Tankers

     

    Dated            November 2007

    

    Agawam
Shipping Corp.

    

    and

    

    Aquidneck
Shipping Corp.

    

    and

     

    Anawan
Shipping Corp.

     

    and

     

    Isabelle
Shipholdings Corp.

    

    and

    

    Boss
Tankers Ltd.

    (as
joint and several Borrowers)

     

    Bank
of Scotland plc

    (as
Lender)

     

    Bank
of Scotland plc

    (as
Swap Bank)

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Contents

     

    
      
        
          	
                  1

                	
                  Definitions
      and interpretation

                	
                  1

                
	
                  1.1

                	
                  Definitions

                	
                  1

                
	
                  1.2

                	
                  Interpretation

                	
                  11

                
	 
      	 
      	 
      
	
                  2

                	
                  Facility

                	
                  14

                
	 
      	 
      	 
      
	
                  3

                	
                  Drawdown

                	
                  14

                
	
                  3.1

                	
                  Request
      for Advance

                	
                  14

                
	
                  3.2

                	
                  Availability

                	
                  14

                
	
                  3.3

                	
                  Drawdown
      Notice irrevocable

                	
                  14

                
	
                  3.4

                	
                  Disbursement
      of Advance

                	
                  15

                
	
                  3.5

                	
                  Disbursement
      of Advance to third party

                	
                  15

                
	 
      	 
      	 
      
	
                  4

                	
                  Interest

                	
                  15

                
	
                  4.1

                	
                  Payment
      of normal interest

                	
                  15

                
	
                  4.2

                	
                  Normal
      rate of interest

                	
                  15

                
	
                  4.3

                	
                  Payment
      of accrued interest

                	
                  15

                
	
                  4.4

                	
                  Notification
      of market disruption

                	
                  15

                
	
                  4.5

                	
                  Suspension
      of drawdown.

                	
                  15

                
	
                  4.6

                	
                  Negotiation
      of alternative rate of interest

                	
                  15

                
	
                  4.7

                	
                  Application
      of agreed alternative rate of interest

                	
                  16

                
	
                  4.8

                	
                  Alternative
      rate of interest in absence of agreement

                	
                  16

                
	
                  4.9

                	
                  Notice
      of prepayment

                	
                  16

                
	
                  4.10

                	
                  Prepayment

                	
                  16

                
	
                  4.11

                	
                  Application
      of prepayment

                	
                  16

                
	 
      	 
      	 
      
	
                  5

                	
                  Interest
      Periods

                	
                  16

                
	
                  5.1

                	
                  Commencement
      of Interest Periods

                	
                  16

                
	
                  5.2

                	
                  Duration
      of normal Interest Periods

                	
                  16

                
	
                  5.3

                	
                  Duration
      of Interest Periods for repayment instalments

                	
                  17

                
	
                  5.4

                	
                  Duration
      of Interest Periods during the relevant Availability
Period

                	
                  17

                
	
                  5.5

                	
                  Non-availability
      of matching deposits for Interest Period selected

                	
                  17

                
	 
      	 
      	 
      
	
                  6

                	
                  Default
      interest

                	
                  17

                
	
                  6.1

                	
                  Payment
      of default interest on overdue amounts

                	
                  17

                
	
                  6.2

                	
                  Default
      rate of interest

                	
                  17

                
	
                  6.3

                	
                  Calculation
      of default rate of interest

                	
                  18

                
	
                  6.4

                	
                  Notification
      of interest periods and default rates

                	
                  18

                
	
                  6.5

                	
                  Payment
      of accrued default interest

                	
                  18

                
	
                  6.6

                	
                  Compounding
      of default interest

                	
                  18

                
	
                  6.7

                	
                  Application
      to Master Agreements

                	
                  18

                
	 
      	 
      	 
      
	
                  7

                	
                  Repayment
      and prepayment

                	
                  18

                
	
                  7.1

                	
                  Amount
      of repayment instalments

                	
                  18

                
	
                  7.2

                	
                  Repayment
      Dates

                	
                  19

                
	
                  7.3

                	
                  Final
      Repayment Date

                	
                  20

                
	
                  7.4

                	
                  Voluntary
      prepayment

                	
                  20

                
	
                  7.5

                	
                  Conditions
      for voluntary prepayment

                	
                  20

                
	
                  7.6

                	
                  Effect
      of notice of prepayment

                	
                  20

                
	
                  7.7

                	
                  Mandatory
      prepayment

                	
                  20

                
	
                  7.8

                	
                  Amounts
      payable on prepayment

                	
                  21

                
	
                  7.9

                	
                  Application
      of partial prepayment

                	
                  21

                
	
                  7.10

                	
                  No
      reborrowing

                	
                  21

                
	
                  7.11

                	
                  Unwinding
      of Designated Transactions

                	
                  21

                

        

      

    

     

    
      
         

      

      
        Page
1

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  8

                	
                  Conditions
      precedent

                	
                  21

                
	
                  8.1

                	
                  Documents,
      fees and no default

                	
                  21

                
	
                  8.2

                	
                  Waivers
      of conditions precedent

                	
                  22

                
	 
      	 
      	 
      
	
                  9

                	
                  Representations
      and warranties

                	
                  22

                
	
                  9.1

                	
                  General

                	
                  22

                
	
                  9.2

                	
                  Status

                	
                  22

                
	
                  9.3

                	
                  Share
      capital and ownership

                	
                  22

                
	
                  9.4

                	
                  Corporate
      power

                	
                  22

                
	
                  9.5

                	
                  Consents
      in force

                	
                  23

                
	
                  9.6

                	
                  Legal
      validity; effective Security Interests

                	
                  23

                
	
                  9.7

                	
                  No
      third party Security Interests

                	
                  23

                
	
                  9.8

                	
                  No
      conflicts

                	
                  23

                
	
                  9.9

                	
                  No
      withholding taxes

                	
                  23

                
	
                  9.10

                	
                  No
      default

                	
                  23

                
	
                  9.11

                	
                  Information

                	
                  24

                
	
                  9.12

                	
                  No
      litigation

                	
                  24

                
	
                  9.13

                	
                  Compliance
      with certain undertakings

                	
                  24

                
	
                  9.14

                	
                  Taxes
      paid

                	
                  24

                
	
                  9.15

                	
                  ISM
      Code and ISPS Code compliance

                	
                  24

                
	
                  9.16

                	
                  No
      filing or stamp taxes

                	
                  24

                
	
                  9.17

                	
                  Own
      account

                	
                  24

                
	
                  9.18

                	
                  Pari
      passu ranking

                	
                  24

                
	
                  9.19

                	
                  No
      sovereign immunity

                	
                  25

                
	 
      	 
      	 
      
	
                  10

                	
                  General
      undertakings

                	
                  25

                
	
                  10.1

                	
                  General

                	
                  25

                
	
                  10.2

                	
                  Title;
      negative pledge

                	
                  25

                
	
                  10.3

                	
                  No
      disposal of assets

                	
                  25

                
	
                  10.4

                	
                  No
      other liabilities or obligations to be incurred

                	
                  25

                
	
                  10.5

                	
                  Information
      provided to be accurate

                	
                  25

                
	
                  10.6

                	
                  Provision
      of financial statements and other information

                	
                  25

                
	
                  10.7

                	
                  Form
      of financial statements

                	
                  26

                
	
                  10.8

                	
                  Shareholder
      and creditor notices

                	
                  26

                
	
                  10.9

                	
                  Consents

                	
                  26

                
	
                  10.10

                	
                  Maintenance
      of Security Interests

                	
                  26

                
	
                  10.11

                	
                  Notification
      of litigation

                	
                  27

                
	
                  10.12

                	
                  No
      amendment to Master Agreements

                	
                  27

                
	
                  10.13

                	
                  Principal
      place of business

                	
                  27

                
	
                  10.14

                	
                  Confirmation
      of no default

                	
                  27

                
	
                  10.15

                	
                  Notification
      of default

                	
                  27

                
	
                  10.16

                	
                  Provision
      of further information

                	
                  28

                
	
                  10.17

                	
                  Due
      diligence

                	
                  28

                
	 
      	 
      	 
      
	
                  11

                	
                  Corporate
      undertakings

                	
                  28

                
	
                  11.1

                	
                  General

                	
                  28

                
	
                  11.2

                	
                  Maintenance
      of status

                	
                  28

                
	
                  11.3

                	
                  Negative
      undertakings

                	
                  28

                
	 
      	 
      	 
      
	
                  12

                	
                  Insurance

                	
                  29

                
	
                  12.1

                	
                  General

                	
                  29

                
	
                  12.2

                	
                  Maintenance
      of obligatory insurances

                	
                  29

                
	
                  12.3

                	
                  Terms
      of obligatory insurances

                	
                  29

                
	
                  12.4

                	
                  Further
      protections for the Lender

                	
                  30

                
	
                  12.5

                	
                  Renewal
      of obligatory insurances

                	
                  30

                
	
                  12.6

                	
                  Copies
      of policies; letters of undertaking

                	
                  31

                
	
                  12.7

                	
                  Copies
      of certificates of entry

                	
                  31

                
	
                  12.8

                	
                  Deposit
      of original policies

                	
                  31

                
	
                  12.9

                	
                  Payment
      of premiums

                	
                  32

                

        

      

    

     

    
      
         

      

      
        Page
2

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  12.10

                	
                  Guarantees

                	
                  32

                
	
                  12.11

                	
                  Compliance
      with terms of insurances

                	
                  32

                
	
                  12.12

                	
                  Alteration
      to terms of insurances

                	
                  32

                
	
                  12.13

                	
                  Settlement
      of claims

                	
                  32

                
	
                  12.14

                	
                  Provision
      of copies of communications

                	
                  32

                
	
                  12.15

                	
                  Provision
      of information

                	
                  33

                
	
                  12.16

                	
                  Mortgagee's
      interest, additional perils

                	
                  33

                
	 
      	 
      	 
      
	
                  13

                	
                  Ship
      covenants

                	
                  33

                
	
                  13.1

                	
                  General

                	
                  33

                
	
                  13.2

                	
                  Ship's
      name and registration

                	
                  33

                
	
                  13.3

                	
                  Repair
      and classification

                	
                  34

                
	
                  13.4

                	
                  Modification

                	
                  34

                
	
                  13.5

                	
                  Removal
      of parts

                	
                  34

                
	
                  13.6

                	
                  Surveys

                	
                  34

                
	
                  13.7

                	
                  Inspection

                	
                  34

                
	
                  13.8

                	
                  Prevention
      of and release from arrest

                	
                  34

                
	
                  13.9

                	
                  Compliance
      with laws etc.

                	
                  35

                
	
                  13.10

                	
                  Provision
      of information

                	
                  35

                
	
                  13.11

                	
                  Notification
      of certain events

                	
                  35

                
	
                  13.12

                	
                  Restrictions
      on chartering, appointment of managers etc.

                	
                  36

                
	
                  13.13

                	
                  Notice
      of Mortgage

                	
                  36

                
	
                  13.14

                	
                  Sharing
      of Earnings

                	
                  36

                
	 
      	 
      	 
      
	
                  14

                	
                  Security
      cover

                	
                  36

                
	
                  14.1

                	
                  Minimum
      required security cover

                	
                  36

                
	
                  14.2

                	
                  Provision
      of additional security; prepayment

                	
                  37

                
	
                  14.3

                	
                  Value
      of additional vessel security

                	
                  37

                
	
                  14.4

                	
                  Valuations
      binding

                	
                  37

                
	
                  14.5

                	
                  Provision
      of information

                	
                  37

                
	
                  14.6

                	
                  Payment
      of valuation expenses

                	
                  37

                
	
                  14.7

                	
                  Application
      of prepayment

                	
                  37

                
	 
      	 
      	 
      
	
                  15

                	
                  Payments
      and calculations

                	
                  38

                
	
                  15.1

                	
                  Currency
      and method of payments

                	
                  38

                
	
                  15.2

                	
                  Payment
      on non-Business Day

                	
                  38

                
	
                  15.3

                	
                  Basis
      for calculation of periodic payments

                	
                  38

                
	
                  15.4

                	
                  Lender
      accounts

                	
                  38

                
	
                  15.5

                	
                  Accounts
      prima facie evidence

                	
                  38

                
	
                  15.6

                	
                  Source
      of funds

                	
                  38

                
	 
      	 
      	 
      
	
                  16

                	
                  Application
      of receipts

                	
                  39

                
	
                  16.1

                	
                  Normal
      order of application

                	
                  39

                
	
                  16.2

                	
                  Variation
      of order of application

                	
                  39

                
	
                  16.3

                	
                  Notice
      of variation of order of application

                	
                  39

                
	
                  16.4

                	
                  Appropriation
      rights overridden

                	
                  40

                
	 
      	 
      	 
      
	
                  17

                	
                  Application
      of Earnings

                	
                  40

                
	
                  17.1

                	
                  Payment
      of Earnings

                	
                  40

                
	
                  17.2

                	
                  Location
      of accounts

                	
                  40

                
	
                  17.3

                	
                  Debits
      for expenses etc.

                	
                  40

                
	 
      	 
      	 
      
	
                  18

                	
                  Events
      of Default

                	
                  40

                
	
                  18.1

                	
                  Events
      of Default

                	
                  40

                
	
                  18.2

                	
                  Actions
      following an Event of Default

                	
                  43

                
	
                  18.3

                	
                  Termination
      of Commitment

                	
                  43

                
	
                  18.4

                	
                  Acceleration
      of the Advances

                	
                  43

                
	
                  18.5

                	
                  Multiple
      notices; action without notice

                	
                  43

                
	
                  18.6

                	
                  Exclusion
      of Lender/Swap Bank liability

                	
                  43

                

        

      

    

     

    
      
         

      

      
        Page
3

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  18.7

                	
                  [Intentionally
      left blank]

                	
                  44

                
	
                  18.8

                	
                  Interpretation

                	
                  44

                
	 
      	 
      	 
      
	
                  19

                	
                  Fees
      and expenses

                	
                  44

                
	
                  19.1

                	
                  Arrangement
      and commitment fees

                	
                  44

                
	
                  19.2

                	
                  Prepayment
      fee

                	
                  44

                
	
                  19.3

                	
                  Costs
      of negotiation, preparation etc.

                	
                  44

                
	
                  19.4

                	
                  Costs
      of variations, amendments, enforcement etc.

                	
                  44

                
	
                  19.5

                	
                  Certification
      of amounts

                	
                  44

                
	 
      	 
      	 
      
	
                  20

                	
                  Indemnities

                	
                  45

                
	
                  20.1

                	
                  Indemnities
      regarding borrowing and repayment of the Advances

                	
                  45

                
	
                  20.2

                	
                  Breakage
      costs

                	
                  45

                
	
                  20.3

                	
                  Miscellaneous
      indemnities

                	
                  45

                
	
                  20.4

                	
                  Currency
      indemnity

                	
                  46

                
	
                  20.5

                	
                  Application
      to Master Agreements

                	
                  46

                
	
                  20.6

                	
                  Certification
      of amounts

                	
                  46

                
	 
      	 
      	 
      
	
                  21

                	
                  No
      set-off or Tax Deduction; value added tax

                	
                  46

                
	
                  21.1

                	
                  Definitions

                	
                  46

                
	
                  21.2

                	
                  No
      set-off and counterclaim

                	
                  47

                
	
                  21.3

                	
                  Tax
      gross-up

                	
                  47

                
	
                  21.4

                	
                  Tax
      indemnity

                	
                  47

                
	
                  21.5

                	
                  Tax
      Credit

                	
                  47

                
	
                  21.6

                	
                  Stamp
      taxes

                	
                  48

                
	
                  21.7

                	
                  Value
      added tax

                	
                  48

                
	 
      	 
      	 
      
	
                  22

                	
                  Illegality,
      etc.

