Document:

d889269_ex4-11.htm

    

      EXHIBIT
4.11

      

      

      

      

      DATED  24th  AUGUST
2007

      

      

      

      

      BREMER
LANDESBANK KREDITANSTALT OLDENBURG - GIROZENTRALE -

      

      as
Lender

      

      -
a n d -

      

      NEDERLAND
NAVIGATION INC.

      LAKEVIEW
NAVIGATION INC.

      

      

      as
joint and several Borrowers

      

      

      

      

      

      

      ____________________________________________

      

       FACILITY
AGREEMENT

      for
a Secured Loan Facility of up to

      $
55,250,000.00

      ____________________________________________

      

      

      

      

      
        

      

      Law
Offices

      G.
E. BAIRACTARIS & PARTNERS

      130,
Kolokotroni str., Piraeus, Greece

      
        

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      I N D E
X

      

      
        	
                CONTENTS

              	 
      	
                PAGE

              
	 
      	 
      	 
      
	
                1

              	
                PURPOSE
      AND DEFINITIONS

              	
                4

              
	 
      	 
      	 
      
	
                2.

              	
                THE
      LOAN

              	
                13

              
	 
      	 
      	 
      
	
                3.

              	
                INTEREST
      AND INTEREST PERIODS

              	
                16

              
	 
      	 
      	 
      
	
                4.

              	
                ALTERNATIVE
      INTEREST RATES

              	
                17

              
	 
      	 
      	 
      
	
                5.

              	
                REPAYMENT,
      PREPAYMENT, AND APPLICATION OF FUNDS

              	
                18

              
	 
      	 
      	 
      
	
                6.

              	
                PAYMENTS

              	
                21

              
	 
      	 
      	 
      
	
                7.

              	
                FEES

              	
                22

              
	 
      	 
      	 
      
	
                8.

              	
                REPRESENTATIONS
      AND WARRANTIES

              	
                22

              
	 
      	 
      	 
      
	
                9.

              	
                CONDITIONS
      PRECEDENT AND SUBSEQUENT

              	
                25

              
	 
      	 
      	 
      
	
                10.

              	
                SECURITY

              	
                28

              
	 
      	 
      	 
      
	
                11.

              	
                COVENANTS

              	
                28

              
	 
      	 
      	 
      
	
                12.

              	
                EVENTS
      OF DEFAULT

              	
                33

              
	 
      	 
      	 
      
	
                13.

              	
                INDEMNITIES

              	
                37

              
	 
      	 
      	 
      
	
                14.

              	
                ASSIGNMENT
      AND PARTICIPATION

              	
                39

              
	 
      	 
      	 
      
	
                15.

              	
                CHANGE
      IN CIRCUMSTANCES – INCREASED COST

              	
                40

              
	 
      	 
      	 
      
	
                16.

              	
                WAIVER
      AND REMEDIES

              	
                42

              
	 
      	 
      	 
      
	
                17.

              	
                INVALIDITY
      OF PROVISIONS

              	
                42

              
	 
      	 
      	 
      
	
                18.

              	
                NOTICES

              	
                42

              
	 
      	 
      	 
      
	
                19.

              	
                LAW
      AND JURISDICTION

              	
                43

              
	 
      	 
      	 
      
	
                20.

              	
                MISCELLANEOUS

              	
                44

              
	 
      	 
      	 
      
	
                Schedule
      1

              	 
      	
                46

              
	 
      	 
      	 
      
	
                Schedule
      2

              	 
      	
                46

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THIS AGREEMENT is made the
24th day of August of two thousand seven (2007)

      

      BY
AND AMONG

      

      1.    BREMER  LANDESBANK  KREDITANSTALT  OLDENBURG  -
GIROZENTRALE - , a company duly incorporated and existing under the laws
of the Federal Republic of Germany, having its registered office at Domshof 26,
28195 Bremen, Federal Republic of Germany, (hereinafter called  the
“Bank”) of the one part,
and

      

      2.           NEDERLAND NAVIGATION INC., a
corporation duly incorporated and existing under the laws of the Republic of the
Marshall Islands, having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (hereinafter
called “NEDERLAND”),
and

      

      3.           LAKEVIEW NAVIGATION INC., a
corporation duly incorporated and existing under the laws of the Republic of the
Marshall Islands, having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (hereinafter
called “LAKEVIEW”),
(NEDERLAND and LAKΕVIEW hereinafter also together
called the “Borrowers”
and each one the “Borrower”), of the other
part.

      

      IT
IS AGREED AS FOLLOWS:

       

      1.            
  PURPOSE AND DEFINITIONS

       

      

      1.01.           This
Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrowers jointly and severally a loan facility
of up to United States  Dollars  Fifty Five Million Two
Hundred Fifty Thousand ($ 55,250,000.00) divided into two (2) tranches as
follows:

      

      
        	
                 
      

              	
                (i)

              	
                Tranche
      A of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
      ($ 27,625,000.00) for the purpose of part repayment to the Bank of the
      Existing Loan, and assisting NEDERLAND to part finance the acquisition
      cost during construction of a Product/Chemical Tanker of approximately
      37,000 dwt designated as Hull No. 2192 to be constructed by Hyundai Mipo
      Dockyard Co. Ltd. according to the terms of the Vessel A Contract,
      and

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Tranche
      B of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
      ($ 27,625,000.00) for the purpose of part repayment to the Bank of the
      Existing Loan, and assisting LAKEVIEW to part finance the acquisition cost
      during construction of a Product/Chemical Tanker of approximately 37,000
      dwt designated as Hull No. 2193 to be constructed by Hyundai Mipo Dockyard
      Co. Ltd. according to the terms of the Vessel B
  Contract.