                	
                  48

                
	
                  22.1

                	
                  Illegality

                	
                  48

                
	
                  22.2

                	
                  Notification
      and effect of illegality

                	
                  48

                
	
                  22.3

                	
                  Mitigation

                	
                  48

                
	 
      	 
      	 
      
	
                  23

                	
                  Increased
      costs

                	
                  49

                
	
                  23.1

                	
                  Definitions

                	
                  49

                
	
                  23.2

                	
                  Increased
      Costs

                	
                  50

                
	
                  23.3

                	
                  Optional
      prepayment

                	
                  50

                
	 
      	 
      	 
      
	
                  24

                	
                  Set-off

                	
                  50

                
	
                  24.1

                	
                  Application
      of credit balances

                	
                  50

                
	
                  24.2

                	
                  Existing
      rights unaffected

                	
                  51

                
	
                  24.3

                	
                  No
      Security Interest

                	
                  51

                
	 
      	 
      	 
      
	
                  25

                	
                  Transfers
      and changes in lending office

                	
                  51

                
	
                  25.1

                	
                  Transfer
      by Borrowers

                	
                  51

                
	
                  25.2

                	
                  Assignment
      by Lender

                	
                  51

                
	
                  25.3

                	
                  Rights
      of assignee

                	
                  51

                
	
                  25.4

                	
                  Sub-participation;
      subrogation assignment

                	
                  51

                
	
                  25.5

                	
                  Disclosure
      of information

                	
                  51

                
	
                  25.6

                	
                  Change
      of lending office

                	
                  51

                
	 
      	 
      	 
      
	
                  26

                	
                  Variations
      and waivers

                	
                  52

                
	
                  26.1

                	
                  Variations,
      waivers etc. by Lender

                	
                  52

                
	
                  26.2

                	
                  Exclusion
      of other or implied variations

                	
                  52

                
	 
      	 
      	 
      
	
                  27

                	
                  Notices

                	
                  52

                
	
                  27.1

                	
                  Method
      and delivery

                	
                  52

                
	
                  27.2

                	
                  Addresses

                	
                  52

                
	
                  27.3

                	
                  Receipt

                	
                  53

                

        

      

    

     

    
      
         

      

      
        Page
4

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  27.4

                	
                  Electronic
      communication

                	
                  54

                
	
                  27.5

                	
                  Service
      Documents

                	
                  54

                
	
                  27.6

                	
                  Valid
      notices

                	
                  54

                
	 
      	 
      	 
      
	
                  28

                	
                  Joint
      and several liability

                	
                  54

                
	
                  28.1

                	
                  General

                	
                  54

                
	
                  28.2

                	
                  No
      impairment of Borrower's obligations

                	
                  54

                
	
                  28.3

                	
                  Principal
      debtors

                	
                  54

                
	
                  28.4

                	
                  Subordination

                	
                  55

                
	
                  28.5

                	
                  Borrower's
      required action

                	
                  55

                
	 
      	 
      	 
      
	
                  29

                	
                  Relationship
      between the Lender and the Swap Bank

                	
                  55

                
	 
      	 
      	 
      
	
                  30

                	
                  Supplemental

                	
                  55

                
	
                  30.1

                	
                  Rights
      cumulative, non-exclusive

                	
                  55

                
	
                  30.2

                	
                  Invalidity

                	
                  56

                
	
                  30.3

                	
                  Counterparts

                	
                  56

                
	
                  30.4

                	
                  Third
      party rights

                	
                  56

                
	 
      	 
      	 
      
	
                  31

                	
                  Governing
      law

                	
                  56

                
	 
      	 
      	 
      
	
                  32

                	
                  Jurisdiction

                	
                  56

                
	
                  32.1

                	
                  Jurisdiction
      of the English courts

                	
                  56

                
	
                  32.2

                	
                  Proceedings
      in other jurisdictions

                	
                  56

                
	
                  32.3

                	
                  Waiver
      of objections

                	
                  56

                
	 
      	 
      	 
      
	
                  33

                	
                  Service
      of process

                	
                  56

                
	
                  33.1

                	
                  Address
      for service

                	
                  56

                
	
                  33.2

                	
                  Agreed
      method of service

                	
                  57

                
	 
      	 
      	 
      
	
                  Schedule 1
      - Drawdown Notice

                	
                  58

                
	 
      	 
      
	
                  Schedule 2
      - Condition precedent documents

                	
                  59

                
	 
      	 
      
	
                  Schedule 3
      – Mandatory Cost formula

                	
                  63

                
	 
      	 
      
	
                  Schedule 4
      - Designation notice

                	
                  64

                
	 
      	 
      
	
                  Appendix
      A - Form of Mortgage

                	 
      
	 
      	 
      
	
                  Appendix
      B – Form of Deed of Covenant

                	 
      
	 
      	 
      
	
                  Appendix
      C - Form of General Assignment

                	 
      
	 
      	 
      
	
                  Appendix
      D - Form of Accounts Security Deed

                	 
      
	 
      	 
      
	
                  Appendix
      E - Form of Guarantee

                	 
      
	 
      	 
      
	
                  Appendix
      F – Form of Master Agreement Assignment

                	 
      

        

      

    

     

    
      
         

      

      
        Page
5

        
          

        

      

      
         

      

    

    Loan
Agreement

     

    Dated                                            2007

     

    Between

     

    
      	
              (1)

            	
              Agawam Shipping
      Corp.;

            

    

     

    
      	
              (2)

            	
              Aquidneck Shipping
      Corp.;

            

    

     

    
      	
              (3)

            	
              Anawan Shipping
      Corp.;

            

    

     

    
      	
              (4)

            	
              Isabelle Shipholdings
      Corp.;

            

    

     

    
      	
              (5)

            	
              Boss Tankers
      Ltd.;

            

    

     

    as joint
and several Borrowers (as that term is defined below);

     

    
      	
              (6)

            	
              Bank of Scotland plc as
      the Lender (as that term is defined below);
and

            

    

     

    
      	
              (7)

            	
              Bank of Scotland plc as
      the Swap Bank (as that term is defined
below).

            

    

     

    Background

     

    
      	
              A

            	
              The
      Lender has agreed to make available to the Borrowers a facility of up to
      $34,000,000 in respect of (a) the refinancing of the Existing Loan, and
      (b) the financing of the product tanker type vessel named "Pequod". Each
      Ship is the subject of a conversion project which will convert each Ship
      from a single hull status to a fully IMO compliant double hull
      status.

            

    

     

    
      	
              B

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

            

    

     

    
      	
              C

            	
              The
      Lender and the Swap Bank have agreed to share pari passu in the security
      to be granted to the Lender pursuant to this
  Agreement.

            

    

     

    It
is agreed

     

    
      	
              1

            	
              Definitions
      and interpretation

            

    

     

    
      	
              1.1

            	
              Definitions

            

    

     

    Subject
to Clause 1.2, in this Agreement the following definitions
apply.

     

    Accounts Security Deed means a
deed creating security in respect of the Earnings Accounts in the form set out
in Appendix D.

     

    Advance means each of
the:

     

    
      	
               
      

            	
              (a)

            	
              Anawan
      Advance;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Agawam
      Advance;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Aquidneck
      Advance; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              Pequod
      Advance.

            

    

     

    
      
         

      

      
        Page
1

        
          

        

      

      
         

      

    

    Agawam Advance means an amount
which shall not exceed $8,500,000 and the principal amount outstanding in
respect thereof from time to time.

     

    Anawan Advance means an amount
which shall not exceed $8,500,000 and the principal amount outstanding in
respect thereof from time to time.

     

    Approved Manager means, in
relation to a Ship, B + H Management Limited whose  registered office
is at 3rd Floor, Par la Ville Place, 14 Par la Ville Road, Hamilton, HM08,
Bermuda or any other company which the Lender may approve from time to time as
the technical and commercial manager of the Ship.

     

    Aquidneck Advance means an
amount which shall not exceed $8,500,000 and the principal amount outstanding in
respect thereof from time to time.

     

    Approved Panel Broker means
any shipbroking firm nominated by the Borrowers and acceptable to the Lender
from amongst R.S Platou Shipbrokers A.S., Fearnleys AS, Clarksons, Arrow
Chartering UK Ltd., Bassoe Shipbrokers AS, Braemar Seascope Valuations Ltd.,
London, Lorentzen & Stemoco AS, Oslo, Compass Maritime Services LLC, NY
(or any other independent sale and purchase shipbroker of repute as may be
nominated by the Borrowers and acceptable to the Lender in its absolute
discretion).

     

    Authorised Officer has the
meaning given to it in paragraph 3 of Part A of Schedule 2.

     

    Availability Period
means:

     

    
      	
               
      

            	
              (a)

            	
              in
      respect of the Anawan Advance the period commencing on the date of this
      Agreement and ending on:

            

    

     

    
      	
               
      

            	
              (i)

            	
              1
      December 2007 (or such later date as the Lender may agree with the
      Borrowers); or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      earlier, the date on which the Commitment is fully borrowed, cancelled or
      terminated.

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      respect of the Agawan Advance the period commencing on the date of this
      Agreement and ending on:

            

    

     

    
      	
               
      

            	
              (i)

            	
              1
      December 2007 (or such later date as the Lender may agree with the
      Borrowers); or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      earlier, the date on which the Commitment is fully borrowed, cancelled or
      terminated.

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      respect of the Aquidneck Advance the period commencing on the date of this
      Agreement and ending on:

            

    

     

    
      	
               
      

            	
              (i)

            	
              1
      March 2008 (or such later date as the Lender may agree with the
      Borrowers); or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      earlier, the date on which the Commitment is fully borrowed, cancelled or
      terminated.

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      respect of the Pequod Advance the period commencing on the date of this
      Agreement and ending on:

            

    

     

    
      	
               
      

            	
              (i)

            	
              1
      December 2007 (or such later date as the Lender may agree with the
      Borrowers); or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      earlier, the date on which the Commitment is fully borrowed, cancelled or
      terminated.

            

    

     

    
      
         

      

      
        Page
2

        
          

        

      

      
         

      

    

    Borrowers means each
of:

     

    
      	
               
      

            	
              (a)

            	
              the
      Ship Owning Borrowers; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              Boss
      Tankers Ltd., a corporation incorporated in the Marshall Islands whose
      registered offices are at Trust Company Complex, Ajeltake Island, Majuro,
      Marshall Islands MH96960 and whose principal office is at Par la Ville
      Place, 14 Par la Ville Road, Hamilton HM 08,
  Bermuda.

            

    

     

    Business Day means a day
(other than a Saturday or Sunday) on which banks are open for general business
in Edinburgh, London and, in respect of a day on which a payment is required to
be made under a Finance Document, in New York City.

     

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

     

    Commitment means $34,000,000
as that amount may be reduced, cancelled or terminated in accordance with this
Agreement.

     

    Contractual Currency has the
meaning given in Clause 20.4.

     

    Deed of Accession means the
deed of accession and amendment to be entered into between the Borrowers and the
Swap Bank pursuant to which (a) Isabelle Shipholdings Corp. shall accede to the
Master Agreement and (b) the Borrowers shall make certain amendments to the
Master Agreement.

     

    Deed of Covenant means, in
relation to a Ship, a deed of covenant collateral to the Mortgage on the Ship in
the form set out in Appendix B.

     

    Designated Transaction means a
transaction which fulfils the following requirements:

     

    
      	
               
      

            	
              (a)

            	
              it
      is entered into by the Borrowers pursuant to a Master Agreement with the
      Swap Bank;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              it
      is designated by the Borrowers, by delivery by the Borrowers to the Swap
      Bank and the Lender of a notice of designation, as a Designated
      Transaction for the purposes of the Finance Documents, in the form set out
      in Schedule 4.

            

    

     

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

     

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

     

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

     

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

     

    
      	
               
      

            	
              (a)

            	
              all
      freight, hire and passage moneys, compensation payable to the Ship Owning
      Borrower owning the Ship 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;

            

    

     

    
      
         

      

      
        Page
3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              all
      moneys which 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 paragraphs (a) or (b) are pooled or shared with any other person,
      that proportion of the net receipts of the relevant pooling or sharing
      arrangement which is attributable to the
Ship.

            

    

     

    Earnings Account
means:

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to a Ship, an account in the name of the Ship Owning Borrower
      owning the Ship and held with the Lender and designated as
      follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              "Agawam Shipping Corp. Earnings
      Account" with account number
39452USD01;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              "Aquidneck Shipping Corp.
      Earnings Account" with account number
  39452USD02;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              "Anawan Shipping Corp. Earnings
      Account" with account number
39452USD03;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              "Isabelle Shipholdings Corp.
      Earnings Account" with account number
  39452USD05;

            

    

     

    
      	
               
      

            	
              (b)

            	
              account
      number 39452USD04 in the name of Boss Tankers Ltd., and held with the
      Lender and designated "Boss Tankers Ltd. Earnings Account" into
      which any monies held in the Ship Owning Borrower accounts shall be
      transferred,

            

    

     

    or any
other account (with that or another office of the Lender or with a bank or
financial institution other than the Lender) which is designated by the Lender
as the Earnings Account in relation to the Ship for the purposes of this
Agreement.

     

    Environmental Claim
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

    Environmental Incident
means:

     

    
      	
               
      

            	
              (a)

            	
              any
      release of Environmentally Sensitive Material from a Ship;
    or

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      
         

      

      
        Page
4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

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

            

    

     

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

     

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

     

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

     

    Existing Loan means the loan
the subject of the Existing Loan Agreement, the outstanding principal balance of
which as at the date of this Agreement is $25,500,000.

     

    Existing Loan Agreement means
the loan agreement dated 31 August 2007 relating to a $25,500,000 facility to
finance the ships named "Agawam", "Anawan" and "Aquidneck" and entered between
Agawam Shipping Corp., Aquidneck Shipping Corp., Anawan Shipping Corp. and Boss
Tankers Ltd. (as joint and several borrowers) and Bank of Scotland plc (as
lender).

     

    Finance Documents
means:

     

    
      	
               
      

            	
              (a)

            	
              the
      Existing Loan Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              this
      Agreement;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Guarantee;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Deeds of Covenant;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      General Assignments;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Mortgages;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Accounts Security Deed;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Master Agreement;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Master Agreement Assignment;

            

    

     

    
      	
               
      

            	
              (j)

            	
              the
      Release Documents;

            

    

     

    
      	
               
      

            	
              (k)

            	
              the
      Deed of Accession; and

            

    

     

    
      	
               
      

            	
              (l)

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

            

    

     

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

    
      
         

      

      
        Page
5

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              under
      a financial lease, a deferred purchase consideration arrangement or any
      other agreement having the commercial effect of a borrowing or raising of
      money by the debtor;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    General Assignment means, in
relation to a Ship, a general assignment of the Earnings, the Insurances and any
Requisition Compensation in the form set out in Appendix C.

     

    Guarantee means a guarantee in
the form set out in Appendix E.

     

    Guarantor means B + H Ocean
Carriers Limited, a corporation incorporated in the Liberia, whose registered
office is 80 Broad Street, Monrovia, Republic of Liberia.

     

    Insurances means, in relation
to a Ship:

     

    
      	
               
      

            	
              (a)

            	
              all
      policies and contracts of insurance, including entries of the Ship in any
      protection and indemnity or war risks association, which are effected in
      respect of the Ship, 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.

            

    

     

    Interest Period means, in
relation to an Advance, a period determined in accordance with
Clause 5.

     

    ISM Code means the
International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as
Resolutions A.741 (18) and A.788 (19), as the same may be amended or
supplemented from time to time (and the terms safety management system,
Safety Management
Certificate and Document
of Compliance have the same meanings as are given to them in the ISM
Code).

     

    ISPS Code means the
International Ship and Port Security Code as adopted by the Conference of
Contracting Governments to the Safety of Life at Sea Convention 1974 on 13
December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea
Convention 1974 and has taken effect on 1 July 2004.

     

    Lender means Bank of Scotland
plc (formerly known as The Governor and Company of the Bank of Scotland) whose
registered office is at The Mound, Edinburgh EH1 1YZ and acting for the purposes
of this Agreement through its offices at Pentland House, 8 Lochside Avenue,
Edinburgh EH12 9DJ, or its successor or assign.

     

    LIBOR means, for an Interest
Period:

    
      
         

      

      
        Page
6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (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 Moneyline Telerate Page 3750 at or about 11.00
      a.m. (London time) on the Quotation Date for that Interest Period (and,
      for the purposes of this Agreement, "Moneyline Telerate Page
      3750" means the display designated as "Page 3750" on the Telerate
      Service or such other page as may replace Page 3750 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);
  or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      no rate is quoted on Telerate Page 3750, the rate per annum at which
      deposits in Dollars are offered to the Lender by leading banks in the
      London interbank market at the Lender's request at or about 11.00 a.m.
      (London time) on the Quotation Date for that Interest Period for a period
      equal to that Interest Period and for delivery on the first Business Day
      of it.

            

    

     

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

     

    Mandatory Cost means the rate
determined in accordance with Schedule 3.

     

    Margin means 2 per cent per
annum.

     

    Market Value means, for the
purposes of determining the market value of a Ship, the average of the
valuations prepared by 2 Approved Panel Brokers determined:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    Master Agreement means the
master agreement (on the 1992 ISDA (Multicurrency - Crossborder) form) dated 31
August 2007 (as amended and acceded to pursuant to the Deed of Accession)
between the Borrowers and the Swap Bank and includes all Designated Transactions
from time to time entered into and Confirmations from time to time exchanged
thereto.

     

    Master Agreement Assignment
means, in relation to the Master Agreement, the assignment of the Master
Agreement in the form set out in Appendix F.

     

    Mortgage means, in relation to
a Ship, the first priority Bahamian ship mortgage on the Ship in the form set
out in Appendix A.

     

    Negotiation Period has the
meaning given in Clause 4.6.

     

    Payment Currency has the
meaning given in Clause 20.4.

     

    Pequod Advance means an amount
which shall not exceed $8,500,000 and the principal amount outstanding in
respect thereof from time to time.

     

    Permitted Security Interests
means:

     

    
      	
               
      

            	
              (a)

            	
              Security
      Interests created by the Finance
Documents;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      
         

      

      
        Page
7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              liens
      for salvage;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

    Pertinent Document
means:

     

    
      	
               
      

            	
              (a)

            	
              any
      Finance Document;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      policy or contract of insurance contemplated by or referred to in
      Clause 12 or any other provision of this Agreement or another Finance
      Document;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    Pertinent Jurisdiction, in
relation to a company, means:

     

    
      	
               
      

            	
              (a)

            	
              England
      and Wales;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      country in which the company's central management and control is or has
      recently been exercised;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              a
      country the courts of which have jurisdiction to make a winding up,
      administration or similar order in relation to the company or which would
      have such jurisdiction if their assistance were requested by the courts of
      a country referred to in paragraphs (b) or (c)
  above.

            

    

     

    Pertinent Matter
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      
         

      

      
        Page
8

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

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

     

    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), the day on which
quotations would ordinarily be given by leading banks in the London interbank
market for deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or other
period.

     

    Release Documents means the
deeds of release (or such other documents) as may be entered into to release the
Security Interests created by the "Finance Documents" (as defined in the
Existing Loan Agreement).

     

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

     

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

     

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

     

    Security Interest
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    Security Party means the
Guarantor and any person (except the Lender and the Swap Bank) who, as a surety
or mortgagor, as a party to any subordination or priorities arrangement, or in
any similar capacity, executes a document falling within the last paragraph of
the definition of "Finance Documents".

     

    Security Period means the
period commencing on the date of this Agreement and ending on the date on which
the Lender notifies the Borrowers and the Security Parties that:

     

    
      	
               
      

            	
              (a)

            	
              all
      amounts which have become due for payment by any Borrower or any Security
      Party 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; and

            

    

     

    
      
         

      

      
        Page
9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

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

            

    

     

    Service Documents means all
claim forms, application notices, judgments, orders or other notices of legal
process relating to this Agreement.

     

    Shareholder means, in relation
to the Ship Owning Borrowers, Boss Tankers Ltd.

     

    Ship means each
of:

     

    
      	
               
      

            	
              (a)

            	
              the
      product tanker type vessel of 39,077 dwt currently named "Agawam" and
      registered in the name of the Agawam Shipping Corp., under the Bahamas
      flag;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      product tanker type vessel of 38,993 dwt currently named "Anawan" and
      registered in the name of the Anawan Shipping Corp., under the Bahamas
      flag;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      product tanker type vessel of 40,545 dwt currently named "Aquidneck" and
      registered in the name of the Aquidneck Shipping Corp., under the Bahamas
      flag; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      product tanker type vessel of 38,973 dwt currently named "Pequod" and
      registered in the name of Isabelle Shipholdings Corp., under the Bahamas
      flag.

            

    

     

    Ship Management Agreement
means, in respect of each Ship, the BIMCO "SHIPMAN 98" Standard Ship Management
Agreement dated 1 January 2003 between the Approved Manager and the relevant
Ship Owning Borrower.