              

      

      

      1.02.           Definitions. In this
Agreement, unless the context otherwise requires, the following expressions
shall have the following meanings:

      

      “Advances” means together the
Tranche A Advance A, the Tranche A Advance B, the Tranche A Advance C, the
Tranche A Advance D, the Tranche A Advance E, the Tranche B Advance A, the
Tranche B Advance B, the Tranche B Advance C, the Tranche B Advance D, and the
Tranche B Advance E, and in the singular means any of them;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      “Agreement” means this
Agreement, and  the General Business Conditions, and the General Loan
Conditions of Bremer Landesbank Kreditanstalt Oldenburg - Girozentrale -
attached as Exhibits 1, and 2, which form an integral part of this
Agreement;

      

      “Banking Day” means any day on
which banks and foreign exchange markets in Frankfurt, Federal Republic of
Germany, in New York, United States of America, and in Greece and in each
country or place in or at which an act is required to be done under this
Agreement in accordance with the usual practice of the Bank, are open for the
transaction of business of the nature contemplated in this
Agreement;

      

      “Bank” means the Bank as
specified in the beginning of this Agreement and the successors and assigns of
the Bank;

      

      “Borrowed Money” means
indebtedness incurred in respect of (i)money borrowed or raised, (ii)any bond,
note, loan stock, debenture or similar instrument, (iii)acceptance of
documentary credit facilities, (iv)deferred payments for assets or services
acquired, (v)rental payments under leases (whether in respect of land,
machinery, equipment or otherwise) entered into primarily as a method of raising
finance or of financing the acquisition of the asset leased, (vi)guarantees,
bonds, stand-by letters of credit or other instruments issued in connection with
the performance of contracts and (vii)guarantees or other assurances against
financial loss in respect of indebtedness of any person falling within any of
items (i) to (vi) above;

      

      “Borrowers” means together
NEDERLAND and LAKEVIEW as specified at the beginning of this Agreement, and the
successors and permitted assigns of the Borrowers, and in the singular means
anyone of the Borrowers.

      

      “Break Costs” means all costs,
losses, premiums or penalties incurred by the Bank as a result of the Bank
receiving any prepayment, whether voluntary or compulsory, of all or any part of
the Loan or any other payment under or in relation to the Security Documents on
a day other than the due date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in liquidating or re-employing
deposits from third parties acquired to effect or maintain the Loan and interest
on the amount of the Loan being prepaid or paid from the date of commencement of
the then current Interest Period to the last day thereof as certified by the
Bank;

      

      “Builder” means Hyundai Mipo
Dockyard Co. Ltd., a company organized and existing under the laws of the
Republic of Korea, having its principal place of business at 1381, Bangeo-Dong,
Dong-Ku, Ulsan, Korea, and includes the successors and assigns of the
Builder;

      

      “Cash Liquidity” means a
minimum amount of Dollars Five Million ($5,000,000.00) held in the Cash
Liquidity Accounts;

      

      “Cash Liquidity Accounts”
means the accounts in the name of
the Corporate Guarantor with a bank or banks, including the Bank, where the Cash
Liquidity is to remain credited in aggregate for the duration of the Security
Period;

      

      “Commitment” means the amount
which the Bank agreed to lend to the Borrowers under Clause 2, as modified by
any relevant term of this Agreement;

      

      “Contract” means each of
Vessel A Contract, and Vessel B Contract, and in the plural means both of
them;

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      “Contract Assignment Consent and
Acknowledgement” means the acknowledgement of notice of, and consent to,
the assignment by each Borrower in favour of the Bank in respect of the
respective Contract, to be given by the Builder;

      

      “Corporate Guarantee” means
the corporate guarantee executed or (as the context may require) to be executed
by the Corporate Guarantor in favour of the Bank in form and substance
acceptable to the Bank;

      

      “Corporate Guarantor” means
Omega Navigation Enterprises Inc., a company duly incorporated and existing
under the laws of Marshall Islands, having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH
96960, and includes its successors in title;

      

      “Current Account” means the
account or accounts in the name of each Borrower with the Bank, as the Bank in
its sole discretion may require, to which (inter alia) all sums payable by the
Borrowers in accordance with Clause 5.02 are to be paid;

      

      “Default Rate” means that rate
of interest per annum which is determined in accordance with the provisions of
Clause 3.03;

      

      “Deferred Interest” means the
interest on each Tranche accruing from the Drawdown Date of Advance A and
Advance B, up and until the Drawdown Date of Advance C of each
Tranche;

      

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

      

      “Drawdown Dates” means the
dates requested by the Borrowers that each Advance  be advanced to
them pursuant to Clause 2, or (as the context requires) the dates on which each
Advance is actually made, and in the singular means any of them;

      

      “Drawdown Notice” means a
notice substantially in the form of Schedule 1, or in such other form as the
Bank approves or requires;

      

      “Encumbrance” means any
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, security interest, title retention, arrest, seizure, garnishee order
(whether nisi or absolute) or any other order or judgment having similar effect
or other encumbrance of any kind securing or any right conferring a priority of
payment in respect of any obligation of any person;

      

      “Euro” and the sign “€” means (available and
transferable funds in) the single currency of member states of the European
Union introduced in accordance with the provisions of Article 109(1) of the
Treaty of Rome of 25 March 1957 as amended by the Single European Act 1986 and
the Maastricht Treaty (which was signed on 7 November 1992 and came into force
on 1st June
1993 as amended, varied or supplemented from time to time);

      

      “Event of Default” means any
one of those events set out in Clause 12 or described as such in any other of
the Security Documents;

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      “Existing Loan Agreement” and
“Existing Loan” means
the Loan Agreement dated 4th July
2007 in respect of a loan of Dollars Nineteen Million Eight Hundred Ninety
Thousand ($ 19,890,000.00) between (i) the Borrowers together with other
borrowers, and (ii) the Bank (the “Existing Loan”), to finance in
part the first payment due to the Builder in respect of the Vessels under the
Contracts (and other vessels under other contracts).