     

    Ship Owning Borrowers means
each of the Borrowers owning a Ship, being:

     

    
      	
               
      

            	
              (a)

            	
              Agawam
      Shipping Corp., being a
      corporation incorporated in the Marshall Islands whose registered offices
      are at Trust Company Complex, Ajeltake Island, Majuro, Marshall Islands
      MH96960 and whose principal office is at Par la Ville Place, 14 Par la
      Ville Road, Hamilton HM 08,
Bermuda;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Aquidneck
      Shipping Corp., being a corporation incorporated in the Marshall Islands
      whose registered offices are at Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par la
      Ville Place, 14 Par la Ville Road, Hamilton HM 08,
  Bermuda;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Anawan
      Shipping Corp., being a
      corporation incorporated in the Marshall Islands whose registered offices
      are at Trust Company Complex, Ajeltake Island, Majuro, Marshall Islands
      MH96960 and whose principal office is at Par la Ville Place, 14 Par la
      Ville Road, Hamilton HM 08, Bermuda;
and

            

    

     

    
      	
               
      

            	
              (d)

            	
              Isabelle
      Shipholding Corp., being a
      corporation incorporated in Liberia whose registered offices are at 80
      Broad Street, Monrovia, Republic of
Liberia.

            

    

     

    Sixth Special Survey
means:

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to the vessel Aquidneck, the survey to be carried out on or
      before 31 March 2010;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      relation to the vessel Anawan, the survey to be carried out on or before
      31 March 2011;

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      relation to the vessel Agawam, the survey to be carried out on or before
      30 June 2011; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      relation to the vessel Pequod, the survey to be carried out on or before
      30 March 2011.

            

    

     

    
      
         

      

      
        Page
10

        
          

        

      

      
         

      

    

    Swap Bank means Bank of
Scotland plc (formerly known as The Governor and Company of the Bank of
Scotland) whose registered office is The Mound, Edinburgh EH1 1YZ and acting for
the purposes of this Agreement and the Master Agreement through its office at
Bank of Scotland Treasury, 33 Old Broad Street, London, EC2N 1HZ.

     

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

     

    Total Loss means, in relation
to a Ship:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      arrest, capture, seizure or detention of the Ship (including any hijacking
      or theft) unless it is within 14 days redelivered to the full control of
      the Ship Owning Borrower owning the
Ship.

            

    

     

    Total Loss Date means, in
relation to a Ship:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      date of any compromise, arrangement or agreement made by or on behalf of
      the Ship Owning Borrower owning the Ship 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, on the date (or the most likely
      date) on which it appears to the Lender that the event constituting the
      total loss occurred.

            

    

     

    Transaction has the meaning
given in each Master Agreement.

     

    
      	
              1.2

            	
              Interpretation

            

    

     

    In this
Agreement, unless otherwise specified:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              references
      in Clause 1.1 to a Finance Document or any other document being in
      the form of a particular appendix include references to that form with any
      modifications to that form which the Lender approves or reasonably
      requires;

            

    

     

    
      
         

      

      
        Page
11

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              the
      expression this Clause
      shall, unless followed by reference to a specific provision, be
      deemed to refer to the whole clause (not merely the sub-clause, paragraph
      or other provision) in which the expression
  occurs;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      list of contents and headings are for ease of reference only and shall not
      be taken into account in construing this
  Agreement;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      words include,
      including and
      in particular
      shall be construed as being by way of illustration or emphasis only and
      shall not be construed as, nor shall they take effect as, limiting the
      generality of any preceding words;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      words other and
      otherwise shall
      not be construed ejusdem generis with any foregoing words where a wider
      construction is possible;

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (j)

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

            

    

     

    
      	
               
      

            	
              (k)

            	
              company or corporation includes any
      company, corporation, body corporate, partnership, joint venture and
      unincorporated association whereever and howsoever incorporated or
      established;

            

    

     

    
      	
               
      

            	
              (l)

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

            

    

     

    
      	
               
      

            	
              (m)

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

            

    

     

    
      	
               
      

            	
              (n)

            	
              document includes a
      deed; also a letter, fax or telex;

            

    

     

    
      	
               
      

            	
              (o)

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

            

    

     

    
      	
               
      

            	
              (p)

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

            

    

     

    
      	
               
      

            	
              (q)

            	
              law includes any
      legislation, any common or customary law, constitution, decree, judgment,
      order, ordinance, or any treaty or international convention, any
      regulation or resolution of the Council of the European Union, the
      European Commission, the United Nations or its Security Council or other
      legislative measure in any
jurisdiction;

            

    

     

    
      	
               
      

            	
              (r)

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

            

    

     

    
      	
               
      

            	
              (s)

            	
              legislation includes any
      statute, by-law, regulation, rule, subordinate or delegated legislation or
      order;

            

    

     

    
      
         

      

      
        Page
12

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (t)

            	
              liability includes any
      obligation or any kind of debt or liability (whether present or future,
      actual, certain or contingent, secured or unsecured, as principal or
      surety or otherwise);

            

    

     

    
      	
               
      

            	
              (u)

            	
              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:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              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;

     

    
      	
               
      

            	
              (v)

            	
              obligatory insurances
      means, in relation to a Ship, all insurances effected, or which the
      Borrower owning the Ship is obliged to effect, under Clause 12 or any
      other provision of this Agreement or another Finance
    Document;

            

    

     

    
      	
               
      

            	
              (w)

            	
              parent company has the
      meaning given to it in paragraph
(bb);

            

    

     

    
      	
               
      

            	
              (x)

            	
              person includes any
      company or corporation; any state, political sub-division of a state and
      local or municipal authority; and any international organisation; and
      person includes
      that person's successors in title and assigns or
    transferees;

            

    

     

    
      	
               
      

            	
              (y)

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

            

    

     

    
      	
               
      

            	
              (z)

            	
              protection and indemnity
      risks means the usual risks covered by a protection and indemnity
      association within the International Group of such associations, including
      pollution risks and the proportion (if any) of any sums payable to any
      other person or persons in case of collision which are not recoverable
      under the hull and machinery policies by reason of the incorporation in
      them of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or
      clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or clause 6
      of the Institute Hull Clauses (1/11/02) or the Institute Amended Running
      Down Clause (1/10/71) or any equivalent
  provision;

            

    

     

    
      	
               
      

            	
              (aa)

            	
              regulation includes any
      regulation, rule, official directive, request or guideline whether or not
      having the force of law but if not having the force of law, compliance
      with which is reasonable in the ordinary course of business of the party
      concerned, of any governmental, intergovernmental or supranational body,
      agency, department or regulatory, self-regulatory or other authority or
      organisation;

            

    

     

    
      	
               
      

            	
              (bb)

            	
              a
      company (S) is a subsidiary of another
      company (P) if:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

    
      
         

      

      
        Page
13

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iv)

            	
              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;

     

    
      	
               
      

            	
              (cc)

            	
              tax includes any present
      or future tax, duty, impost, levy, deduction, withholding or charge of any
      kind, or any amount on account of or as security for any of the foregoing,
      by whomsoever on whomsoever and wherever imposed, levied, collected,
      withheld or assessed, together with any connected penalties, additions,
      fines, surcharges or interest; and taxation shall be
      construed accordingly; and

            

    

     

    
      	
               
      

            	
              (dd)

            	
              war risks includes the
      risk of mines and all risks excluded by clause 23 of the Institute
      Time Clauses (Hulls)(1/10/83) or clause 24 of the Institute Time
      Clauses (Hulls)(1/11/1995) or clause 29 of the Institute Hull Clauses
      (1/11/02).

            

    

     

    
      	
              2

            	
              Facility

            

    

     

    Subject
to the other provisions of this Agreement, the Lender shall make available to
the Borrowers a loan facility which shall not exceed the lower of:

     

    
      	
               
      

            	
              (a)

            	
              the
      Commitment; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              75
      per cent. of the aggregate Market Values of the Ships (it being agreed
      that the Market Value in relation to a Ship shall be determined no earlier
      than 45 days prior to the relevant Drawdown Date relating to such
      Ship).

            

    

     

    
      	
              3

            	
              Drawdown

            

    

     

    
      	
              3.1

            	
              Request
      for Advance

            

    

     

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

     

    
      	
              3.2

            	
              Availability

            

    

     

    The
conditions referred to in Clause 3.1 are that:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Agawam Advance shall be used to repay the "Agawam Advance" (as defined in
      the Existing Loan Agreement);

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Aquidneck Advance shall be used to repay the "Aquidneck Advance" (as
      defined in the Existing Loan
Agreement);

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Anawan Advance shall be used to repay the "Anawan Advance" (as defined in
      the Existing Loan Agreement);

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      amount of each Advance shall not exceed $8,500,000;
  and

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      aggregate amount of the Advances shall not exceed the
      Commitment.

            

    

     

    
      	
              3.3

            	
              Drawdown
      Notice irrevocable

            

    

     

    A
Drawdown Notice must be signed by an Authorised Officer of a Borrower and once
served, a Drawdown Notice cannot be revoked without the prior consent of the
Lender.

     

    
      
         

      

      
        Page
14

        
          

        

      

      
         

      

    

    
      	
              3.4

            	
              Disbursement
      of Advance

            

    

     

    Subject
to the provisions of this Agreement, the Lender shall on each Drawdown Date make
the relevant Advance to the Borrowers; and payment to the Borrowers shall be
made to the account which the Borrowers specify in the relevant Drawdown
Notice.

     

    
      	
              3.5

            	
              Disbursement
      of Advance to third party

            

    

     

    The
payment by the Lender under Clause 3.4 shall constitute the making of the
Advance and all the Borrowers shall at that time become indebted, as principal
and direct obligors, to the Lender in an amount equal to that
Advance.

     

    
      	
              4

            	
              Interest

            

    

     

    
      	
              4.1

            	
              Payment
      of normal interest

            

    

     

    Subject
to the provisions of this Agreement, interest on each Advance in respect of each
Interest Period shall be paid by the Borrowers 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 each Advance in
respect of an Interest Period shall be the aggregate of:

     

    
      	
               
      

            	
              (a)

            	
              the
      Margin;

            

    

     

    
      	
               
      

            	
              (b)

            	
              LIBOR;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Mandatory Cost;

            

    

     

    for that
Interest Period.

     

    
      	
              4.3

            	
              Payment
      of accrued interest

            

    

     

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

     

    
      	
              4.4

            	
              Notification
      of market disruption

            

    

     

    The
Lender shall promptly notify the Borrowers if no rate is quoted on Moneyline
Telerate Page 3750 or if no rate is quoted on the ISDA Page or if for any reason
the Lender is unable to obtain Dollars in the London interbank market in order
to fund an Advance during any Interest Period, stating the circumstances which
have caused such notice to be given.

     

    
      	
              4.5

            	
              Suspension
      of drawdown.

            

    

     

    If the
Lender's notice under Clause 4.4 is served before an Advance is made, the
Lender's obligation to make such Advance shall be suspended while the
circumstances referred to in the Lender's notice continue.

     

    
      	
              4.6

            	
              Negotiation
      of alternative rate of interest

            

    

     

    If the
Lender's notice under Clause 4.4 is served after an Advance is made, the
Borrowers and the Lender shall use reasonable endeavours to agree, within the 30
days after the date on which the Lender serves its notice under Clause 4.4
(the Negotiation
Period), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund such Advance during
the Interest Period concerned.

     

    
      
         

      

      
        Page
15

        
          

        

      

      
         

      

    

     

    
      	
              4.7

            	
              Application
      of agreed alternative rate of
interest

            

    

     

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

     

    
      	
              4.8

            	
              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 Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars or in
any available currency of the relevant Advance plus the Margin and (if
applicable) the Mandatory Cost; and the procedure provided for by this
Clause 4.8 shall be repeated if the relevant circumstances are continuing
at the end of the interest period so set by the Lender.

     

    
      	
              4.9

            	
              Notice
      of prepayment

            

    

     

    If the
Borrowers do not agree with an interest rate set by the Lender under
Clause 4.8, the Borrowers may give the Lender not less than 15 Business
Days' notice of their intention to prepay at the end of the interest period set
by the Lender.

     

    
      	
              4.10

            	
              Prepayment

            

    

     

    A notice
under Clause 4.9 shall be irrevocable; and on the last Business Day of the
interest period set by the Lender, the Borrowers shall prepay (without premium
or penalty) the relevant Advance, together with accrued interest at the rate set
by the Lender under Clause 4.8 plus the Margin and (if applicable) the Mandatory
Cost.

     

    
      	
              4.11

            	
              Application
      of prepayment

            

    

     

    The
provisions of Clause 7 shall apply in relation to the
prepayment.

     

    
      	
              5

            	
              Interest
      Periods

            

    

     

    
      	
              5.1

            	
              Commencement
      of Interest Periods

            

    

     

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

     

    
      	
              5.2

            	
              Duration
      of normal Interest Periods

            

    

     

    
      	
              5.2.1

            	
              Subject
      to Clauses 5.3, 5.4 and 5.5, each Interest Period shall
      be:

            

    

     

    
      	
               
      

            	
              (a)

            	
              1,
      3 or 6 months as notified by the Borrowers to the Lender not later than
      11.00 a.m. (London time) 3 Business Days before the commencement of the
      Interest Period (although the Borrowers acknowledge that a 1 month
      Interest Period shall only be available a maximum of 3 times in any
      calendar year); or

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              5.2.2

            	
              For
      the avoidance of doubt, Interest Periods in respect of each of the
      Advances shall not be consolidated.

            

    

     

    
      
         

      

      
        Page
16

        
          

        

      

      
         

      

    

     

    
      	
              5.3

            	
              Duration
      of Interest Periods for repayment
instalments

            

    

     

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

     

    
      	
              5.4

            	
              Duration
      of Interest Periods during the relevant Availability
  Period

            

    

     

    The
Borrowers agrees that:

     

    
      	
               
      

            	
              (a)

            	
              in
      respect of the Anawan Advance and for the period commencing on the
      relevant Drawdown Date and ending on 1 March 2008, the Borrowers shall
      select Interest Periods of such duration so as to ensure the final
      Interest Period during such period ends on 1 March
  2008;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      respect of the Agawan Advance and for the period commencing on the
      relevant Drawdown Date and ending on 1 March 2008, the Borrowers shall
      select Interest Periods of such duration so as to ensure the final
      Interest Period during such period ends on 1 March
  2008;

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      respect of the Pequod Advance and for the period commencing on the
      relevant Drawdown Date and ending on 1 March 2008, the Borrowers shall
      select Interest Periods of such duration so as to ensure the final
      Interest Period during such period ends on 1 March 2008;
    and

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      respect of the Aquidneck Advance and for the period commencing on the
      relevant Drawdown Date and ending on 1 June 2008, the Borrowers shall
      select Interest Periods of such duration so as to ensure the final
      Interest Period during such period ends on 1 June
  2008.

            

    

     

    
      	
              5.5

            	
              Non-availability
      of matching deposits for Interest Period
  selected

            

    

     

    If, after
the Borrowers have selected and the Lender has agreed an Interest Period longer
than 3 months, the Lender notifies the Borrowers by 11.00 a.m. (London time) on
the third Business Day before the commencement of the Interest Period that it is
not satisfied that deposits in Dollars for a period equal to the Interest Period
will be available to it in the London interbank market when the Interest Period
commences, the Interest Period shall be of 3 months.

     

    
      	
              6

            	
              Default
      interest

            

    

     

    
      	
              6.1

            	
              Payment
      of default interest on overdue
amounts

            

    

     

    The
Borrowers shall pay interest in accordance with the following provisions of this
Clause on any amount payable by the Borrowers under any Finance Document which
the Lender does not receive on or before the relevant date, that
is:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              if
      such amount has become immediately due and payable under Clause 18.4,
      the date on which it became immediately due and
  payable.

            

    

     

    
      	
              6.2

            	
              Default
      rate of interest

            

    

     

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

     

    
      
         

      

      
        Page
17

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (a)

            	
              in
      the case of an overdue amount of principal, the higher of the rates set
      out at Clauses 6.3(a) and (b);
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the case of any other overdue amount, the rate set out at
      Clause 6.3(b).

            

    

     

    
      	
              6.3

            	
              Calculation
      of default rate of interest

            

    

     

    The rates
referred to in Clause 6.2 are:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              LIBOR;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              if
      the Lender determines that Dollar deposits for any such period are not
      being made available to it by leading banks in the London interbank market
      in the ordinary course of business, a rate from time to time determined by
      the Lender by reference to the cost of funds to it from such other sources
      as the Lender may from time to time
determine.

            

    

     

    
      	
              6.4

            	
              Notification
      of interest periods and default
rates

            

    

     

    The
Lender shall promptly notify the Borrowers of each interest rate determined by
it under Clause 6.3 and of each period selected by it for the purposes of
paragraph (b) of that Clause; but this shall not be taken to imply that the
Borrowers are liable to pay such interest only with effect from the date of the
Lender's notification.

     

    
      	
              6.5

            	
              Payment
      of accrued default interest

            

    

     

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

     

    
      	
              6.6

            	
              Compounding
      of default interest

            

    

     

    Any
interest due under this Clause which is not paid at the end of the period by
reference to which it was determined shall be compounded.

     

    
      	
              6.7

            	
              Application
      to Master Agreements

            

    

     

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

     

    
      	
              7

            	
              Repayment
      and prepayment

            

    

     

    
      	
              7.1

            	
              Amount
      of repayment instalments

            

    

     

    
      	
              7.1.1

            	
              Subject
      to Clause 7.1.2, the Borrowers shall repay each Advance as
      follows:

            

    

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to the Anawan Advance by:

            

    

     

    
      	
               
      

            	
              (i)

            	
              8
      equal consecutive three-monthly instalments of
  $600,000;

            

    

     

    
      
         

      

      
        Page
18

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

            	
              followed
      by 5 equal consecutive three-monthly instalments of $520,000 and at the
      same time as thirteenth and final instalment of $520,000, a balloon
      instalment of $1,100,000; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      relation to the Agawam Advance by:

            

    

     

    
      	
               
      

            	
              (i)

            	
              8
      equal consecutive three-monthly instalments of
  $587,500;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              followed
      by 6 equal consecutive three-monthly instalments of $450,000 and at the
      same time as fourteenth and final instalment of $450,000, a balloon
      instalment of $1,100,000; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      relation to the Aquidneck Advance
by:

            

    

     

    
      	
               
      

            	
              (i)

            	
              8
      equal consecutive three-monthly instalments of
  $525,000;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              followed
      by 8 equal consecutive three-monthly instalments of $400,000 and at the
      same time as sixteenth and final instalment of $400,000, a balloon
      instalment of $1,100,000; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      relation to the Pequod Advance by:

            

    

     

    
      	
               
      

            	
              (i)

            	
              8
      equal consecutive three-monthly instalments of
  $525,000;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              followed
      by 8 equal consecutive three-monthly instalments of $400,000 and at the
      same time as sixteenth and final instalment of $400,000, a balloon
      instalment of $1,100,000; and

            

    

     

    
      	
              7.1.2

            	
              If
      the full amount of an Advance is not drawn down under this Agreement, the
      amount of each instalment (other than the balloon instalment) repayable in
      relation to such Advance shall be reduced
  pro-rata.