      

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

      

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

      

      (b)the
expenses referred to in Clause 13.02; and

      

      (c)interest
on all such losses, liabilities, costs, charges, expenses, damages and outgoings
referred in (a) and (b) above from the date on which the same were suffered,
incurred or paid by the Bank until the date of receipt or recovery thereof
(whether before or after judgment) at a rate per annum calculated in accordance
with Clause 3.03 (as conclusively certified by the Bank);

      

      “Fees” means the fees set out
in Clause 7;

      

      “Indebtedness” means, in
relation to any person, any obligation (whether present or future, actual or
contingent, secured or unsecured, as principal or surety or otherwise) for the
payment or repayment of money;

      

      “Interest Payment Date” means
in respect of the Loan or any part thereof in respect of which a separate
Interest Period is fixed, the last day of the relevant Interest Period and in
case of any Interest Period which overruns one or more Repayment Dates, each
such Repayment Date and the last day of such Interest Period;

      

      “Interest Period” means each
period for the calculation of interest in relation to the Loan or any part
thereof, ascertained in accordance with Clause 3.02;

      

      “Interest Rate” means in
relation to any Interest Period the rate or rates determined in accordance with
Clause 3;

      

      “LIBOR” means, in relation to
a particular period the rate per cent per annum at which the Bank is able in
accordance with its normal practices to acquire deposits in Dollars in amounts
comparable with the amount in relation to which LIBOR is to be determined and
for a period equal to the relevant period, in the London Interbank Market at or
about 11 a.m. (London time) on the second Banking Day before the first day of
such period;

      

      “Loan” means the aggregate
principal amount of the borrowing by the Borrowers under this Agreement or (as
the context requires) the principal amount thereof at any time being advanced
and outstanding under this Agreement;

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      

      “Margin” means zero point
eighty five per cent (0.85%) per annum;

      

      “Outstanding Indebtedness”
means at any time the aggregate of the Loan and all unpaid interest accrued
thereon, the Expenses and all other sums of money whatsoever from time to time
due and owing from the Borrowers to the Bank hereunder or pursuant to the other
Security Documents and all interest accrued thereon;

      

      “Post Delivery Facility” and
“Post Delivery
Commitment” means the facility of up to Dollars Sixty Six Million Three
Hundred  Thousand ($ 66,300,000.00) agreed to be provided by the Bank
to the Borrowers jointly and severally, under the terms and conditions of a loan
agreement to be executed between the Bank and the Borrowers

      

      “Refund Guarantee” means in
relation to each Contract, a guarantee of the obligations of the Builder to
refund to the respective Borrower which is a party to that Contract any stage
payments paid by that Borrower to the Builder pursuant to the relevant Contract,
to be in form and on terms acceptable to the Bank and to be issued by the Refund
Guarantor in favour of the relevant Borrower, and in the plural means all of
them;

      

      “Refund Guarantee Assignment Consent
and Acknowledgement” means the acknowledgement of notice of, and consent
to, the first priority assignment by the respective Borrower in favour of the
Bank of the Refund Guarantees, to be given by the Refund Guarantor;

      

      “Refund Guarantor” means THE
EXPORT-IMPORT BANK OF KOREA, 16-1, Yoido-dong, Yeongdeungpo-Gu, Seoul 150-996,
Korea, or any other bank acceptable to the Bank which has issued or will issue
the Refund Guarantees and includes its successors in title;

      

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

      

       “Security Assignment”
means the first priority assignments of the Contracts and of the Refund
Guarantees, executed or (as the context may require) to be executed by the
Borrowers in favour of the Bank in form acceptable to the Bank;

      

      “Security Documents” means
this Agreement, the documents referred to in Clause 10, and any and every other
document from time to time executed to secure the obligations of the Borrowers
and/or any other Security Party to the Bank under this Agreement;

      

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

      

      “Security Period” means the
period commencing on the date of this Agreement and terminating on the date upon
which all moneys payable or to become payable to the Bank at any time and from
time to time pursuant to the terms of this Agreement and any of the other
Security Documents shall have been paid and discharged in full;

      

      “Total Loss” means with
respect to a Vessel  (a) actual, constructive, compromised or arranged
total loss of

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      the
Vessel; or (b) requisition for title or other compulsory acquisition of the
Vessel; or (c) capture, seizure, detention, arrest or confiscation of the
Vessel, unless such Vessel is released within thirty (30) days
thereafter;

      

      “Tranche” means each of
Tranche A, and Tranche B, and in the plural means all of them;

      

      “Tranche A” means the
borrowing of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) by the Borrowers for the purpose of assisting NEDERLAND to
part finance the acquisition cost during construction of Vessel A to be
constructed by the Builder;

      

      “Tranche A Advance A” means
the borrowing of the part of Tranche A in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche A Advance B” means
the borrowing of the part of Tranche A in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche A Advance C” means
the borrowing of the part of Tranche A in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;

      

      “Tranche A Advance D” means
the borrowing of the part of Tranche A in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;

      

      “Tranche A Advance E” means
the borrowing of the part of Tranche A in an amount of up to Dollars Five
Million Five Hundred Twenty Five Thousand ($ 5,525,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche A Final Maturity
Date” means the date on which the sixth (6th)
installment of the Vessel A Contract Price becomes due and payable under the
Vessel A Contract by NEDERLAND  to the Builder, or the Vessel A
Delivery Date, whichever occurs first;

      

      “Tranche B” means the
borrowing of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) by the Borrowers for the purpose of assisting LAKEVIEW to part
finance the acquisition cost during construction of Vessel B to be constructed
by the Builder;

      

       “Tranche B Advance A”
means the borrowing of the part of Tranche B in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche B Advance B” means
the borrowing of the part of Tranche B in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche B Advance C” means
the borrowing of the part of Tranche B in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;

      

      “Tranche B Advance D” means
the borrowing of the part of Tranche B in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      

      “Tranche B Advance E” means
the borrowing of the part of Tranche B in an amount of up to Dollars Five
Million Five Hundred Twenty Five Thousand ($ 5,525,000.00) advanced or to be
advanced to the Borrowers;

      

      “Tranche B Final Maturity
Date” means the date on which the sixth (6th)
installment of the Vessel B Contract Price becomes due and payable under the
Vessel B Contract by LAKEVIEW to the Builder, or the Vessel B Delivery Date,
whichever occurs first;

      

      “USGAAP”  means
generally accepted accounting principles as from time to time in effect in the
United States of America.