            

    

     

    
      	
              7.2

            	
              Repayment
      Dates

            

    

     

    
      	
              7.2.1

            	
              In
      relation to the Anawan Advance, the first instalment in relation to such
      Advance shall be repaid on 1 March 2008 and, subject to Clause 7.2.5, the
      last instalment on 1 March 2011.

            

    

     

    
      	
              7.2.2

            	
              In
      relation to the Agawam Advance, the first instalment in relation to such
      Advance shall be repaid on 1 March 2008 and, subject to Clause 7.2.5, the
      last instalment on 1 June 2011.

            

    

     

    
      	
              7.2.3

            	
              In
      relation to the Aquidneck Advance, the first instalment in relation to
      such Advance shall be repaid on 1 June 2008 and, subject to Clause 7.2.5,
      the last instalment on 1 March
2012.

            

    

     

    
      	
              7.2.4

            	
              In
      relation to the Pequod Advance, the first instalment in relation to such
      Advance shall be repaid on 1 March 2008 and, subject to Clause 7.2.5, the
      last instalment on 1 December 2011.

            

    

     

    
      	
              7.2.5

            	
              The
      above Repayment Dates in relation to each Advance have been calculated on
      the assumption that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to the Anawan Advance, the final Repayment Date occurs prior to
      the Sixth Special Survey date relating to "Anawan". If the assumption
      proves to be incorrect, the final Repayment Date shall be the day falling
      immediately prior to the relevant Sixth Special Survey date for
      "Anawan";

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      relation to the Agawam Advance, the final Repayment Date occurs prior to
      the Sixth Special Survey date relating to "Agawam". If the relevant
      assumption proves to be incorrect, the final Repayment Date shall be the
      day falling immediately prior to the relevant Sixth Special Survey date
      for "Agawam";

            

    

     

    
      
         

      

      
        Page
19

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              in
      relation to the Pequod Advance, the final Repayment Date occurs prior to
      the Sixth Special Survey date relating to "Pequod". If the relevant
      assumption proves to be incorrect, the final Repayment Date shall be the
      day falling immediately after the relevant Sixth Special Survey date for
      "Pequod"; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      relation to the Aquidneck Advance, " Aquidneck " satisfactorily passes its
      Sixth Special Survey. If the relevant assumption proves to be incorrect,
      the final Repayment Date shall be the day falling immediately after the
      relevant Sixth Special Survey date for
  "Aquidneck".

            

    

     

    
      	
              7.3

            	
              Final
      Repayment Date

            

    

     

    On the
final Repayment Date (regardless of whether such date is the scheduled date
referred to in Clause 7.1.1 or the revised date determined pursuant to Clause
7.2.5) relating to each Advance, the Borrowers shall additionally pay to the
Lender all other sums then accrued or owing under any Finance Document in
relation to such Advance and, in relation to the Aquidneck Advance (being the
last Advance scheduled to be repaid), all other sums then accrued or owing under
any Finance Document.

     

    
      	
              7.4

            	
              Voluntary
      prepayment

            

    

     

    Subject
to the following conditions, the Borrowers may prepay the whole or any part of
an Advance on the last day of an Interest Period relating to such
Advance.

     

    
      	
              7.5

            	
              Conditions
      for voluntary prepayment

            

    

     

    The
conditions referred to in Clause 7.4 are that:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Lender has received from the Borrowers at least 5 Business Days' prior
      written notice specifying the amount to be prepaid and the date on which
      the prepayment is to be made;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              that
      the Borrowers have complied with Clause 7.11 on or prior to the date
      of prepayment.

            

    

     

    
      	
              7.6

            	
              Effect
      of notice of prepayment

            

    

     

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

     

    
      	
              7.7

            	
              Mandatory
      prepayment

            

    

     

    
      	
              7.7.1

            	
              If
      a Ship is sold or becomes a Total Loss, the Borrowers shall be obliged to
      prepay the Advance relative to such Ship and to comply with
      Clause 7.11:

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the case of a Total Loss, on the earlier of the date falling 120 days
      after the Total Loss Date and the date of receipt by the Lender of the
      proceeds of insurance relating to such Total
  Loss.

            

    

     

    
      
         

      

      
        Page
20

        
          

        

      

      
         

      

    

    

     

    
      	
              7.7.2

            	
              If,
      following the sale or Total Loss of a Ship and after the prepayment
      referred to in Clause 7.7.1, the security coverage ratio in Clause 14 is
      not satisfied, the provisions of Clause 14 shall
  apply.

            

    

     

    
      	
              7.8

            	
              Amounts
      payable on prepayment

            

    

     

    A
prepayment shall be made together with accrued interest (and any other amount
payable under Clause 19.2, Clause 20 or otherwise) in respect of the amount
prepaid and, if the prepayment is not made on the last day of an Interest Period
together with any sums payable under Clause 20.1(b) but without premium or
penalty.

     

    
      	
              7.9

            	
              Application
      of partial prepayment

            

    

     

    Each
partial prepayment of an Advance shall be applied against the repayment
instalments specified in Clause 7.1 relevant to such Advance in inverse
order of maturity.

     

    
      	
              7.10

            	
              No
      reborrowing

            

    

     

    No amount
prepaid may be reborrowed.

     

    
      	
              7.11

            	
              Unwinding
      of Designated Transactions

            

    

     

    On or
prior to any repayment or prepayment of an Advance under this Clause or any
other provision of this Agreement, the Borrowers shall wholly or partially
reverse, offset, unwind or otherwise terminate one or more of the continuing
Designated Transactions so that the notional principal amount of the continuing
Designated Transactions that remain does not and will not in the future (taking
into account the scheduled amortisation) exceed the amount of aggregate amount
of the Advances as reducing from time to time afterwards pursuant to
Clause 7.1.

     

    
      	
              8

            	
              Conditions
      precedent

            

    

     

    
      	
              8.1

            	
              Documents,
      fees and no default

            

    

     

    The
Lender's obligation to make an Advance is subject to the following conditions
precedent:

     

    
      	
               
      

            	
              (a)

            	
              that,
      on or before the date of this
Agreement:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Lender receives the documents described in Part A of Schedule 2 in
      form and substance satisfactory to it and its lawyers;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              each
      of the other conditions referred to in Part A of Schedule 2 have been
      satisfied.

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              that,
      on or before the service of the Drawdown Notice relating to the first
      Advance to be disbursed, the Lender receives the arrangement fee referred
      to in Clause 19.1;

            

    

     

    
      	
               
      

            	
              (d)

            	
              that,
      on or before the service of any Drawdown Notice, the Lender
      receives all accrued commitment fee payable pursuant to
      Clause 19.1 and has received payment of the expenses referred to in
      Clause 19.3; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              that
      both at the date of any Drawdown Notice and on the relevant Drawdown
      Date:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      
         

      

      
        Page
21

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      representations and warranties in Clause 9.1 and those of any
      Borrower or any Security Party which are set out in the other Finance
      Documents would be true and not misleading if repeated on each of those
      dates with reference to the circumstances then existing;
    and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              none
      of the circumstances contemplated by Clause 4.4 has occurred and is
      continuing; and

            

    

     

    
      	
               
      

            	
              (f)

            	
              that,
      if the ratio set out in Clause 14.1 were applied immediately
      following the making of an Advance, the Borrowers would not be obliged to
      provide additional security or prepay the Advances under that Clause;
      and

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

    
      	
              8.2

            	
              Waivers
      of conditions precedent

            

    

     

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

     

    
      	
              9

            	
              Representations
      and warranties

            

    

     

    
      	
              9.1

            	
              General

            

    

     

    Each
Borrower (in respect of itself and each of the other Borrowers) represents and
warrants to the Lender as follows.

     

    
      	
              9.2

            	
              Status

            

    

     

    
      	
              9.2.1

            	
              Each
      of Agawam Shipping Corp., Aquidneck Shipping Corp., Anawam Shipping Corp
      and Boss Tankers Ltd are  is duly incorporated and validly
      existing and in good standing under the laws of the Marshall
      Islands.

            

    

     

    
      	
              9.2.2

            	
              Isabelle
      Shipholdings Corp., is duly incorporated and validly existing and in good
      standing under the laws of Liberia.

            

    

     

    
      	
              9.3

            	
              Share
      capital and ownership

            

    

     

    
      	
              9.3.1

            	
              [Each
      of the Ship Owning Borrowers have an authorised share capital of $500
      divided into 500 registered shares of $1 each, all of which shares have
      been issued fully paid, and the legal title and beneficial ownership of
      all those shares is held, free of any Security Interest or other claim, by
      the Shareholder.] (To be
      confirmed in relation to
Isabelle]

            

    

     

    
      	
              9.3.2

            	
              The
      Shareholder has an authorised share capital of $1,000 divided into 1,000
      registered shares of $1 each, all of which shares have been issued fully
      paid, and the legal title and beneficial ownership of all those shares is
      held, free of any Security Interest or other claim, by the
      Guarantor.

            

    

     

    
      	
              9.4

            	
              Corporate
      power

            

    

     

    
      	
              9.4.1

            	
              Each
      of the Ship Owning Borrowers have the corporate capacity, and has taken
      all corporate action and obtained all consents necessary for it to
      register the Ship owned by it in its name under Bahamas
    flag.

            

    

     

    
      	
              9.4.2

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

            

    

     

    
      
         

      

      
        Page
22

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      borrow under this Agreement, to enter into Designated Transactions under
      the Master Agreement and to make all the payments contemplated by, and to
      comply with, those Finance
Documents.

            

    

     

    
      	
              9.5

            	
              Consents
      in force

            

    

     

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

     

    
      	
              9.6

            	
              Legal
      validity; effective Security
Interests

            

    

     

    The
Finance Documents to which each Borrower is a party, do now or, as the case may
be, will, upon execution and delivery (and, where applicable, registration as
provided for in the Finance Documents):

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

    
      	
              9.7

            	
              No
      third party Security Interests

            

    

     

    Without
limiting the generality of Clause 9.6, at the time of the execution and
delivery of each Finance Document:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
              9.8

            	
              No
      conflicts

            

    

     

    The
execution by each Borrower of each Finance Document to which it is a party, and
the borrowing by that Borrower of each Advance, and its compliance with each
Finance Document to which it is a party will not involve or lead to a
contravention of:

     

    
      	
               
      

            	
              (a)

            	
              any
      law or regulation; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      constitutional documents of that Borrower;
or

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              9.9

            	
              No
      withholding taxes

            

    

     

    All
payments which each Borrower is liable to make under the Finance Documents to
which it is a party may be made without deduction or withholding for or on
account of any tax payable under any law of any Pertinent
Jurisdiction.

     

    
      	
              9.10

            	
              No
      default

            

    

     

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

    
      
         

      

      
        Page
23

        
          

        

      

      
         

      

    

     

    
      	
              9.11

            	
              Information

            

    

     

    
      	
              9.11.1

            	
              All
      information which has been provided in writing by or on behalf of the
      Borrowers or any Security Party to the Lender in connection with any
      Finance Document satisfied the requirements of
      Clause 10.5.

            

    

     

    
      	
              9.11.2

            	
              All
      audited and unaudited accounts which have been so provided satisfied the
      requirements of Clause 10.7.

            

    

     

    
      	
              9.11.3

            	
              There
      has been no material adverse change in the financial position or state of
      affairs of any Borrower or Security Party from that disclosed in the
      latest of those accounts.

            

    

     

    
      	
              9.12

            	
              No
      litigation

            

    

     

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

     

    
      	
              9.13

            	
              Compliance
      with certain undertakings

            

    

     

    At the
date of this Agreement, the Borrowers are in compliance with Clauses 10.2,
10.4, 10.9 and 10.13.

     

    
      	
              9.14

            	
              Taxes
      paid

            

    

     

    
      	
              9.14.1

            	
              Each
      Borrower has paid all taxes applicable to, or imposed on or in relation to
      that Borrower or its business.

            

    

     

    
      	
              9.14.2

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

            

    

     

    
      	
              9.15

            	
              ISM
      Code and ISPS Code compliance

            

    

     

    All
requirements of the ISM Code and ISPS Code as they relate to the Ship Owning
Borrowers, the Approved Manager and each Ship have been complied
with.

     

    
      	
              9.16

            	
              No
      filing or stamp taxes

            

    

     

    Under the
law of its jurisdiction of incorporation it is not necessary that any of the
Finance Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction, or that any stamp, registration or similar tax
be paid on or in relation to any of the Finance Documents or any of the
transactions contemplated by the Finance Documents.

     

    
      	
              9.17

            	
              Own
      account

            

    

     

    In
relation to the borrowing by each Borrower, the performance and discharge of its
respective obligations and liabilities under the Finance Documents to which it
is a party and the transactions and other arrangements effected or contemplated
by the Finance Documents to which it is a party, it is acting for its own
account and that the foregoing will not involve or lead to a contravention of
any law, official requirement or other regulatory measure or procedure which has
been implemented to combat "money laundering" (as defined in Article 1 of the
Directive (91/308/EEC) of the Council of the European Communities).

     

    
      	
              9.18

            	
              Pari
      passu ranking

            

    

     

    The
payment obligations of each Borrower under the Finance Documents rank at least
pari passu with all other present and future claims of all its other unsecured
and unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.

    
      
         

      

      
        Page
24

        
          

        

      

      
         

      

    

     

    
      	
              9.19

            	
              No
      sovereign immunity

            

    

     

    Each
Borrower is subject to private commercial law with respect to its obligations
under the Finance Documents and neither the Borrowers nor any of their assets
are entitled to any right of sovereign immunity and the entry into and
performance of such Finance Documents by each of the Borrowers constitutes
private and commercial acts.

     

    
      	
              10

            	
              General
      undertakings

            

    

     

    
      	
              10.1

            	
              General

            

    

     

    Each
Borrower (in respect of itself and each of the other Borrowers) undertakes with
the Lender to comply with the following provisions of this Clause at all
times during the Security Period, except as the Lender may otherwise
permit.

     

    
      	
              10.2

            	
              Title;
      negative pledge

            

    

     

    
      	
              10.2.1

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

            

    

     

    
      	
              10.2.2

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

            

    

     

    
      	
              10.3

            	
              No
      disposal of assets

            

    

     

    No
Borrower shall transfer, lease or otherwise dispose (each a Disposal) of:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    it being
agreed that any chartering arrangements permitted pursuant to clause 13.12 shall
not constitute a Disposal.

     

    
      	
              10.4

            	
              No
      other liabilities or obligations to be
incurred

            

    

     

    
      	
              10.4.1

            	
              No
      Ship Owning Borrower shall incur any liability or obligation except
      liabilities or obligations reasonably incurred in the ordinary course of
      operating and chartering the Ship owned by
it.

            

    

     

    
      	
              10.4.2

            	
              No
      Borrower shall incur any liability or obligation except liabilities or
      obligations under the Finance
Documents.

            

    

     

    
      	
              10.5

            	
              Information
      provided to be accurate

            

    

     

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

     

    
      	
              10.6

            	
              Provision
      of financial statements and other
information

            

    

     

    Boss
Tankers Ltd. will send or cause to be sent to the Lender:

    
      
         

      

      
        Page
25

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (a)

            	
              as
      soon as possible but in no event later than 180 days after the end of each
      applicable financial year

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      audited consolidated accounts of Guarantor;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      audited accounts of Boss Tankers Ltd. set out within the said audited
      consolidated accounts of
Guarantor; 

            

    

     

    
      	
               
      

            	
              (b)

            	
              as
      soon as possible but in no event later than 45 days after the end of
      each quarter in each financial year of Boss Tankers Ltd., the unaudited
      accounts of Boss Tankers Ltd. certified as to their correctness by the
      chief financial officer of Boss Tankers
  Ltd.; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              as
      soon as possible but in no event later than one month before
      the beginning of each applicable financial year of Boss Tankers Ltd.,
      a budget in a format approved by Lender which shows all anticipated income
      and expenditures of each of the Ship Owning Borrowers during the next
      financial year in respect of the Ship owned by
  it.

            

    

     

    
      	
              10.7

            	
              Form
      of financial statements

            

    

     

    All
accounts (audited and unaudited) delivered under Clause 10.6
shall:

     

    
      	
               
      

            	
              (a)

            	
              be
      prepared in accordance with all applicable laws and generally accepted
      accounting principles;

            

    

     

    
      	
               
      

            	
              (b)

            	
              give
      a true and fair view of the state of affairs of the relevant Borrower at
      the date of those accounts and of its profit for the period to which those
      accounts relate; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              fully
      disclose or provide for all significant liabilities of the relevant
      Borrower.

            

    

     

    
      	
              10.8

            	
              Shareholder
      and creditor notices

            

    

     

    Each
Borrower shall send the Lender, at the same time as they are despatched, copies
of all communications which are despatched to that Borrower's shareholders or
creditors or any class of them.

     

    
      	
              10.9

            	
              Consents

            

    

     

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              for
      that Borrower (to the extent it is a Ship Owning Borrower) to continue to
      own and operate the Ship owned by
it;

            

    

     

    and that
Borrower shall comply with the terms of all of those consents.

     

    
      	
              10.10

            	
              Maintenance
      of Security Interests

            

    

     

    Each
Borrower shall:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      
         

      

      
        Page
26

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
              10.11

            	
              Notification
      of litigation

            

    

     

    
      	
              10.11.1

            	
              Each
      Borrower shall provide the Lender with details of any legal or
      administrative action involving that Borrower, any Security Party or the
      Approved Manager as soon as such action is instituted or it becomes
      apparent to that Borrower that it is likely to be instituted, unless it is
      clear that the legal or administrative action cannot be considered
      material in the context of any Finance
Document.

            

    

     

    
      	
              10.11.2

            	
              Each
      Ship Owning Borrower shall provide the Lender with details of any legal or
      administrative action involving the Ship owned by it , the Earnings or the
      Insurances as soon as such action is instituted or it becomes apparent to
      that Borrower that it is likely to be instituted, unless it is clear that
      the legal or administrative action cannot be considered material in the
      context of any Finance Document.