      

      “Vessel” means each of Vessel
A, and Vessel B, and in the plural means all of them;

      

      “Vessel A” means the
Product/Chemical Tanker of approximately 37,000 dwt currently designated as Hull
No. 2192 to be constructed by the Builder and purchased by NEDERLAND pursuant to
the Vessel A Contract;

      

      “Vessel A Contract” means the
shipbuilding contract dated 15th June 2007 made between NEDERLAND and the
Builder, which expression shall include all Attachments, Appendixes and Exhibits
thereto as amended and supplemented from time to time with the prior written
consent of the Bank, relating to the construction and sale of Vessel A by the
Builder;

      

      “Vessel A Contract
Installment” means each of the first (1st) second
(2nd), third
(3rd) fourth
(4th) and
fifth (5th)
installment of the Vessel A Contract Price payable by NEDERLAND to the Builder
falling due under the Vessel A Contract;

      

      “Vessel A Contract Price”
means the price payable by NEDERLAND to the Builder for Vessel A pursuant to the
terms of the Vessel A Contract being Dollars Forty Four Million Two Hundred
Thirty Five Thousand ($ 44,235,000.00), or such other sum as is determined in
accordance with the terms and conditions of the Vessel A Contract;

      

      “Vessel A Delivery Date” means
the date upon which Vessel A is delivered by the Builder to and accepted by
NEDERLAND pursuant to the Vessel A Contract;

      

      “Vessel B” means the
Product/Chemical Tanker of approximately 37,000 dwt currently designated as Hull
No. 2193 to be constructed by the Builder and purchased by LAKEVIEW pursuant to
the Vessel B Contract;

      

       “Vessel B Contract”
means the shipbuilding contract dated 15th June
2007 made between LAKEVIEW and the Builder, which expression shall include all
Attachments, Appendixes and Exhibits thereto as amended and supplemented from
time to time with the prior written consent of the Bank, relating to the
construction and sale of Vessel B by the Builder;

      

      “Vessel B Contract
Installment” means each of the first (1st) second
(2nd), third
(3rd) fourth
(4th) and
fifth (5th)
installment of the Vessel B Contract Price payable by LAKEVIEW to the Builder
falling under the Vessel B Contract;

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      “Vessel B Contract Price”
means the price payable by LAKEVIEW to the Builder for Vessel B pursuant to the
terms of the Vessel B Contract being Dollars Forty Four Million Two Hundred
Thirty Five Thousand ($ 44,235,000.00), or such other sum as is determined in
accordance with the terms and conditions of the Vessel B Contract;

      

      “Vessel B Delivery Date” means
the date upon which Vessel B is delivered by the Builder to and accepted by
LAKEVIEW pursuant to the Vessel B Contract;

      

      1.03.01.       each
of the terms defined in Clause 1.02 when used in plural means all of them
collectively and/or each of them and/or anyone of them (even if not expressly so
spelled out) as the context may require or permit;

      

      1.03.02.       subject
to Clause 14, references to each of the parties hereto and to the other Security
Documents shall be deemed to be references to or to include, as appropriate,
their respective successors and permitted assigns;

      

      1.03.03.       Reference
to:

      

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

      

      “bankruptcy” includes a
liquidation, receivership, administration or judicial management and any form of
suspension of payments, arrangement with creditors or reorganisation under any
corporate or insolvency law of any country;

      

      “company” includes any
partnership, joint venture and unincorporated association;

      

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

      

      “law” includes any form of
delegated legislation, any order or decree, any treaty or international
convention and any regulation or resolution of the Council of the European
Union,  the European Commission, the United Nations or its Security
Council;

      

      “liability” includes every kind
of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;

      

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

      

      “person” shall be construed as
including reference to an individual, firm, company, corporation, unincorporated
body of persons or any State or any agency thereof;

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      

      “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;

      

      “regulation” includes any
regulation, rule, official directive, request or guideline whether or not having
the force of law of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or
organization;

      

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

      -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

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

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

      -
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.

      

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

      

      “tax and taxes” includes all present
and future taxes, levies, imposts, duties, fees or charges of relevant nature
together with interest thereon and penalties in respect thereof (except taxes
concerning the Bank and imposed on the net income of the Bank) and “taxation” shall be construed
accordingly.

      

      1.03.04.       in
case of any contradiction between this Agreement and the General Loan Conditions
and/or General Terms of Business of Bremer Landesbank Kreditanstalt Oldenburg
–Girozentrale - , this Agreement shall prevail;

      

      1.03.05.      The
expression “Current Account” shall include such account or any sub-accounts or
call accounts opened from time to time under the same designation and shall
include any substitute account(s) or revised designation or number
whatsoever.

      

      1.04.           Where
the context so admits, words in the singular include the plural and vice
versa.

      

      1.05.           All
documents referred to in this Agreement include the same as varied or
supplemented or amended from time to time.

      

      1.06.           Headings
are for convenience of reference only and are not to be taken into account in
construction.

      

      1.07.           References
to Clauses, Sub-Clauses and Schedules are to Clauses, Sub-Clauses and Schedules
in this Agreement.

      

      1.08.Unless
as otherwise specifically stated in the Agreement, any determination,
requirement, consent, or permission to be made or given by the Bank or the Bank
under the terms of this Agreement, shall be made

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      or
given in the sole discretion of the Bank or the Bank, even if not so
specifically stated.

      

      1.09.All
obligations imposed on, or assumed by the Borrowers hereunder are joint and
several even if not so expressed.

       

      2.           
   THE LOAN

       

      

      The
Bank relying upon each of the representations and warranties set out in Clause
8, agrees subject to the terms of this Agreement to advance by way of a loan to
the Borrowers the Commitment in the principal amount of up to Dollars Fifty Five
Million Two Hundred Fifty Thousand ($ 55,250,000.00) in aggregate, which will be
drawndown in two Tranches as follows:

      

      2.01.01.      Tranche
A which will be made available in five Advances:

      

      
        	
                (a)

              	
                Tranche
      A Advance A in an amount of Dollars Three Million Nine Hundred Seventy
      Eight Thousand ($ 3,978,000.00) to be applied for the repayment to the
      Bank of the Existing Loan;

              

      

      
        	
                (b)

              	
                Tranche
      A Advance B in an amount not exceeding the lesser of Dollars Three Million
      Nine Hundred Seventy Eight Thousand  ($ 3,978,000.00) or ninety
      per cent (90%) of the amount of the second Vessel A Contract Installment
      under the Vessel A Contract, to be applied for the payment to the Builder
      of the second Vessel A Contract Installment  under the Vessel A
      Contract;

              

      

      
        	
                (c)

              	
                Tranche
      A Advance C in an amount not exceeding the lesser of Dollars Seven Million
      Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
      amount of the third Vessel A Contract Installment  under the
      Vessel A Contract, to be applied for the payment to the Builder of the
      third Vessel A Contract Installment under the Vessel A
      Contract;

              

      

      
        	
                (d)

              	
                Tranche
      A Advance D in an amount not exceeding the lesser of Dollars Seven Million
      Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
      amount of the fourth Vessel A Contract Installment  under the
      Vessel A Contract, to be applied for the payment to the Builder of the
      fourth Vessel A Contract Installment under the Vessel A
      Contract;

              

      

      
        	
                (e)

              	
                Tranche
      A Advance E in an amount not exceeding the lesser of Dollars Five Million
      Five Hundred Twenty Five Thousand ($ 5,525,000.00) or sixty two point five
      per cent (62.5%) of the amount of the fifth Vessel A Contract Installment
      under the Vessel A Contract, to be applied for the payment to the Builder
      of the fifth Vessel A Contract Installment  under the Vessel A
      Contract;

              

      

      

      2.01.02.    
  The aggregate amount of Tranche A shall not exceed the lesser of (a)
Dollars Twenty Seven Million Six Hundred Twenty Five Thousand ($ 27,625,000.00)
or (b) seventy eight point one per cent (78.1%) of the aggregate amount of the
Vessel A Contract Installments;

      

      2.02.01.       Tranche
B which will be made available in five Advances:

      

      
        	
                (f)

              	
                Tranche
      B Advance A in an amount of Dollars Three Million Nine Hundred Seventy
      Eight Thousand ($ 3,978,000.00) to be applied for the repayment to the
      Bank of the Existing Loan;

              

      

      
        	
                (g)

              	
                Tranche
      B Advance B in an amount not exceeding the lesser of Dollars Three Million
      Nine Hundred Seventy Eight Thousand  ($ 3,978,000.00) or ninety
      per cent (90%) of the amount of the second Vessel B Contract
      Installment  under the Vessel B Contract, to be applied for the
      payment to the Builder of the second Vessel B Contract
      Installment  under the Vessel B
  Contract;

              

      

      
        	
                (h)

              	
                Tranche
      B Advance C in an amount not exceeding the lesser of Dollars Seven Million
      Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
      amount of the third Vessel B Contract Installment  under the
      Vessel B Contract, to be applied for the payment to the Builder of the
      third Vessel B Contract Installment under the Vessel B
      Contract;

              

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      
        	
                (i)

              	
                Tranche
      B Advance D in an amount not exceeding the lesser of Dollars Seven Million
      Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
      amount of the fourth Vessel B Contract Installment under the Vessel B
      Contract, to be applied for the payment to the Builder of the fourth
      Vessel B Contract Installment under the Vessel B
  Contract;

              

      

      
        	
                (j)

              	
                Tranche
      B Advance E in an amount not exceeding the lesser of Dollars Five Million
      Five Hundred Twenty Five Thousand ($ 5,525,000.00) or sixty two point five
      per cent (62.5%) of the amount of the fifth Vessel B Contract Installment
      under the Vessel B Contract, to be applied for the payment to the Builder
      of the fifth Vessel B Contract Installment under the Vessel B
      Contract;

              

      

      

      2.02.02.       The
aggregate amount of  Tranche B shall not exceed the lesser of (a)
Dollars Twenty Seven Million Six Hundred Twenty Five Thousand ($ 27,625,000.00)
or (b) seventy eight point one per cent (78.1%) of the aggregate amount of the
Vessel B Contract Installments;

      

      2.03.           Subject
to the terms and conditions of this Agreement, each Advance shall be advanced,
as set out in Schedule 2, following receipt by the Bank from the Borrowers of a
Drawdown Notice not later than 10:00 a.m. on the third Banking Day before the
date which shall be a Banking Day, on which each Advance is intended to be
drawn. A Drawdown Notice shall be effective on actual receipt by the
Bank  and once given shall, subject as provided in this Agreement, be
irrevocable;

      

      2.04.           
(Application of
proceeds) Without prejudice to the Borrowers’ obligations under Clause
11.08.01., the Bank shall have no responsibility for the application of the
proceeds of the Loan or any part thereof by the Borrowers.

      

      2.05.            (Cancellation). The Borrowers
shall be entitled to cancel the whole or any undrawn part of the Commitment
under this Agreement upon giving the Bank not less than three (3) Banking Days’
notice in writing to that effect provided that no relevant Drawdown Notice has
been given to the Bank. Any such notice of cancellation, once given, shall be
irrevocable. Any amount cancelled may not be drawn. Notwithstanding any
cancellation pursuant to this Clause 2.07 the Borrowers shall continue to be
liable for any and all amounts due to the Bank under this Agreement including
without limitation any amounts due to the Bank under Clause 13.

      

      2.06.            (Loan Account). All sums
advanced by the Bank to the Borrowers under this Agreement, and all interest
accrued thereon and all other amounts due under this Agreement from time to time
and all repayments and/or payments thereof shall be debited and credited
respectively to a separate loan account in the name of the Borrowers with the
Bank. The Bank may, however, in accordance with its usual practices or for its
accounting needs, maintain more than one account, consolidate or separate them
but all such accounts shall be considered parts of one single loan account
maintained under this Agreement.

      

      2.07.            (Evidence). It is hereby
expressly agreed and admitted by the Borrowers that abstracts or photocopies of
the books of the Bank as well as statements of accounts or certificates signed
by an officer of the Bank shall (save for manifest error) be conclusive and
binding on the Borrowers as to the existence and/or the amount at any time of
the Outstanding Indebtedness, of any amount due under this Agreement, of the
applicable Interest Rate or Default Rate or any other rate provided for or
referred to in this Agreement, the Interest Period,  the payment or
non payment of any amount and the occurrence of any  Event of
Default.