            

    

     

    
      	
              10.12

            	
              No
      amendment to Master Agreements

            

    

     

    No
Borrower shall agree to any amendment or supplement to, or waive or fail to
enforce, any Master Agreement or any of its provisions.

     

    
      	
              10.13

            	
              Principal
      place of business

            

    

     

    Each
Borrower shall maintain its place of business, and keep its corporate documents
and records, at the address stated at the commencement of this
Agreement.

     

    
      	
              10.14

            	
              Confirmation
      of no default

            

    

     

    
      	
              10.14.1

            	
              Each
      Borrower shall procure that the chief financial officer of the Guarantor
      shall, on a three-monthly basis serve on the Lender a notice which is
      signed by the chief financial officer of the Guarantor and which, as the
      case may be:

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              includes
      such other confirmations and supporting evidence that may be reasonably
      requested by the Lender.

            

    

     

    
      	
              10.14.2

            	
              Each
      Borrower shall, within 2 Business Days after service by the Lender of a
      written request, serve on the Lender a notice which is signed by 2
      directors of the Borrower and which, as the case may
  be:

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
              10.15

            	
              Notification
      of default

            

    

     

    Each
Borrower shall notify the Lender as soon as that Borrower becomes aware
of:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      
         

      

      
        Page
27

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    and shall
keep the Lender fully up-to-date with all developments.

     

    
      	
              10.16

            	
              Provision
      of further information

            

    

     

    
      	
              10.16.1

            	
              Each
      Borrower shall, as soon as practicable after receiving the request,
      provide the Lender with any additional financial or other information
      reasonably relating to any matter relevant to, or to any provision of, a
      Finance Document which may be requested by the Lender at any
      time.

            

    

     

    
      	
              10.16.2

            	
              Each
      Ship Owning Borrower shall, as soon as practicable after receiving the
      request, provide the Lender with any additional financial or other
      information relating to that Ship Owning Borrower, the Ship owned by it,
      the Earnings or the Insurances.

            

    

     

    
      	
              10.17

            	
              Due
      diligence

            

    

     

    Promptly
upon the Lender's request, each Borrower will supply, or procure the provision
of documentation or evidence as is reasonably requested by the Lender in order
for the Lender to carry out and be satisfied with the results of all necessary
"know your customer" internal requirements and to the identity of any parties to
the Finance Documents.

     

    
      	
              11

            	
              Corporate
      undertakings

            

    

     

    
      	
              11.1

            	
              General

            

    

     

    Each
Borrower (on behalf of itself and the other Borrowers) also undertakes with the
Lender to comply with the following provisions of this Clause at all times
during the Security Period except as the Lender may otherwise
permit.

     

    
      	
              11.2

            	
              Maintenance
      of status

            

    

     

    Each
Borrower shall maintain its separate corporate existence and remain in good
standing under the laws of the Marshall Islands.

     

    
      	
              11.3

            	
              Negative
      undertakings

            

    

     

    
      	
              11.3.1

            	
              No
      Ship Owning Borrower shall carry on any business other than the ownership,
      chartering and operation of the Ship owned by
  it.

            

    

     

    
      	
              11.3.2

            	
              Boss
      Tankers Ltd (as the non ship owning borrower) shall not, without the
      consent of the Lender, carry on any business other than the ownership of
      the shares in the Ship Owning
Borrowers.

            

    

     

    
      	
              11.3.3

            	
              No
      Borrower shall:

            

    

     

    
      	
               
      

            	
              (a)

            	
              alter
      its financial year;

            

    

     

    
      	
               
      

            	
              (b)

            	
              subject
      to Clause  11.3.4, pay any dividend or make any other form of
      distribution or effect any form of redemption, purchase or return of share
      capital or repay any loans to its shareholders;
  or

            

    

     

    
      	
               
      

            	
              (c)

            	
              provide
      any form of credit or financial assistance
to:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      
         

      

      
        Page
28

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

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

     

    
      	
               
      

            	
              (d)

            	
              open
      or maintain any account with any bank or financial institution except
      accounts with the Lender for the purposes of the Finance
      Documents;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

    
      	
              11.3.4

            	
              Each
      Borrower shall be entitled to pay a dividend to its shareholders
      if:

            

    

     

    
      	
               
      

            	
              (a)

            	
              at
      the relevant time, no Potential Event of Default or Event of Default is
      continuing; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              no
      Potential Event of Default or Event of Default would occur as a result of
      such payment.

            

    

     

    
      	
              12

            	
              Insurance

            

    

     

    
      	
              12.1

            	
              General

            

    

     

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

     

    
      	
              12.2

            	
              Maintenance
      of obligatory insurances

            

    

     

    Each Ship
Owning Borrower shall keep the Ship owned by it insured at the expense of that
Borrower against:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              war
      risks;

            

    

     

    
      	
               
      

            	
              (c)

            	
              protection
      and indemnity risks; and

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
              12.3

            	
              Terms
      of obligatory insurances

            

    

     

    
      	
              12.3.1

            	
              Subject
      to Clause 12.3.2, each Ship Owning Borrower shall effect such
      insurances:

            

    

     

    
      	
               

            	
              (a)

            	
              in
      Dollars;

            

    

     

    
      
         

      

      
        Page
29

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the case of fire and usual marine risks and war risks, in an amount on an
      agreed value basis of at least the market value of the Ship owned by
      it;

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              on
      approved terms; and

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
              12.3.2

            	
              The
      Ship Owning Borrowers shall ensure that in the case of fire and usual
      marine risks and war risks insurance relating to all Ships, the aggregate
      insured value is at all times at least 120% of the aggregate of the
      Advances and any Swap Exposure.

            

    

     

    
      	
              12.4

            	
              Further
      protections for the Lender

            

    

     

    In
addition to the terms set out in Clause 12.3, each Ship Owning Borrower
shall procure that the obligatory insurances shall:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              provide
      that the Lender may make proof of loss if any of the Ship Owning Borrowers
      fail to do so.

            

    

     

    
      	
              12.5

            	
              Renewal
      of obligatory insurances

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      
         

      

      
        Page
30

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              at
      least 10 days before the expiry of any obligatory insurance (or such later
      date as will be agreed by the Lender where the Borrower demonstrates
      to the Lender's satisfaction that meaningful negotiations with
      brokers or insurers continue within the 10 day period and that there is no
      likelihood the obligatory insurance in respect of an applicable
      Ship will not be obtained before the expiration of such period)
      effected by it, renew that obligatory insurance in accordance with the
      Lender's approval pursuant to paragraph (a);
and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              12.6

            	
              Copies
      of policies; letters of undertaking

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              they
      will have endorsed on each policy, immediately upon issue, a loss payable
      clause and a notice of assignment complying with the provisions of
      Clause 12.4;

            

    

     

    
      	
               
      

            	
              (b)

            	
              they
      will hold such policies, and the benefit of such insurances, to the order
      of the Lender in accordance with the loss payable clause referred to in
      paragraph (a);

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
              12.7

            	
              Copies
      of certificates of entry

            

    

     

    Each Ship
Owning Borrower shall ensure that any protection and indemnity and/or war risks
associations in which the Ship owned by it is entered provides the Lender
with:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              12.8

            	
              Deposit
      of original policies

            

    

     

    Each Ship
Owning Borrower shall use its best endeavours to ensure that all policies
relating to obligatory insurances effected by it are deposited with the approved
brokers through which the insurances are effected or renewed.

     

    
      
         

      

      
        Page
31

        
          

        

      

      
         

      

    

     

    
      	
              12.9

            	
              Payment
      of premiums

            

    

     

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

     

    
      	
              12.10

            	
              Guarantees

            

    

     

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

     

    
      	
              12.11

            	
              Compliance
      with terms of insurances

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              each
      Ship Owning Borrower shall take all necessary action and comply with all
      requirements which may from time to time be applicable to the obligatory
      insurances, and (without limiting the obligation contained in
      Clause 12.7(c) ensure that the obligatory insurances are not made
      subject to any exclusions or qualifications to which the Lender has not
      given its prior approval;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
              12.12

            	
              Alteration
      to terms of insurances

            

    

     

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

     

    
      	
              12.13

            	
              Settlement
      of claims

            

    

     

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

     

    
      	
              12.14

            	
              Provision
      of copies of communications

            

    

     

    Each Ship
Owning Borrower shall provide the Lender, at the time of each such
communication, copies of all written communications between that Borrower
and:

     

    
      	
               
      

            	
              (a)

            	
              the
      approved brokers; and

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      
         

      

      
        Page
32

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
              12.15

            	
              Provision
      of information

            

    

     

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              effecting,
      maintaining or renewing any such insurances as are referred to in
      Clause 12.16 below or dealing with or considering any matters
      relating to any such insurances;

            

    

     

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

     

    
      	
              12.16

            	
              Mortgagee's
      interest, additional perils

            

    

     

    The
Lender shall be entitled from time to time to effect, maintain and renew a
mortgagee's interest additional perils insurance in respect of any Ship and a
mortgagee's interest marine insurance for an amount up to 120 per cent. of the
aggregate of each Advance and a proportionate share of the Swap Exposure, on
such terms, through such insurers and generally in such manner as the Lender may
from time to time consider appropriate and the Borrowers shall upon demand fully
indemnify the Lender in respect of all premiums and other expenses which are
incurred in connection with or with a view to effecting, maintaining or renewing
any such insurance or dealing with, or considering, any matter arising out of
any such insurance.

     

    
      	
              13

            	
              Ship
      covenants

            

    

     

    
      	
              13.1

            	
              General

            

    

     

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

     

    
      	
              13.2

            	
              Ship's
      name and registration

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
               
      

            	
              (a)

            	
              keep
      the Ship owned by it registered in its name as a Bahamas ship at the port
      of Nassau;

            

    

     

    
      	
               
      

            	
              (b)

            	
              not
      do or allow to be done anything as a result of which such registration
      might be cancelled or imperilled;
and

            

    

     

    
      	
               
      

            	
              (c)

            	
              not
      change the name or port of registry of the Ship owned by
    it.

            

    

     

    
      
         

      

      
        Page
33

        
          

        

      

      
         

      

    

     

    
      	
              13.3

            	
              Repair
      and classification

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              consistent
      with first-class ship ownership and management
  practice;

            

    

     

    
      	
               
      

            	
              (b)

            	
              so
      as to maintain the highest class notation available for ships of a similar
      type and specification free of recommendations and conditions save to the
      extent agreed by the Lender in writing;
and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              13.4

            	
              Modification

            

    

     

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

     

    
      	
              13.5

            	
              Removal
      of parts

            

    

     

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

     

    
      	
              13.6

            	
              Surveys

            

    

     

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

     

    
      	
              13.7

            	
              Inspection

            

    

     

    Each Ship
Owning Borrower shall permit the Lender (by surveyors or other persons appointed
by it for that purpose) to board the Ship owned by it to inspect its condition
or to satisfy themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections. The Lender shall be permitted to arrange
no more than one inspection per Ship in each calendar year (unless an Event of
Default or Potential Event of Default has occurred and is
continuing).

     

    
      	
              13.8

            	
              Prevention
      of and release from arrest

            

    

     

    Each Ship
Owning Borrower shall promptly discharge:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      
        
          	
                	
                  (c)

                	
                  all
      other outgoings whatsoever in respect of the Ship owned by it, the
      Earnings or the Insurances; and,
      immediately upon receiving notice of the arrest of the Ship owned by it,
      or of its detention in exercise or purported exercise of any lien or
      claim, that Ship Owning Borrower shall procure its release by providing
      bail or otherwise as the circumstances may
  require.

                

        

      

       

    

    
      
         

      

      
        Page
34

        
          

        

      

      
         

      

    

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

     

    
      	
              13.9

            	
              Compliance
      with laws etc.

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      the event of hostilities in any part of the world (whether war is declared
      or not), not cause or permit the Ship owned by it to enter or trade to any
      zone which is declared a war zone by any government or by the Ship's
      war risk insurers, unless that Ship Owning Borrower has (at its expense)
      effected any special, additional or modified insurance
      cover as may be normally required by insurers in such
      circumstances to maintain cover.

            

    

     

    
      	
              13.10

            	
              Provision
      of information

            

    

     

    Each Ship
Owning Borrower shall promptly provide the Lender with any information which it
requests regarding:

     

    
      	
               
      

            	
              (a)

            	
              the
      Ship owned by it, its employment, position and
  engagements;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      towages and salvages;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    and, upon
the Lender's request, provide copies of any current charter relating to the Ship
owned by it, of any current charter guarantee and of the Ship's Document of
Compliance.

     

    
      	
              13.11

            	
              Notification
      of certain events

            

    

     

    Each Ship
Owning Borrower shall immediately notify the Lender by fax, confirmed
immediately afterwards by letter of:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      
        
        

      

      
        Page
35

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (e)

            	
              any
      intended dry docking of the Ship owned by
it;

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

    
      	
               
      

            	
              (h)

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

            

    

     

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

     

    
      	
              13.12

            	
              Restrictions
      on chartering, appointment of managers
etc.

            

    

     

    Without
the prior written approval of the Lender, no Ship Owning Borrower shall, in
relation to the Ship owned by it:

     

    
      	
               
      

            	
              (a)

            	
              let
      that Ship on demise charter for any
period;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              appoint
      a manager of that Ship other than the Approved Manager or agree to any
      alteration to the terms of the Approved Manager's appointment;
      or

            

    

     

    
      	
               
      

            	
              (f)

            	
              de-activate
      or lay up that Ship.

            

    

     

    
      	
              13.13

            	
              Notice
      of Mortgage

            

    

     

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

     

    
      	
              13.14

            	
              Sharing
      of Earnings

            

    

     

    No Ship
Owning Borrower shall enter into any agreement or arrangement for the sharing of
any Earnings. For the avoidance of doubt, this shall not preclude any Ship
Owning Borrower from entering into commercial pooling arrangements in relation
to a Ship in the ordinary course of its business.

     

    
      	
              14

            	
              Security
      cover

            

    

     

    
      	
              14.1

            	
              Minimum
      required security cover

            

    

     

    Clause 14.2
applies if the Lender notifies the Borrowers that:

     

    
      	
               
      

            	
              (a)

            	
              the
      aggregate of the Market Values of the Ships;
  plus

            

    

     

    
      
        
        

      

      
        Page
36

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    is below
120 per cent of the aggregate of the Advances and the Swap
Exposure.

     

    
      	
              14.2

            	
              Provision
      of additional security; prepayment

            

    

     

    If the
Lender serves a notice on the Borrowers under Clause 14.1, the Borrowers
shall, within 1 month after the date on which the Lender's notice is served,
either:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              pay
      to the Lender such amount so as to ensure once such sum has been applied
      in accordance  with Clause 14.7, such shortfall will have been
      eliminated.

            

    

     

    
      	
              14.3

            	
              Value
      of additional vessel security

            

    

     

    The net
realisable value of any additional security which is provided under
Clause 14.2 and which consists of a Security Interest over a vessel shall
be determined in accordance with its Market Value.

     

    
      	
              14.4

            	
              Valuations
      binding

            

    

     

    Any
valuation under Clause 2 (b), 14.2 or 14.3 shall be binding and conclusive
as regards the Borrowers, as shall be any valuation which the Lender makes of
any additional security which does not consist of or include a Security
Interest.

     

    
      	
              14.5

            	
              Provision
      of information

            

    

     

    The
Borrowers shall promptly provide the Lender and any shipbroker or expert with
any information which the Lender or the shipbroker or expert may request for the
purposes of determining the Market Values.  If the Borrowers fail to
provide the information by the date specified in the request, the valuation may
be made on any basis and assumptions which the shipbroker or the Lender (or the
expert appointed by it) considers prudent.

     

    
      	
              14.6

            	
              Payment
      of valuation expenses

            

    

     

    Without
prejudice to the generality of the Borrowers' obligations under
Clauses 19.3, 19.4 and 20.3, the Borrowers shall, on demand, pay the Lender
the amount of the fees and expenses of any shipbroker or expert instructed by
the Lender under this Clause and all legal and other expenses incurred by the
Lender in connection with any matter arising out of this Clause. Provided no
Event of Default or Potential Event of Default has occurred and is continuing,
the Borrower shall only be required to pay such fees and expenses for one
valuation per Ship in each calendar year.

     

    
      	
              14.7

            	
              Application
      of prepayment

            

    

     

    Clause 7
shall apply in relation to any prepayment pursuant to Clause 14.2(b) and
each partial prepayment shall be applied against the remaining repayment
instalments of an outstanding Advance in inverse order of maturity and, where
two or more Advances remain outstanding, on a pro rata basis.

     

    
      
        
        

      

      
        Page
37

        
          

        

      

      
        
        

      

    

     

    
      	
              15

            	
              Payments
      and calculations

            

    

     

    
      	
              15.1

            	
              Currency
      and method of payments

            

    

     

    All
payments to be made by any Borrower to the Lender under a Finance Document shall
be made to the Lender:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      such account as the Lender may from time to time notify to the
      Borrowers.

            

    

     

    
      	
              15.2

            	
              Payment
      on non-Business Day

            

    

     

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

    
      	
              15.3

            	
              Basis
      for calculation of periodic
payments

            

    

     

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

     

    
      	
              15.4

            	
              Lender
      accounts

            

    

     

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

     

    
      	
              15.5

            	
              Accounts
      prima facie evidence

            

    

     

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

     

    
      	
              15.6

            	
              Source
      of funds

            

    

     

    
      	
              15.6.1

            	
              The
      Lender may at any time require evidence satisfactory to the Lender that
      any payment under this Agreement is legally compliant and until such
      evidence has been provided to the Lender, the Lender shall not be obliged
      to accept any such payment but shall be entitled to place such payment
      into a suspense account and such payment shall not be an effective
      discharge of the liabilities of the Borrowers under this
      Agreement.

            

    

     

    
      	
              15.6.2

            	
              For
      the purposes of this Clause legally compliant means that the
      payment of any funds under this Agreement and their source (whether direct
      or indirect) and their receipt and handling is or will be in the opinion
      of the Lender in all respects in accordance with any European Community
      legislation (including any regulation or directive), the common law,
      United Kingdom legislation (including subordinate legislation and any
      order or regulations made under such legislation), any law or order of any
      court or administrative tribunal which is in force in the United Kingdom,
      all laws of any relevant jurisdiction and all regulatory requirements, and
      the receipt of such funds by the Lender will not or is not reasonably
      likely in the opinion of the Lender to impose on the Lender any obligation
      to make a report to any authority or to repay such
  funds.