      

      2.08.            (Joint and Several Liability of the
Borrowers)

      

      2.08.01.       the
liability of the Borrowers hereunder shall in all cases, whether so expressed to
be or not, be

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      joint
and several and each representation and warranty and each covenant and agreement
made or given by the Borrowers is made or given by them jointly and
severally;

      

      2.08.02.       the
Bank may at its discretion accept instructions, notices or advices from any of
the Borrowers hereunder and shall ignore any subsequent conflicting
instructions, notices or advices from any other Borrower (unless they may be
deemed at the discretion of the Bank as proper revocation or amendments of
earlier instructions) and may reach any agreement in connection with this
Agreement or any of the other Security Documents with any Borrower which shall
be binding on all the Borrowers;

      

      2.08.03.       no
Borrower shall be exonerated and its liability hereunder shall not be lessened
or impaired by any time, indulgence or relief being given by the Bank to the
other Borrower or any other person by any amendment of or supplement to this
Agreement or any of the other Security Documents or any other document, by
the  taking, variation, compromise, renewal or release of or refusal
or neglect to perfect or enforce any right, remedies or securities against the
other Borrower or any other person or by anything done or omitted which but for
this provision might operate to exonerate such Borrower;

      

      2.08.04.       the
obligations of a Borrower hereunder shall not be affected by any legal
limitation, disability, incapacity or other circumstances relating to the other
Borrower or any other person, whether known or not known to the Bank by any
invalidity in or irregularity or unenforceability of the obligations of the
other Borrower or any other person under this Agreement or any of the other
Security Documents or otherwise or by any change in the constitution of, or any
amalgamation or reconstruction of any other Borrower, the Bank or any other
person; and

      

      2.08.05.       each
Borrower hereby waives all rights such Borrower may have of first requiring the
Bank to proceed against or enforce any right or security, or claim payment from
the other Borrower or any other person.

      

      2.09.            (Non competition of the Borrowers
with the Bank).

      

      2.09.01.      
until all moneys, obligations and liabilities due, owing, or incurred by the
Borrowers to the Bank under this Agreement and the other Security Documents have
been paid or discharged in full, each Borrower agrees not to exercise or enforce
any claims or any rights of subrogation or indemnity or any other right which
otherwise it has against the other Borrower and agrees not to claim any set-off
or counterclaim against the other Borrower or to claim or prove in competition
with the Bank in the event of bankruptcy, insolvency or liquidation of the other
Borrower or have any benefit of or any share in any guarantee or security now or
hereafter held by the Bank;

      

      2.09.02.     
no Borrower has taken or received, and each Borrower undertakes that until all
moneys, obligations and liabilities due, owing or incurred by the Borrowers
under this Agreement and the other Security Documents have been paid in full, it
will not take or receive, any security or lien from the other Borrower in
respect of borrowing as co-borrower jointly and severally liable or for any
liability whatsoever;

      

      2.10.            (Interest to co-borrow). The
Borrowers have an interest in borrowing jointly and severally in that they
belong to the same group of companies under common ownership, and have close
financial cooperation and mutual business assistance.

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

       

      3.            
  INTEREST AND INTEREST PERIODS

       

      

      3.01.           INTEREST
RATE FOR THE LOAN

      

      3.01.01.       (Interest Rate) interest
shall accrue on the Loan at the rate as determined by the Bank to be the
aggregate of (i) the Margin and (ii) LIBOR for the respective Interest Period
and be paid by the Borrowers on each Interest Payment Date.

      

      3.02.           INTEREST
PERIODS

      

      3.02.01.       unless
the Borrowers shall prior to the Drawdown Dates have agreed with the Bank fixed
Interest Period for the respective portion of the Loan, the Borrowers may by
notice received by the Bank not later than 10:00 a.m. (Bremen time) on the
second Banking Day before the beginning of each Interest Period specify whether
such Interest Period shall have a duration of  one (1), or three (3),
or six (6) months, or twelve (12) months at Borrowers’ option (or such other
period up to five years as may be requested by the Borrower and as the Bank, in
its sole discretion may agree).

      

      3.02.02.      (Duration of Interest
Periods) every Interest Period shall, subject to market availability to
be conclusively determined by the Bank, be of the duration
specified  pursuant to this Clause 3.02 but so that:

      

      (a)          
   the initial Interest Periods in respect of  each
Advance will commence on the Drawdown Date of such Advance and each subsequent
Interest Period in respect thereof shall commence on the last day of the
previous Interest Period, provided that in the case of an Interest Period of
more than three (3) months’ duration, such interest shall be payable quarterly,
except for the Deferred Interest;

      

      (b)         
    interest shall be calculated  in respect of
the Loan or part thereof from time to time outstanding as and from the
commencement date of each applicable Interest Period to the last day of each
such Interest Period and shall be paid on the last day of each such Interest
Period, except for the Deferred Interest;

      

      (c)        
     for consolidation purpose, the Bank may require
that the initial Interest Period in respect of each Advance of each Tranche
after the first Advance for such Tranche shall end on the same day as the
current Interest Period of the respective Tranche;

      

      (d)          
   in the event of an Interest Period being fixed for such
duration that a part of the Loan is to be repaid within such Interest Period the
Interest Rate will be fixed as provided in this Agreement for the amount of that
part of the Loan so to be repaid for the period running from the beginning of
such Interest Period to the date upon which the said repayment is to be made,
and the interest will be payable on such date and for the balance of the Loan as
part thereof as the case may be (less the amount to be repaid within such
Interest Period) the interest will be fixed as aforesaid for the agreed period;
and

      

      (e)          
   if the Bank determines that the duration of an Interest Period
in accordance with Clause 3.02 is not readily available, then that Interest
Period shall have such duration as the Bank, in consultation with the Borrowers,
may determine.

      

      (f)           
   in case of failure of the Borrowers to specify the duration of
an Interest Period in accordance with the provisions of Clause
3.02  3.03, such Interest Period shall have a duration of three (3)
months unless another period shall be agreed between the Bank and the Borrowers
provided always that such period (whether of

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      three
(3) months or of different duration) shall comply with this Clause
3.02;

      

      3.02.03.     
(Deferred Interest) the
accrued Deferred Interest for each Tranche will be due and payable by the
Borrowers to the Banks as follows:

      

      
        	
                (a)

              	
                the
      Deferred Interest for Tranche A  on the Vessel A Delivery
      Date;

              

      

      
        	
                (b)

              	
                the
      Deferred Interest for Tranche B  on the Vessel B Delivery
      Date;

              

      

      

      The
Deferred Interest shall constitute a loan
advanced from the Bank to the Borrowers forming part of the Loan, secured by the
Security Documents, and due and payable on the dates provided above. Such loan
shall be (a) of a principal amount equal to the amount of the Deferred Interest,
(b) treated as advanced to the Borrowers at the times of accrual thereof, and
(c) bearing interest at the Interest Rate up and until full
repayment.