            

    

     

    
      
        
        

      

      
        Page
38

        
          

        

      

      
        
        

      

    

     

    
      	
              16

            	
              Application
      of receipts

            

    

     

    
      	
              16.1

            	
              Normal
      order of application

            

    

     

    Except as
any Finance Document may otherwise provide, any sums which are received or
recovered by the Lender under or by virtue of any Finance Document shall be
applied after service of notice on the Borrowers under Clause 18.2 (a) or
(b) shall be applied:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              first,
      in or towards satisfaction pro rata of all amounts then due and payable to
      the Lender and/or the Swap Bank under the Finance Documents other than
      those amounts referred to at paragraphs (ii) and
    (iii);

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              SECONDLY:
      in retention of an amount equal to any amount not then due and payable
      under any Finance Document but which the Lender, by notice to the Borrower
      and the Security Parties, states in its opinion (acting reasonably and
      with due regard to the facts existing at such time) will or may become due
      and payable in the future and, upon those amounts becoming due and
      payable, in or towards satisfaction of them in accordance with the
      provisions of paragraph (a);
and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              16.2

            	
              Variation
      of order of application

            

    

     

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

     

    
      	
              16.3

            	
              Notice
      of variation of order of
application

            

    

     

    The
Lender may give notices under Clause 16.2 from time to time; and such a
notice may be stated to apply not only to sums which may be received or
recovered in the future, but also to any sum which has been received or
recovered on or after the third Business Day before the date on which the notice
is served.

     

    
      
        
        

      

      
        Page
39

        
          

        

      

      
        
        

      

    

     

    
      	
              16.4

            	
              Appropriation
      rights overridden

            

    

     

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

     

    
      	
              17

            	
              Application
      of Earnings

            

    

     

    
      	
              17.1

            	
              Payment
      of Earnings

            

    

     

    Each Ship
Owning Borrower undertakes with the Lender to ensure that, throughout the
Security Period (and subject only to the provisions of the General
Assignment):

     

    
      	
               
      

            	
              (a)

            	
              all
      the Earnings of the Ship owned by it are paid into the Earnings Account;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      payments by the Swap Bank to a Borrower under each Designated Transaction
      are paid into the Earnings Account held in the name of that
      Borrower.

            

    

     

    
      	
              17.2

            	
              Location
      of accounts

            

    

     

    Each Ship
Owning Borrower shall promptly:

     

    
      	
               
      

            	
              (a)

            	
              comply
      with any requirement of the Lender as to the location or re-location of
      the Earnings Accounts; and

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
              17.3

            	
              Debits
      for expenses etc.

            

    

     

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

     

    
      	
              18

            	
              Events
      of Default

            

    

     

    
      	
              18.1

            	
              Events
      of Default

            

    

     

    An Event
of Default occurs if:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3, 12, 14.1 or
      clause 12 of the Guarantee; or

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      
        
        

      

      
        Page
40

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              any
      of the following occurs in relation to any Financial Indebtedness of any
      Borrower or the Guarantor:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Financial Indebtedness of any Borrower or the Guarantor is not paid when
      due or, if so payable, on demand;
or

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
               
      

            	
              (iii)

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

            

    

     

    
      	
               
      

            	
              (iv)

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

            

    

     

    
      	
               
      

            	
              (v)

            	
              any
      Security Interest securing any Financial Indebtedness of any Borrower or
      the Guarantor becomes enforceable;
or

            

    

     

    
      	
               
      

            	
              (g)

            	
              any
      of the following occurs in relation to any Borrower or the
      Guarantor:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Borrower or the Guarantor suspends payment of its debts or is unable or
      admits its inability to pay its debts as they fall due;
  or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      Borrower or the Guarantor begins negotiations with any creditor with a
      view to the readjustment or rescheduling of any of its Financial
      Indebtedness; or

            

    

     

    
      	
               
      

            	
              (iii)

            	
              any
      Borrower or the Guarantor proposes or enters into any composition or other
      arrangement for the benefit of its creditors generally or any class of
      creditors; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      assets of any Borrower or the Guarantor are subject to any form of
      execution, attachment, arrest, sequestration, distress in respect of a sum
      of, or sums aggregating, $250,000 or more or the equivalent in another
      currency (other than a ship arrest or attachment arising in the usual
      course of business and which is, in the reasonable opinion of the Lender,
      adequately secured); or

            

    

     

    
      	
               
      

            	
              (h)

            	
              any
      person takes any action or any legal procedure is commenced or other steps
      are taken (including the making of an application, the presentation of a
      petition or the filing or service of a notice) with a view
    to:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Borrower or the Guarantor being adjudicated or found insolvent;
      or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      winding-up or dissolution of any Borrower or the Guarantor other than in
      connection with a solvent reconstruction, the terms of which have been
      previously approved in writing by the Lender
;or

            

    

     

    
      
        
        

      

      
        Page
41

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (iii)

            	
              any
      Borrower or the Guarantor obtaining a moratorium or other protection from
      its creditors; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      appointment of a trustee, receiver, administrative receiver, administrator
      or similar officer in respect of any Borrower or the Guarantor or any of
      its assets; or

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      adjudication, order or appointment is made under or in relation to any of
      the proceedings referred to in paragraph (h);
or

            

    

     

    
      	
               
      

            	
              (j)

            	
              any
      event occurs or proceeding is taken with respect to any Borrower or the
      Guarantor in any jurisdiction to which it is subject which has an effect
      equivalent or similar to any of the events mentioned in paragraph (g) or
      (i); or

            

    

     

    
      	
               
      

            	
              (k)

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

            

    

     

    
      	
               
      

            	
              (l)

            	
              it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

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

            

    

     

    
      	
               
      

            	
              (m)

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

            

    

     

    
      	
               
      

            	
              (n)

            	
              it
      appears to the Lender that, without its prior consent, a change has
      occurred or probably has occurred after the date of this Agreement in the
      ultimate beneficial ownership of any of the shares in the Borrowers or the
      Guarantor or in the ultimate control of the voting rights attaching to any
      of those shares; or

            

    

     

    
      	
               
      

            	
              (o)

            	
              any
      provision which the Lender considers material of a Finance Document proves
      to have been or becomes invalid or unenforceable, or a Security Interest
      created by a Finance Document proves to have been or becomes invalid or
      unenforceable or such a Security Interest proves to have ranked after, or
      loses its priority to, another Security Interest or any other third party
      claim or interest; or

            

    

     

    
      	
               
      

            	
              (p)

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

            

    

     

    
      	
               
      

            	
              (q)

            	
              the
      Ship is arrested or otherwise detained and is not released from such
      detention within a period of 14 days;
or

            

    

     

    
      	
               
      

            	
              (r)

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

            

    

     

    
      	
               
      

            	
              (s)

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

            

    

     

    
      	
               
      

            	
              (t)

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

            

    

     

    
      
        
        

      

      
        Page
42

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      accident or other event (including an Environmental Incident) involving
      any Ship or another vessel owned, chartered or operated by any Borrower or
      the Guarantor;

            

    

     

    in the
light of which the Lender considers that there is a significant risk that the
Security Parties are, or will later become, unable to discharge their
liabilities under the Finance Documents as they fall due.

     

    
      	
              18.2

            	
              Actions
      following an Event of Default

            

    

     

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              take
      any other action which, as a result of the Event of Default or any notice
      served under paragraph (a) or (b), the Lender and/or Swap Bank is entitled
      to take under any Finance Document or any applicable
  law.

            

    

     

    
      	
              18.3

            	
              Termination
      of Commitment

            

    

     

    On the
service of a notice under Clause 18.2(a) the Commitment, and all other
obligations of the Lender to the Borrowers under this Agreement, shall
terminate.

     

    
      	
              18.4

            	
              Acceleration
      of the Advances

            

    

     

    On the
service of a notice under Clause 18.2(b), the Advances, all accrued
interest and all other amounts accrued or owing from the Borrowers or any
Security Party under this Agreement and every other Finance Document shall
become immediately due and payable or, as the case may be, payable on
demand.

     

    
      	
              18.5

            	
              Multiple
      notices; action without notice

            

    

     

    The
Lender may serve notices under Clauses 18.2(a) and (b) simultaneously or on
different dates and it may take any action referred to in Clause 18.2 if no
such notice is served or simultaneously with or at any time after the service of
both or either of such notices.

     

    
      	
              18.6

            	
              Exclusion
      of Lender/Swap Bank liability

            

    

     

    Neither
the Lender nor the Swap Bank nor any receiver or manager appointed by the
Lender, shall have any liability to a Borrower or a Security Party:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      
        
        

      

      
        Page
43

        
          

        

      

      
        
        

      

    

     

    
      	
              18.7

            	
              [Intentionally
      left blank]

            

    

     

    
      	
              18.8

            	
              Interpretation

            

    

     

    In
Clause 18.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of default
in a facility agreement or a termination event in a finance lease.

     

    
      	
              19

            	
              Fees
      and expenses

            

    

     

    
      	
              19.1

            	
              Arrangement
      and commitment fees

            

    

     

    The
Lender acknowledges that it has already received an arrangement fee of $127,500
from the Borrowers. The Borrowers shall pay to the Lender on or before the date
of this Agreement a further arrangement fee of $42,500.

     

    
      	
              19.2

            	
              Prepayment
      fee

            

    

     

    If all
the Advances are fully repaid on or before 7 September 2009, the Borrowers shall
pay to the Lender a prepayment fee equal to 0.2 per cent. of  the
aggregate balance of the Advances immediately prior to such
prepayment.

     

    
      	
              19.3

            	
              Costs
      of negotiation, preparation etc.

            

    

     

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

     

    
      	
              19.4

            	
              Costs
      of variations, amendments, enforcement
etc.

            

    

     

    The
Borrowers shall pay to the Lender, on the Lender's demand, the amount of all
expenses incurred by the Lender in connection with:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      consent or waiver by the Lender or the Swap Bank concerned under or in
      connection with a Finance Document, or any request for such a consent or
      waiver;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      valuation of any security provided or offered under Clause 14 or any
      other matter relating to such security;
or

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

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

     

    
      	
              19.5

            	
              Certification
      of amounts

            

    

     

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

     

    
      
        
        

      

      
        Page
44

        
          

        

      

      
        
        

      

    

     

    
      	
              20

            	
              Indemnities

            

    

     

    
      	
              20.1

            	
              Indemnities
      regarding borrowing and repayment of the
  Advances

            

    

     

    The
Borrowers shall fully indemnify the Lender on its demand in respect of all
claims, expenses, liabilities and losses which are made or brought against or
incurred by the Lender, or which the Lender reasonably and with due diligence
estimates that it will incur, as a result of or in connection with:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      failure (for whatever reason) by the Borrowers to make payment of any
      amount due under a Finance Document on the due date or, if so payable, on
      demand (after giving credit for any default interest paid by the Borrowers
      on the amount concerned under
Clause 6);

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
              20.2

            	
              Breakage
      costs

            

    

     

    Without
limiting its generality, Clause 20.1 covers any claim, expense, liability
or loss, including a loss of a prospective profit, incurred by the
Lender:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      terminating, or otherwise in connection with, any interest and/or currency
      swap or any other transaction entered into (whether with another legal
      entity or with another office or department of the Lender) to hedge any
      exposure arising under this Agreement or a number of transactions of which
      this Agreement is one.

            

    

     

    
      	
              20.3

            	
              Miscellaneous
      indemnities

            

    

     

    The
Borrowers shall fully indemnify the Lender on its demand in respect of all
claims, expenses, liabilities and losses which may be made or brought against or
incurred by the Lender, in any country, as a result of or in connection
with:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      other Pertinent Matter;

            

    

     

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

     

    Without
prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, ISPS Code or any Environmental
Law.

     

    
      
        
        

      

      
        Page
45

        
          

        

      

      
        
        

      

    

     

    
      	
              20.4

            	
              Currency
      indemnity

            

    

     

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              enforcing
      any such order or judgment;

            

    

     

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

     

    In this
Clause 20.4, the available
rate of exchange means the rate at which the Lender is able at the
opening of business (London time) on the Business Day after it receives the sum
concerned to purchase the Contractual Currency with the Payment
Currency.

     

    This
Clause 20.4 creates a separate liability of the Borrowers which is distinct
from their other liabilities under the Finance Documents and which shall not be
merged in any judgment or order relating to those other
liabilities.

     

    
      	
              20.5

            	
              Application
      to Master Agreements

            

    

     

    For the
avoidance of doubt, Clause 20.4 does not apply in respect of sums due from
the Borrowers to the Swap Bank under or in connection with a Master Agreement as
to which sums the provisions of section 8 (Contractual Currency) of that Master
Agreement shall apply.

     

    
      	
              20.6

            	
              Certification
      of amounts

            

    

     

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

     

    
      	
              21

            	
              No
      set-off or Tax Deduction; value added
tax

            

    

     

    
      	
              21.1

            	
              Definitions

            

    

     

    In this
Clause:

     

    Tax Credit means a credit
against, relief from, or remission or repayment of any tax.

     

    Tax Deduction means a
deduction or withholding for or on account of tax from a payment under a Finance
Document.

     

    Tax Payment means either an
increase in a payment made by a Borrower to the Lender under Clause 21.3 or
a payment under Clause 21.4.

     

    VAT means value added tax as
provided for in the Value Added Tax Act 1994 and legislation (or purported
legislation and whether delegated or otherwise) supplemental to that Act or in
any primary or secondary legislation promulgated by the European Community or
any official body or agency of the European Community, and any tax similar or
equivalent to value added tax imposed by any country other than the United
Kingdom and any similar or turnover tax replacing or introduced in addition to
any of the foregoing.

     

    
      
        
        

      

      
        Page
46

        
          

        

      

      
        
        

      

    

     

    
      	
              21.2

            	
              No
      set-off and counterclaim

            

    

     

    All
payments by the Borrowers under this Agreement shall be made without set-off or
counterclaim.

     

    
      	
              21.3

            	
              Tax
      gross-up

            

    

     

    
      	
              21.3.1

            	
              Each
      Borrower shall make all payments to be made by it without any Tax
      Deduction, unless a Tax Deduction is required by
  law.

            

    

     

    
      	
              21.3.2

            	
              If
      a Tax Deduction is required by law to be made by a Borrower, the amount of
      the payment in respect of which the Tax Deduction is required to be made
      shall be increased to the amount which (after the Tax Deduction) will
      leave an amount equal to the payment which would have been due if no Tax
      Deduction had been required.

            

    

     

    
      	
              21.3.3

            	
              If
      a Borrower is required to make a Tax Deduction, that Borrower shall make
      the Tax Deduction, and any payment required in connection with the Tax
      Deduction within the time allowed and in the minimum amount required by
      law.

            

    

     

    
      	
              21.3.4

            	
              Within
      30 days of making a Tax Deduction or a payment required in connection with
      a Tax Deduction, the Borrower making the Tax Deduction or payment shall
      deliver to the Lender evidence reasonably satisfactory to the Lender that
      the Tax Deduction or payment has been
made.

            

    

     

    
      	
              21.4

            	
              Tax
      indemnity

            

    

     

    
      	
              21.4.1

            	
              If
      the Lender is or will be subject to any liability or required to make any
      payment for or on account of tax in relation to any sum received or
      receivable (or any sum deemed for tax purposes to be received or
      receivable) under any Finance Document, the Borrowers shall (within 3
      Business Days of demand) pay to the Lender the amount determined by the
      Lender in its absolute discretion to be equal to the loss, liability or
      cost which it will or has (directly or indirectly) suffered for or on
      account of tax by the Lender as a result of that liability or
      payment.

            

    

     

    
      	
              21.4.2

            	
              Sub-clause 21.4.1
      shall not apply:

            

    

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to any tax assessed on the
Lender:

            

    

     

    
      	
               
      

            	
              (i)

            	
              under
      the law of the jurisdiction in which the Lender is incorporated or, if
      different, the jurisdiction (or jurisdictions) in which it is treated as
      resident for tax purposes; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              under
      the law of the jurisdiction in which the Lender's lending office is
      located, in respect of amounts received or receivable in that
      jurisdiction;

            

    

     

    if that
tax is imposed on or calculated by reference to the net income received or
receivable (but not any sum deemed to be received or receivable) by the Lender;
or

     

    
      	
               
      

            	
              (b)

            	
              to
      the extent that the liability or requirement is compensated for by an
      increased payment under
Clause 21.3.

            

    

     

    
      	
              21.5

            	
              Tax
      Credit

            

    

     

    If a
Borrower makes a Tax Payment and the Lender determines in its absolute
discretion that it has obtained, utilised and retained a Tax Credit which is
attributable to either:

     

    
      	
               
      

            	
              (a)

            	
              an
      increased payment of which that Tax Payment forms part;
  or

            

    

     

    
      
        
        

      

      
        Page
47

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              that
      Tax Payment;

            

    

     

    the
Lender shall pay to that Borrower the amount determined by the Lender in its
absolute discretion to be the amount which will leave the Lender (after the
payment) in the same after-tax position as it would have been in had the Tax
Payment not been required to be made by that Borrower. 

     

    
      	
              21.6

            	
              Stamp
      taxes

            

    

     

    The
Borrowers shall, within 3 Business Days of demand, indemnify the Lender against
any cost, loss or liability which the Lender incurs in relation to any stamp
duty, registration tax or other similar tax which is payable in respect of any
of the Finance Documents.

     

    
      	
              21.7

            	
              Value
      added tax

            

    

     

    
      	
              21.7.1

            	
              All
      consideration which is expressed to be payable under any of the Finance
      Documents by the Borrowers to the Lender is exclusive of any
      VAT.  If VAT is chargeable on any supply made by the Lender in
      connection with any of the Finance Documents, the Borrowers shall pay to
      the Lender (in addition to and at the same time as paying the
      consideration for the supply) an amount equal to the amount of the
      VAT.

            

    

     

    
      	
              21.7.2

            	
              Where
      a Borrower is required by any of the Finance Documents to reimburse the
      Lender in respect of any cost or expense, that Borrower shall at the same
      time indemnify the Lender against any VAT incurred by the Lender in
      respect of the cost or expense to the extent that the Lender reasonably
      determines that it is not entitled to any credit or repayment in respect
      of that VAT.

            

    

     

    
      	
              22

            	
              Illegality,
      etc.

            

    

     

    
      	
              22.1

            	
              Illegality

            

    

     

    This
Clause applies if the Lender notifies the Borrowers that it has become, or
will with effect from a specified date, become:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              contrary
      to, or inconsistent with, any
regulation,

            

    

     

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

     

    
      	
              22.2

            	
              Notification
      and effect of illegality

            

    

     

    On the
Lender notifying the Borrowers under Clause 22.1, the Commitment shall
terminate; and thereupon or, if later, on the date specified in the Lender's
notice under Clause 22.1 as the date on which the notified event would
become effective the Borrowers shall prepay the Advances in full in accordance
with Clause 7.

     

    
      	
              22.3

            	
              Mitigation

            

    

     

    If
circumstances arise which would result in a notification under Clause 22.1
then, without in any way limiting the rights of the Lender under
Clause 22.3, the Lender shall use reasonable endeavours to transfer its
obligations, liabilities and rights under this Agreement and the Finance
Documents to another office or financial institution not affected by the
circumstances but the Lender shall not be under any obligation to take any such
action if, in its opinion, to do would or might:

     

    
      
        
        

      

      
        Page
48

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
              23

            	
              Increased
      costs

            

    

     

    
      	
              23.1

            	
              Definitions

            

    

     

    In this
Clause the following definitions apply.

     

    Change means, in relation to
the Lender (or any parent company of the Lender), the introduction,
implementation, repeal, withdrawal or change in, or in the interpretation or
application of:

     

    
      	
               
      

            	
              (a)

            	
              any
      law, regulation, practice or concession;
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      directive, requirement, request or guidance (whether or not having the
      force of law but if not having the force of law, one which applies
      generally to a class or category of financial institutions of which the
      Lender (or that company) forms part and compliance with which is in
      accordance with the general practice of those financial institutions) of
      the European Community, any central bank including the European Central
      Bank, the Financial Services Authority, or any other fiscal, monetary,
      regulatory or other authority.

            

    

     

    Increased Cost means any cost
to, or reduction in the amount payable to, or reduction in the return on capital
or regulatory capital achieved by, the Lender (or any parent company of the
Lender) to the extent that it arises, directly or indirectly, as a result of the
Change and is attributable to the loan facility made available to the Borrowers
under this Agreement or any Advance or the funding of any Advance
including:

     

    
      	
               
      

            	
              (a)

            	
              any
      Tax Liability (other than Tax on Overall Net Income) incurred by the
      Lender;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      changes in the basis or timing of taxation of the Lender in relation to
      the loan facility made available to the Borrowers under this Agreement or
      any Advance or to the funding of any
Advance;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      cost to the Lender (or any parent company of the Lender) of complying
      with, or the reduction in the amount payable to or reduction in the return
      on capital or regulatory capital achieved by the Lender (or any parent
      company of the Lender) as a result of complying with, any capital adequacy
      or similar requirements howsoever arising, including as a result of an
      increase in the amount of capital to be allocated to the loan facility
      made available to the Borrowers under this Agreement or of a change to the
      weighting of the commitment under it or any
  Advance;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      cost to the Lender of complying with any reserve, cash ratio, special
      deposit or liquidity requirements (or any other similar requirements);
      and

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      amount of any fees payable by the Lender to any supervisory or regulatory
      authority.

            

    

     

    Tax Liability means, in
respect of any person:

     

    
      	
               
      

            	
              (a)

            	
              any
      liability or any increase in the liability of that person to make any
      payment of or in respect of tax;

            

    

     

    
      
        
        

      

      
        Page
49

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              the
      loss of any relief, allowance, deduction or credit in respect of tax which
      would otherwise have been available to that
  person;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      setting off against income, profits or gains or against any tax liability
      of any relief, allowance, deduction or credit in respect of tax which
      would otherwise have been available to that person;
  and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      loss or setting off against any tax liability of a right to repayment of
      tax which would otherwise have been available to that
    person.

            

    

     

    For the
purposes of this definition of Tax Liability, any question of whether or not any
relief, allowance, deduction, credit or right to repayment of tax has been lost
or set off, and if so, the date on which that loss or set-off took place, shall
be conclusively determined by the relevant person.

     

    Tax on Overall Net Income
means, in relation to the Lender, tax (other than tax deducted or
withheld from any payment) imposed on the net profits of the Lender by the
jurisdiction in which its lending office or its head office is
situated.

     

    
      	
              23.2

            	
              Increased
      Costs

            

    

     

    
      	
              23.2.1

            	
              If,
      after the date of this Agreement, a Change occurs which causes an
      Increased Cost to the Lender (or any parent company of the Lender) then
      the Borrowers shall pay (as additional interest) to the Lender within
      5 Business Days of demand all amounts which the Lender (or any parent
      company of the Lender) certifies to be necessary to compensate the Lender
      for the Increased Cost.

            

    

     

    
      	
              23.2.2

            	
              Any
      demand made under this Clause shall set out in reasonable detail so
      far as is practicable the basis of computation of the Increased
      Cost.

            

    

     

    
      	
              23.2.3

            	
              The
      Borrowers shall not be obliged to make a payment in respect of an
      Increased Cost under this Clause if and to the extent that the
      Increased Cost has been compensated for by the payment of the Mandatory
      Cost or the operation of
Clause 21.3.

            

    

     

    
      	
              23.3

            	
              Optional
      prepayment

            

    

     

    If the
Borrowers are required to pay any amount to the Lender under this Clause, then,
without prejudice to that obligation and so long as the circumstances giving
rise to the relevant Increased Cost are continuing and subject to the Borrowers
giving the Lender not less than 14 days' prior notice (which shall be
irrevocable), the Borrowers may prepay all, but not part, of the Advances at the
end of an Interest Period together with accrued interest on the amount
prepaid.  Any such prepayment shall be subject to
Clause 7.

     

    
      	
              24

            	
              Set-off

            

    

     

    
      	
              24.1

            	
              Application
      of credit balances

            

    

     

    The
Lender may without prior notice:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              for
      that purpose:

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      
        
        

      

      
        Page
50

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (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 which the Lender considers
appropriate.

            

    

     

    
      	
              24.2

            	
              Existing
      rights unaffected

            

    

     

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

     

    
      	
              24.3

            	
              No
      Security Interest

            

    

     

    This
Clause gives the Lender a contractual right of set-off only, and does not
create any equitable charge or other Security Interest over any credit balance
of the Borrower.

     

    
      	
              25

            	
              Transfers
      and changes in lending office

            

    

     

    
      	
              25.1

            	
              Transfer
      by Borrowers

            

    

     

    No
Borrower may, without the consent of the Lender transfer any of its rights or
obligations under any Finance Document.

     

    
      	
              25.2

            	
              Assignment
      by Lender

            

    

     

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

     

    
      	
              25.3

            	
              Rights
      of assignee

            

    

     

    In
respect of any breach of a warranty, undertaking, condition or other provision
of a Finance Document, or any misrepresentation made in or in connection with a
Finance Document, a direct or indirect assignee of any of the Lender's rights or
interests under or by virtue of the Finance Documents shall be entitled to
recover damages by reference to the loss incurred by that assignee as a result
of the breach or misrepresentation irrespective of whether the Lender would have
incurred a loss of that kind or amount.

     

    
      	
              25.4

            	
              Sub-participation;
      subrogation assignment

            

    

     

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

     

    
      	
              25.5

            	
              Disclosure
      of information

            

    

     

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

     

    
      	
              25.6

            	
              Change
      of lending office

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              the
      date on which the Borrowers receive the notice;
  and

            

    

     

    
      
        
        

      

      
        Page
51

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              the
      date, if any, specified in the notice as the date on which the change will
      come into effect.

            

    

     

     

    
      	
              26

            	
              Variations
      and waivers

            

    

     

    
      	
              26.1

            	
              Variations,
      waivers etc. by Lender

            

    

     

    A
document shall be effective to vary, waive, suspend or limit any provision of a
Finance Document, or the Lender's rights or remedies under such a provision or
the general law, only if the document is signed, or specifically agreed to by
fax or telex, by the Borrowers and the Lender and, if the document relates to a
Finance Document to which a Security Party is party, by that Security
Party.

     

    
      	
              26.2

            	
              Exclusion
      of other or implied variations

            

    

     

    Except
for a document which satisfies the requirements of Clause 26.1, no
document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) being taken to
have varied, waived, suspended or limited, or being precluded (permanently or
temporarily) from enforcing, relying on or exercising:

     

    
      	
               
      

            	
              (a)

            	
              a
      provision of this Agreement or another Finance Document;
  or

            

    

     

    
      	
               
      

            	
              (b)

            	
              an
      Event of Default; or

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      breach by a Borrower or a Security Party of an obligation under a Finance
      Document or the general law; or

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      right or remedy conferred by any Finance Document or by the general
      law;

            

    

     

    and there
shall not be implied into any Finance Document any term or condition requiring
any such provision to be enforced, or such right or remedy to be exercised,
within a certain or reasonable time.

     

     

    
      	
              27

            	
              Notices

            

    

     

    
      	
              27.1

            	
              Method
      and delivery

            

    

     

    Any
notice, consent, approval, demand, authorisation, instruction, waiver or
certificate or other communication (a notice) to be given under this
Agreement or any other Finance Document to which a Borrower is a party shall
be:

     

    
      	
               
      

            	
              (a)

            	
              in
      writing in English;

            

    

     

    
      	
               
      

            	
              (b)

            	
              signed
      by or on behalf of a person duly authorised to do so by the party giving
      the notice; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              delivered
      by hand, or sent by prepaid first class post (or international courier in
      the case of an address outside the United Kingdom) to the address set out
      in Clause 27.2, or sent by fax to the number set out in
      Clause 27.2;

            

    

     

    and no
notice by a Borrower may be withdrawn or revoked without the written consent of
the Lender.

     

    
      	
              27.2

            	
              Addresses

            

    

     

    The
addresses and numbers of the parties for the purposes of Clause 27.1
are:

     

    
      
        
        

      

      
        Page
52

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Borrowers

            

    

     

    Par la
Ville Place

    14 Par la
Ville Road

    Hamilton
HM 08, Bermuda

     

    Attention:       
  Mrs. Deborah Paterson

    Fax
number:      441-295-6796

    

    

    
      	
               
      

            	
              (b)

            	
              the
      Lender

            

    

     

    Bank of
Scotland plc

     

    Pentland
House

    8
Lochside Avenue

    Edinburgh

    EH12
9DJ

     

    Attention:        
 Marine Finance

    Fax
number:      +44 131 658 3220

    

    or such
other address or fax number in England as the addressee may substitute by
notice, and such notice shall only be effective on:

     

    
      	
               
      

            	
              (a)

            	
              any
      effective date specified in that notice;
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      no date is specified or the date specified is less than 5 Business Days
      after the date when notice is received, the date falling 5 Business Days
      after the notice has been received.

            

    

     

    
      	
              27.3

            	
              Receipt

            

    

     

    A notice
shall be deemed to have been received in the absence of earlier
receipt:

     

    
      	
               
      

            	
              (a)

            	
              if
      delivered by hand or sent by prepaid recorded delivery or registered post
      at the time of actual delivery (provided that if delivery occurs on a day
      which is not a Business Day or after 5.30 p.m. it shall be deemed to be
      delivered at 9.00 am on the next Business
Day);

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      sent by prepaid first class recorded delivery or registered post from and
      to any place within the United Kingdom, 2 Business Days after posting
      (provided that if the date of posting is not a Business Day, it shall be
      deemed to have been posted at 9.00 am on the next Business Day) and proof
      that any such notice was properly addressed, prepaid and posted shall be
      sufficient evidence that such notice has been duly
  served;

            

    

     

    
      	
               
      

            	
              (c)

            	
              if
      sent by registered airmail, 5 Business Days after posting (provided that
      if the date of posting is not a Business Day, it shall be deemed to have
      been posted at 9.00 am on the next Business Day) and proof that any such
      notice was properly addressed, prepaid and posted shall be sufficient
      evidence that such notice has been duly
served;

            

    

     

    
      	
               
      

            	
              (d)

            	
              if
      sent by fax, upon receipt by the addressee of the complete text in legible
      form upon sending, subject to:

            

    

     

    
      	
               
      

            	
              (i)

            	
              confirmation
      of uninterrupted and error-free transmission by a transmission report;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              there
      having been no telephonic communication by the recipient to the sender
      that the fax has not been received in legible
  form:

            

    

     

    
      
        
        

      

      
        Page
53

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (aa)

            	
              within
      3 hours after sending, if sent on a Business Day and between the hours of
      9.00 a.m. and 4.00 p.m.; or

            

    

     

    
      	
               
      

            	
              (bb)

            	
              by
      noon on the next following Business Day if sent by 4.00 p.m. on a Business
      Day but before 9.00 a.m. on the next following Business
    Day.

            

    

     

    
      	
              27.4

            	
              Electronic
      communication

            

    

     

    For the
avoidance of doubt, a notice given under this Agreement shall not be validly
served if sent by electronic communication.

     

    
      	
              27.5

            	
              Service
      Documents

            

    

     

    The
provisions of this Clause shall not apply in relation to the service of Service
Documents.

     

    
      	
              27.6

            	
              Valid
      notices

            

    

     

    A notice
under or in connection with a Finance Document shall not be invalid by reason
that its contents or the manner of serving it do not comply with the
requirements of this Agreement or, where appropriate, any other Finance Document
under which it is served if:

     

    
      	
               
      

            	
              (a)

            	
              the
      failure to serve it in accordance with the requirements of this Agreement
      or other Finance Document, as the case may be, has not caused any party to
      suffer any significant loss or prejudice;
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the case of incorrect and/or incomplete contents, it should have been
      reasonably clear to the party on which the notice was served what the
      correct or missing particulars should have
been.

            

    

     

    
      	
              28

            	
              Joint
      and several liability

            

    

     

    
      	
              28.1

            	
              General

            

    

     

    All
liabilities and obligations of the Borrowers under this Agreement shall, whether
expressed to be so or not, be several and, if and to the extent consistent with
Clause 28.2, joint.

     

    
      	
              28.2

            	
              No
      impairment of Borrower's
obligations

            

    

     

    The
liabilities and obligations of a Borrower shall not be impaired by:

     

    
      	
               
      

            	
              (a)

            	
              this
      Agreement being or later becoming void, unenforceable or illegal as
      regards any other Borrower;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Lender entering into any rescheduling, refinancing or other arrangement of
      any kind with any other Borrower;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Lender releasing any other Borrower or any Security Interest created by a
      Finance Document; or

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      combination of the foregoing.

            

    

     

    
      	
              28.3

            	
              Principal
      debtors

            

    

     

    Each
Borrower declares that it is and will, throughout the Security Period, remain a
principal debtor for all amounts owing under this Agreement and the Finance
Documents and no Borrower shall in any circumstances be construed to be a surety
for the obligations of any other Borrower under this Agreement.

     

    
      
        
        

      

      
        Page
54

        
          

        

      

      
        
        

      

    

    
      	
              28.4

            	
              Subordination

            

    

     

    Subject
to Clause 28.5, during the Security Period, no Borrower shall:

     

    
      	
               
      

            	
              (a)

            	
              claim
      any amount which may be due to it from any other Borrower whether in
      respect of a payment made, or matter arising out of, this Agreement or any
      Finance Document, or any matter unconnected with this Agreement or any
      Finance Document; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              take
      or enforce any form of security from any other Borrower for such an
      amount, or in any other way seek to have recourse in respect of such an
      amount against any asset of any other Borrower;
  or

            

    

     

    
      	
               
      

            	
              (c)

            	
              set
      off such an amount against any sum due from it to any other Borrower;
      or

            

    

     

    
      	
               
      

            	
              (d)

            	
              prove
      or claim for such an amount in any liquidation, administration,
      arrangement or similar procedure involving any other Borrower or other
      Security Party; or

            

    

     

    
      	
               
      

            	
              (e)

            	
              exercise
      or assert any combination of the
foregoing.

            

    

     

    
      	
              28.5

            	
              Borrower's
      required action

            

    

     

    If during
the Security Period, the Lender, by notice to a Borrower, requires it to take
any action referred to in paragraphs (a) to (d) of Clause 28.4, in
relation to any other Borrower, that Borrower shall take that action as soon as
practicable after receiving the Lender's notice.

     

    
      	
              29

            	
              Relationship
      between the Lender and the Swap
Bank

            

    

     

    Each
Borrower acknowledges that:

     

    
      	
               
      

            	
              (a)

            	
              it
      has or will enter into certain documents with the Swap Bank (including the
      Master Agreements) and may, under certain circumstances, become indebted
      to the Swap Bank;

            

    

     

    
      	
               
      

            	
              (b)

            	
              pursuant
      to arrangements between the Lender and the Swap Bank, the Lender has
      agreed to hold the benefit of each of the Security Interests created
      pursuant to the Finance Documents (including the Security Interests
      created pursuant to each Mortgage) on trust for itself and the Swap Bank;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Secured Liabilities include those obligations owed by the Borrowers to the
      Swap Bank pursuant to the Master Agreement and the other Finance Documents
      entered into between the Borrowers and the Swap Bank and the obligations
      owed by the Borrowers to the Lender pursuant to the Swap Bank
      Indemnity.

            

    

     

    
      	
              30

            	
              Supplemental

            

    

     

    
      	
              30.1

            	
              Rights
      cumulative, non-exclusive

            

    

     

    The
rights and remedies which the Finance Documents give to the Lender
are:

     

    
      	
               
      

            	
              (a)

            	
              cumulative;

            

    

     

    
      	
               
      

            	
              (b)

            	
              may
      be exercised as often as appears expedient;
and

            

    

     

    
      	
               
      

            	
              (c)

            	
              shall
      not, unless a Finance Document explicitly and specifically states so, be
      taken to exclude or limit any right or remedy conferred by any
      law.

            

    

     

    
      
        
        

      

      
        Page
55

        
          

        

      

      
        
        

      

    

     

    
      	
              30.2

            	
              Invalidity

            

    

     

    If at any
time any provision of a Finance Document is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction, that shall not
in any way affect or impair:

     

    
      	
               
      

            	
              (a)

            	
              the
      validity, legality or enforceability in that jurisdiction of any other
      provision of that Finance Document;
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      validity, legality or enforceability under the law of any other
      jurisdiction of that or any other provision of that Finance
      Document.

            

    

     

    
      	
              30.3

            	
              Counterparts

            

    

     

    A Finance
Document may be executed in any number of counterparts and by the parties on
separate counterparts.  Each counterpart shall constitute an original
of the relevant Finance Document, but together the counterparts shall constitute
one document.