      

      3.03.           
(Default Interest) in
case of failure by the Borrowers to pay any sum on its due date for payment
under this Agreement and any of the other Security Documents, the Borrowers
shall pay interest on such sum, excluding on interest, from the due date up to
the date of actual payment (both before and after judgment) at the rate
determined by the Bank pursuant to this Clause 3.03.  Interest at the
Default Rate shall be compounded at such intervals as the Bank shall in its
discretion determine and shall be payable from time to time by the Borrowers to
the Bank on demand.  The rate of interest applicable shall
be  the rate (as determined by the Bank) of two per cent (2%) per
annum, above the rate which is the higher of (i) the Interest Rate
or  (ii) the aggregate of the Margin and the cost to the Bank of
obtaining funds in the amount equal to the amount or amounts unpaid for such
period or periods as determined by the Bank in its absolute discretion and be
conclusively  certified by the Bank save for manifest error. The Bank
reserves all its rights to claim damages from the Borrowers for any other amount
not paid when due.

      

      3.04.            (Notification of Interest).
The Bank shall notify the Borrowers promptly of each Interest Period and of each
Interest Rate determined by the Bank under this Clause 3.

      

      In
case that the Bank fails to notify the Borrowers as above, such failure will not
affect the validity of the determination of the Interest Rate or of any Interest
Period. Each determination of an interest rate, or of any Interest Period made
by the Bank in accordance with Clause 3, shall be final and
conclusive.

       

      4.           
   ALTERNATIVE INTEREST RATES - CURRENCY

       

      4.01.01.     
If and whenever, at any time prior to the commencement of or during any Interest
Period, the Bank shall have determined (which determination shall be conclusive)
(i) that adequate and fair means do not exist for ascertaining LIBOR during said
Interest Period or (ii) that deposits in Dollars are not available to the Bank
in the London Interbank Market in the ordinary course of business in sufficient
amounts for any Interest Period or (iii) that by reason of circumstances
affecting the London Interbank Market generally, it is impracticable for the
Bank to advance the Commitment or fund or continue to fund the Loan during any
Interest Period or (iv) that LIBOR for that Interest Period will not adequately
reflect the cost of funding of the Loan for that Interest Period, the Bank shall
forthwith give notice (a “Determination Notice”)
thereof to the Borrowers. A Determination Notice shall contain particulars of
the relevant circumstances giving rise to its issue.  After the giving
of any Determination Notice any undrawn amount of the Commitment shall not be
borrowed until notice to the contrary is given to the Borrowers by the
Bank.

      

      4.01.02.       During
the period of fifteen (15) days after any Determination Notice has been given by
the

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      Bank
under Clause 4.01.01 the Bank and the Borrowers shall negotiate in good faith
(but without incurring any legal obligations) with a view to arriving at an
acceptable alternative basis (the “Substitute Basis”), for
maintaining the Loan, failing which the Borrowers shall promptly, on first
demand or within the time limit which may be determined by the
Bank,  prepay the Loan together with accrued interest thereon from the
date of the Determination Notice to the date of prepayment (calculated at the
rate of (i) the Margin and (ii) the cost to the Bank of obtaining funds in the
amount equal to the Loan for the respective Interest Period) and all other sums
payable by the Borrowers under the Security Documents, and the Commitment shall
be reduced to zero.  In case the Bank agrees to a Substitute Basis for
funding the Loan the Bank shall certify such Substitute Basis to the
Borrower.  The Substitute Basis may (without limitation) include
alternative interest period(s), alternative currencies or alternative rates of
interest but shall always include the Margin above the cost of funds to the
Bank.  Each Substitute Basis so certified shall be binding upon the
Borrowers and shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as the Bank notifies the
Borrowers that none of the circumstances specified in Clause 4.01.01. continue
to exist whereupon the normal interest rate fixing provisions of this Agreement
shall apply. The Borrowers hereby agree and undertake that upon the occurrence
of such circumstances, they will sign all necessary amendments to this Agreement
and the rest of the Security Documents as required by the Bank.

      

      4.02.In
the event that on running-out of any Interest Period, the Bank (as per the
Bank’s conclusive determination) is not able to fix a corresponding Dollar
amount on acceptable terms to the Bank for lending to the Borrowers as per
conditions of this Agreement, the Bank is entitled (i) to demand the prepayment
of the Outstanding Indebtedness and the Borrowers shall proceed with such
prepayment, or (ii) to disengage themselves from the obligation to provide
a  Dollar financing by granting to the Borrowers a Euro loan as
applicable at such time or a loan in any other currency requested by the
Borrowers and agreed by the Bank at is sole discretion in an equivalent amount
calculated at the official buying rate of exchange prevailing on that
date.  Alternatively, the Borrowers are entitled to effect the
prepayment of the Loan at that date. The Borrowers hereby agree and undertake
that upon the occurrence of such an event, they will sign all necessary
amendments to this Agreement and the rest of the Security Documents, or any new
documents as may be required to give effect to the change of currency of the
finance.

       

      5.      
        REPAYMENT, PREPAYMENT, AND
APPLICATION OF FUNDS

       

      5.01.          REPAYMENT OF THE
LOAN.

      

      5.01.01.       the
Borrowers shall and it is expressly undertaken by the Borrowers to repay the
Loan in full to the Bank together with all interest accrued thereon and unpaid,
the Expenses, and all other moneys payable to the Bank as follows:

      

      (a)          
   Tranche A on the Tranche A Final Maturity Date;

      

      (b)             
Tranche B on the Tranche B Final Maturity Date;

      

      5.02.           (Current
Accounts)

      

      5.02.01.       each
Borrower shall open and maintain with the Bank a Current Account so long as
there is any Outstanding Indebtedness;

      

      5.02.02.      
throughout the Security Period the Borrowers shall procure that by monthly
payments of 1/3 (one

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      third)
of the interest due on the next Interest Payment Date in respect of each Advance
there shall be standing to the credit of the Current Accounts aggregate funds
sufficient to meet the next interest due in respect of each
Advance;

      

      5.02.03.       all
sums from time to time standing to the credit of the Current Accounts shall be
applied by the Bank (and the Borrowers hereby irrevocably authorize the Bank so
to do) first in or towards payment to the Bank of the amount of interest due on
the next Interest Payment Date with respect to each Advance, then towards the
amount of any Expenses due and payable to the Bank;

      

      5.02.04.       the
Borrowers irrevocably authorize and instruct the Bank to apply any amount from
time to time standing to the credit of the Current Accounts in or towards
reduction of the Outstanding Indebtedness that has become due;

      

      5.02.05.       if
at any time the aggregate amounts standing to the credit of the Current Accounts
shall be insufficient to repay any part of the Outstanding Indebtedness when
due, the Borrowers’ obligation to repay the Outstanding Indebtedness under this
Agreement shall not be affected; and

      

      5.02.06.       provided
that all moneys due and payable to the Bank under this Agreement and the other
Security Documents have been paid in full, and there is no breach under the
Agreement,  sums may be  withdrawn by the Borrowers from the
Current Accounts, subject to Clause 5.02.02..