     

    
      	
              30.4

            	
              Third
      party rights

            

    

     

    The
parties do not intend that any term of this Agreement shall be enforceable
solely by virtue of the Contracts (Rights of Third Parties) Act 1999 by any
person who is not a party to this Agreement.

     

    
      	
              31

            	
              Governing
      law

            

    

     

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

     

    
      	
              32

            	
              Jurisdiction

            

    

     

    
      	
              32.1

            	
              Jurisdiction
      of the English courts

            

    

     

    The
parties irrevocably agree, for the benefit of the Lender, and subject to
Clause 32.2, that the English courts shall have exclusive jurisdiction to
settle any dispute arising out of or in connection with this
Agreement.

     

    
      	
              32.2

            	
              Proceedings
      in other jurisdictions

            

    

     

    Nothing
in this Clause shall limit the right of the Lender in respect of any such
dispute, to take proceedings against any Borrower in any other court of
competent jurisdiction.

     

    
      	
              32.3

            	
              Waiver
      of objections

            

    

     

    Each
Borrower irrevocably agrees to waive any objection to any court specified in
this Clause, whether on the grounds of venue, or on the grounds that the forum
is not appropriate. Each Borrower further irrevocably agrees that a judgment of
any court specified in this Clause shall be conclusive and binding upon them and
may be enforced in the courts of any other jurisdiction.

     

    
      	
              33

            	
              Service
      of process

            

    

     

    
      	
              33.1

            	
              Address
      for service

            

    

     

    The
Borrowers' address for service under this Clause is Ince & Co, International
House, 1 St. Katharine's Way, London E1W 1AY.  Items served at this
address must be marked for the personal attention of Mr. Paul
Herring.

     

    
      
        
        

      

      
        Page
56

        
          

        

      

      
        
        

      

    

     

    
      	
              33.2

            	
              Agreed
      method of service

            

    

     

    Any
Service Document may be served on a Borrower by posting it by pre-paid first
class recorded delivery post to the address for service specified in this
Clause, or to such other address for service within England as may be notified
in accordance with Clause 27 to the Lender.

     

    This Agreement has been
entered into on the date stated at the beginning of this Agreement.

     

    
      
        
        

      

      
        Page
57

        
          

        

      

      
        
        

      

    

     

    Schedule 1 -
Drawdown Notice

     

    
      	
              To:

            	
              Bank
      of Scotland plc

            

    

    
      	
               
      

            	
              Pentland
      House

            

    

    
      	
               
      

            	
              8
      Lochside Avenue

            

    

    
      	
               
      

            	
              Edinburgh

            

    

    
      	
               
      

            	
              EH12
      9DJ

            

    

     

    Attention:
Marine Finance

     

    Drawdown
Notice

     

    
      	
              1

            	
              We
      refer to the loan agreement (the Loan Agreement) dated
      **                     and
      made between ourselves, as Borrowers, and yourselves, as Lender, in
      connection with a facility of up to
      US$**                    .  Terms
      defined in the Loan Agreement have their defined meanings when used in
      this Drawdown Notice.

            

    

     

    
      	
              2

            	
              We
      request to borrow as follows:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Amount:
      US$**                    ;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Drawdown
      Date:  **                    ;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Duration
      of the first Interest Period shall be
      **                     months;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
              3

            	
              We
      represent and warrant that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      representations and warranties in Clause 9 of the Loan Agreement
      would remain true and not misleading if repeated on the date of this
      notice with reference to the circumstances now
  existing;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              this
      Drawdown Notice is the [Anawan Advance]/[Agawam Advance]/[Aquidneck
      Advance]/[Pequod Advance].*

            

    

     

    
      	
              4

            	
              This
      notice cannot be revoked without the prior consent of the
      Lender.

            

    

     

    
      	
              5

            	
              [We
      authorise you to deduct the commitment fee referred to in Clause 19.1
      (b) from the amount of the
Advance.]

            

    

     

    [Name of
Signatory]

     

     

    
      
        

      

    

    Director

    for and
on behalf of

    [                              ]

     

    *delete
as appropriate

     

    
      
        
        

      

      
        Page
58

        
          

        

      

      
        
        

      

    

     

    Schedule 2 -
Condition precedent documents

     

    Part
A

     

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

     

    
      	
              1

            	
              A
      duly executed original of each Finance Document (and of each document
      required to be delivered by each Finance Document) other than those
      referred to in Part B.

            

    

     

    
      	
              2

            	
              Copies
      of the certificate of incorporation and constitutional documents of each
      Borrower and each Security Party.

            

    

     

    
      	
              3

            	
              Copies
      of resolutions of the shareholders and directors of each Borrower and each
      Security Party authorising the execution of each of the Finance Documents
      to which that Borrower or that Security Party is a party and, in the case
      of a Borrower, authorising named officers or attorneys (each an Authorised Officer) to
      give the Drawdown Notice and other notices under this
      Agreement.

            

    

     

    
      	
              4

            	
              The
      original of any power of attorney under which any Finance Document is
      executed on behalf of the Borrower or a Security
  Party.

            

    

     

    
      	
              5

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

            

    

     

    
      	
              6

            	
              The
      originals of any mandates or other documents required in connection with
      the opening or operation of the Earnings
  Accounts.

            

    

     

    
      	
              7

            	
              A
      survey report addressed to the Lender, stated to be for the purposes of
      this Agreement and dated not earlier than 45 days before the date of this
      Agreement from an independent marine surveyor selected by the Lender in
      respect of the physical condition of one of the
  Ships.

            

    

     

    
      	
              8

            	
              Documentary
      evidence that the agent for service of process named in Clause 33 has
      accepted its appointment.

            

    

     

    
      	
              9

            	
              Such
      "know your customer" documentary evidence as the Lender may require in
      relation to the Borrower and each Security Party to be provided in
      accordance with the Lender's anti-money laundering
      regulations.

            

    

     

    
      	
              10

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

            

    

     

    
      	
              11

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

            

    

     

    
      	
              12

            	
              The
      Lender being satisfied that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              no
      litigation by any entity (private or governmental) shall be pending or
      threatened with respect to the transactions contemplated hereunder or any
      documentation executed in connection therewith, or which the Lender shall
      determine is reasonably likely to have a materially adverse effect on the
      business, property, assets, liabilities, condition (financial or
      otherwise) or prospects of the Borrower, any Security Party or their
      subsidiaries, either individually or taken as a
  whole;

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      necessary governmental approvals (domestic and foreign) and third party
      approvals and/or consents in connection with transactions contemplated by
      the transactions contemplated hereunder and otherwise referred to herein
      shall have been obtained and remain in effect, and all applicable waiting
      periods shall have expired without any action being taken by any competent
      authority which, in the judgment of the Lender, restrains, prevents, or
      imposes materially adverse conditions contemplated by the transactions
      contemplated hereunder or otherwise referred to
      herein.  Additionally, there shall not exist any judgment,
      order, injunction or other restraint prohibiting or imposing materially
      adverse conditions upon the transactions contemplated by the transactions
      contemplated hereunder; and

            

    

     

    
      
        
        

      

      
        Page
59

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              nothing
      shall have occurred (and the Lender shall not have become aware of facts
      or conditions not previously known to it), which the Lender shall
      determine is reasonably likely to have a material adverse effect on the
      rights or remedies of the Lender, or on the ability of the Borrowers or
      any Security Party or their subsidiaries, either individually or taken as
      a whole, to perform their obligations to the Lender, or which is
      reasonably likely to have a materially adverse effect on the business,
      property, assets, liabilities, condition (financial or otherwise) or
      prospects of the Borrowers, the Security Parties or their subsidiaries,
      either individually or taken as a
whole.

            

    

     

    
      
         

      

      
        Page
60

        
          

        

      

      
         

      

    

    Part
B

     

    The
following are the documents referred to in Clause 8.1(b) and apply in
relation to the relevant Ship Owning Borrower and the Ship Owned by
it:

     

    
      	
              1

            	
              A
      duly executed original of the:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Mortgage;

            

    

     

    
      	
               
      

            	
              (b)

            	
              General
      Assignment;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Deed
      of Covenant;

            

    

     

    
      	
               
      

            	
              (d)

            	
              Accounts
      Security Deed;

            

    

     

    
      	
               
      

            	
              (e)

            	
              Release
      Documents relating to such Ship,

            

    

     

    (and of
each document to be delivered by each of them).

     

    
      	
              2

            	
              Documentary
      evidence that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Ship is definitively and permanently registered in the name of the Ship
      Owning Owner under the Bahamas flag at the Port of
  Nassau;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Ship maintains the class +A1, Chemical Carrier, Oil Carrier, (E), +AMS,
      +ACCU with the American Bureau of Shipping free of all overdue
      recommendations and conditions of such Classification
    Society;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Mortgage has been duly registered against the Ship as a valid first
      priority ship mortgage in accordance with the laws of the
      Bahamas;

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Ship has satisfactory documentation relating to the upgrading of the Ship
      to a double hulled vessel.

            

    

     

    
      	
              3

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

            

    

     

    
      	
               
      

            	
              (a)

            	
              a
      certified copy of the Ship Management Agreement and a letter of
      undertaking executed by the Approved Manager in favour of the Lender in
      the terms required by the Lender agreeing certain matters in relation to
      the management of the Ship and subordinating the rights of the Approved
      Manager against the Ship Owning Borrower to the rights of the Lender under
      the Finance Documents; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              copies
      of the Approved Manager's Document of Compliance and of Ship's Safety
      Management Certificate (together with any other details of the applicable
      safety management system which the Lender
  requires).

            

    

     

    
      	
              4

            	
              Evidence
      that the Borrowers have enter into arrangements with the Swap Bank
      pursuant to the terms of the Master Agreement, pursuant to which the
      Borrowers have hedged at least 50 per cent. their exposure under this
      Agreement to interest rate
fluctuations.

            

    

     

    
      	
              5

            	
              Valuations
      in respect of the Ship, addressed to the Lender and stated to be for the
      purposes of this Agreement and dated not earlier than 45 days before the
      proposed Drawdown Date, showing the Market Value of the Ship being not
      less that 120 per cent. of the Advance to be disbursed on the relevant
      Drawdown Date.

            

    

     

    
      
        
        

      

      
        Page
61

        
          

        

      

      
        
        

      

    

     

    
      	
              6

            	
              A
      survey report addressed to the Lender, stated to be for the purposes of
      this Agreement and dated not earlier than 45 days before the date of the
      relevant Drawdown Date from an independent marine surveyor selected by the
      Lender in respect of the conversion of the Ship, from a single hulled
      vessel to a double hulled vessel.

            

    

     

    
      	
              7

            	
              Favourable
      legal opinions from lawyers appointed by the Lender on such matters
      concerning the laws of England, the Bahamas, the Marshall Islands and such
      other relevant jurisdictions as the Lender may
  require.

            

    

     

    
      	
              8

            	
              A
      favourable opinion from BankServe Insurance Services Limited on such
      matters relating to the insurances for the Ship as the Lender may
      require.

            

    

     

    
      	
              9

            	
              The
      Lender being satisfied that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              no
      litigation by any entity (private or governmental) shall be pending or
      threatened with respect to the transactions contemplated hereunder or any
      documentation executed in connection therewith, or which the Lender shall
      determine is reasonably likely to have a materially adverse effect on the
      business, property, assets, liabilities, condition (financial or
      otherwise) or prospects of the Borrower, any Security Party or their
      subsidiaries, either individually or taken as a
  whole;

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      necessary governmental approvals (domestic and foreign) and third party
      approvals and/or consents in connection with transactions contemplated by
      the transactions contemplated hereunder and otherwise referred to herein
      shall have been obtained and remain in effect, and all applicable waiting
      periods shall have expired without any action being taken by any competent
      authority which, in the judgment of the Lender, restrains, prevents, or
      imposes materially adverse conditions contemplated by the transactions
      contemplated hereunder or otherwise referred to
      herein.  Additionally, there shall not exist any judgment,
      order, injunction or other restraint prohibiting or imposing materially
      adverse conditions upon the transactions contemplated by the transactions
      contemplated hereunder; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              nothing
      shall have occurred (and the Lender shall not have become aware of facts
      or conditions not previously known to it), which the Lender shall
      determine is reasonably likely to have a material adverse effect on the
      rights or remedies of the Lender, or on the ability of the Borrowers or
      any Security Party or their subsidiaries, either individually or taken as
      a whole, to perform their obligations to the Lender, or which is
      reasonably likely to have a materially adverse effect on the business,
      property, assets, liabilities, condition (financial or otherwise) or
      prospects of the Borrowers, the Security Parties or their subsidiaries,
      either individually or taken as a
whole.

            

    

     

    
      
         

      

      
        Page
62

        
          

        

      

      
         

      

    

    Schedule 3
– Mandatory Cost formula

     

    
      	
              1

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

            

    

     

    
      	
              2

            	
              The
      Mandatory Cost where the Lender is lending from a lending office in a
      Participating Member State will be the percentage notified by the Lender
      to the Borrowers.  This percentage will be certified by the
      Lender in its notice to the Borrowers to be its reasonable determination
      of the cost (expressed as a percentage of all Advances made by the Lender
      from that lending office) of complying with the minimum reserve
      requirements of the European Central Bank in respect of loans made from
      that lending office.

            

    

     

    
      	
              3

            	
              The
      Mandatory Cost where the Lender is lending from a lending office in the
      United Kingdom will be calculated by the Lender as a percentage rate per
      annum on the first day of each Interest Period (or as soon as practicable
      thereafter) as follows

            

    

     

    
      
        	
                E x 0.01

              	
                         per
      cent per annum

              
	
                300

              	 
      

      

    

     

    where "E"
is designed to compensate the Lender for amounts payable under the Fees Rules
and is calculated by the Lender as being the rate of charge payable by the
Lender to the Financial Services Authority pursuant to the Fees Rules in respect
of the relevant financial year of the Financial Services Authority (calculated
for this purpose by the Lender as being the average of the Fee Tariffs
applicable to the Lender for that financial year) and expressed in pounds per
£1,000,000.

     

    
      	
              4

            	
              For
      the purposes of this Schedule:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Fees Rules means the
      rules on periodic fees contained in the FSA Supervision Manual or such
      other law or regulation as may be in force from time to time in respect of
      the payment of fees for the acceptance of
  deposits;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Fee Tariffs means the
      fee tariffs specified in the Fees Rules under the activity group A.1
      Deposit acceptors (ignoring any minimum fee or zero rated fee required
      pursuant to the Fees Rules but taking into account any applicable discount
      rate);

            

    

     

    
      	
               
      

            	
              (c)

            	
              Participating Member
      State means any member state of the European Communities that
      adopts or has adopted the euro as its lawful currency in accordance with
      legislation of the
      European Community relating to Economic and Monetary Union;
      and

            

    

     

    
      	
               
      

            	
              (d)

            	
              Tariff Base has the
      meaning given to it in, and will be calculated in accordance with, the
      Fees Rules.

            

    

     

    
      	
              5

            	
              Any
      determination by the Lender pursuant to this Schedule in relation to a
      formula, the Mandatory Cost or any amount payable to the Lender shall, in
      the absence of manifest error, be conclusive and binding on the
      Borrowers.

            

    

     

    
      	
              6

            	
              The
      Lender may from time to time, after consultation with the Borrowers,
      determine and notify to the Borrowers any amendments which are required to
      be made to this Schedule in order to comply with any change in law,
      regulation or any requirements from time to time imposed by the Bank of
      England, the Financial Services Authority or the European Central Bank
      (or, in any case, any other authority which replaces all or any of its
      functions) and any such determination shall, in the absence of manifest
      error, be conclusive and binding on the
  Borrowers.

            

    

     

    
      
         

      

      
        Page
63

        
          

        

      

      
         

      

    

    Schedule 4
- Designation notice

     

    **                    [Lender]

     

    **

     

    **

     

    Dear
Sirs

     

    Loan
Agreement dated
**                     made
between (i) ourselves as Borrowers and (ii) yourselves as Lender (the Loan
Agreement).

     

    We refer
to:-

     

    
      	
              1

            	
              The
      Loan Agreement;

            

    

     

    
      	
              2

            	
              the
      Master Agreement dated
      **                     made
      between ourselves and
      **                    ;
      and

            

    

     

    
      	
              3

            	
              a
      Confirmation delivered pursuant to the said Master Agreement dated
      **                     and
      addressed by
      **                     to
      us.

            

    

     

    We hereby
give you notice of the Confirmation and hereby confirm that the Transaction
evidenced by it will be designated as a "Designated Transaction" for the
purposes of the Loan Agreement and the Finance Documents.

     

    Yours
faithfully,

     

     

    
      
**                    [Name
of Borrowers]

    
      
         

      

      
        Page
64

        
          

        

      

      
         

      

    

    Appendix
A – Form of Mortgage

    
      
         

      

      
        Page
65

        
          

        

      

      
         

      

    

    Appendix
B – Form of Deed of Covenant

    
      
         

      

      
        Page
66

        
          

        

      

      
         

      

    

    Appendix
C – Form of General Assignment

    
      
         

      

      
        Page
67

        
          

        

      

      
         

      

    

    Appendix
D – Form of Accounts Security Deed

    
      
         

      

      
        Page
68

        
          

        

      

      
         

      

    

    Appendix
E – Form of Guarantee

    
      
         

      

      
        Page
69

        
          

        

      

      
         

      

    

    Appendix
F – Form of Master Agreement Assignment

    
      
         

      

      
        Page
70

        
          

        

      

      
         

      

    

     

    
      
        
          
            	
                    Borrowers

                  	 
      
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Agawam
      Shipping Corp.

                  	
                    )

                  
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Aquidneck
      Shipping Corp.

                  	
                    )

                  
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Anawan
      Shipping Corp.

                  	
                    )

                  
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Isabelle
      Shipholdings Corp.

                  	
                    )

                  
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Boss
      Tankers Ltd.

                  	
                    )

                  
	 
      	 
      
	
                    Lender

                  	 
      
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Bank
      of Scotland plc

                  	
                    )

                  
	 
      	 
      
	
                    Swap
      Bank

                  	 
      
	 
      	 
      
	
                    Signed
by

                  	
                    )

                  
	
                    duly
      authorised for and on behalf of

                  	
                    )

                  
	
                    Bank
      of Scotland plc

                  	
                    )

                  

          

        

      

    

     

    
      
         

      

      
        Page
71

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