      

      5.03.           (Application of Funds). All
moneys received by the Bank under or pursuant to any of the Security Documents
shall be applied by the Bank in the following manner:

      

      (a)            
 firstly in or towards payment to the Bank of all sums other than principal
or interest which may be due to the Bank under this Agreement and the other
Security Documents or any of them;

      

      (b)             
secondly in or towards payment to the Bank of any arrears of interest, including
default interest due in respect of the Loan or any part thereof;

      

      (c)           
  thirdly in or towards payment to the Bank of interest due at the
time of such payment;

      

      (d)             
fourthly in or towards repayment to the Bank of the Loan;

      

      (e)          
   fifthly in or towards payment to the Bank of any loss suffered by
reason of any such payment in respect of principal not being effected on the
last day of an Interest Period relating to the part of the Loan repaid;
and

      

      (f)              
sixthly the surplus (if any) shall be paid to the Borrowers subject to the terms
of this Agreement.

      

      5.04.          
(Set Off). The Bank
is hereby authorized by the Borrowers without prejudice to any of the Bank’
rights at law, in equity or otherwise, at any time after all or any part of the
Outstanding Indebtedness shall have become due and without notice to the
Borrowers:

      

      (a)           
  to apply any credit balance standing upon any account of the
Borrowers with the Bank and in whatever currency in or towards satisfaction of
any sum due to the Bank from the Borrowers under this Agreement and/or any of
the other Security Documents;

      

      (b)              in
the name of the Borrowers and/or the Bank to do all such acts and execute all
such documents as may

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      be
necessary or expedient to effect such application; and

      

      (c)           
  to combine and/or consolidate all or any accounts in the name of the
Borrowers with the Bank.

      

      For
all or any of the above purposes the Bank is authorized to purchase with the
moneys standing to the credit of any such account or accounts such other
currencies as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given to it by this Clause.

      

      5.05.           (Voluntary Prepayment). The
Borrowers shall have the right, upon giving the Bank not less than ten (10)
Banking Days’ prior notice in writing, to prepay part or all of the Loan in each
case together with all unpaid interest accrued thereon, plus any Break Costs,
plus all other sums of money whatsoever due and owing from the Borrowers to the
Bank hereunder or pursuant to the other Security Documents and all interest
accrued thereon, provided that:

      

      5.05.01.       the
giving of such notice by the Borrowers will irrevocably commit the Borrowers to
prepay such amount as stated in such notice;

      

      5.05.02.       such
prepayment may take place only on the last day of an Interest Period, provided,
however, that if the Borrowers shall request consent to make such prepayment on
another day and the Bank shall accede to such request (it being in the sole
discretion of the Bank to decide whether or not so to do) the Borrowers will pay
in addition to the amount to be prepaid, any sum as may be payable to the Bank
pursuant to Clause 13;

      

      5.05.03.       any
partial prepayment shall be equal to Dollars Five Hundred Thousand ($
500,000.00), or in multiples thereof;

      

      5.06.           (Compulsory Prepayment in case of
Total Loss or sale of a Vessel).

      

      On
a Vessel becoming a Total Loss or suffering damage or being involved in an
incident which in the reasonable opinion of the Bank may result in the Vessel
being subsequently determined to be a Total Loss or a Vessel being sold,
including by novation and/or assignment of the respective Contract after the
Tranche with respect to such Vessel has been drawn down (subject to the prior
consent of the Bank which is not to be unreasonably withheld provided that such
sale, or novation or assignment would result in the full prepayment of all sums
outstanding under or in connection with such Tranche), the Borrowers shall
forthwith prepay such Tranche and all sums outstanding under or in connection
with such Tranche, including without limitation, any Break Costs, in
full.

       

      For
the purposes of this Clause 5.06:

      

      (a)            
 an actual total loss of a Vessel shall be deemed to have occurred at the
actual date and time the Vessel was lost;

      

      (b)             
a constructive total loss shall be deemed to have occurred at the date and time
notice of abandonment of the Vessel is given to the insurers of the Vessel for
the time being (provided a claim for total loss is admitted by such insurers)
or, if such insurers do not admit such a claim, at the date and time at which a
total loss is subsequently adjudged by a competent court of law to have
occurred;

      

      (c)         
    a compromised or arranged total loss shall be deemed to
have occurred on the date on which a binding agreement as to such compromised or
arranged total loss has been entered into by the insurers of the
Vessel;

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      

      (d)             
 requisition for title or other compulsory acquisition of the Vessel shall
be deemed to have occurred on the date upon which the relevant requisition for
title or other compulsory acquisition occurs; and

      

      (e)           
  capture, seizure, detention, arrest, or confiscation of the Vessel
shall be deemed to occur upon the expiry of the period of thirty (30) days after
the date upon which the relevant capture, seizure, detention, arrest or
confiscation occurred.

       

      6.            
  PAYMENTS

       

      6.01.            (Payments). All moneys to be
paid by the Borrowers to the Bank under this Agreement and the other Security
Documents shall be paid to the Bank on their due date in Dollars (and in the
case referred to in Clause 4 of this Agreement in Euro or any other applicable
currency) in immediately available funds.

      

      The
Bank shall have the right to change the place of account for payment, upon eight
(8) Banking Days’ prior written notice to the Borrowers.

       

      6.02.           (Payments on Banking Days).
Any payment or payments due shall be made on a Banking Day. If the due date for
payment falls on a day which is not a Banking Day, the payment or payments due
shall be made on the next Banking Day. If the next Banking Day falls in the next
succeeding calendar month, then payment shall be made in the immediately
preceding Banking Day.

      

      6.03.           (No Withholdings). All
payments to be made by the Borrowers under this Agreement shall be made without
set-off or counterclaim whatsoever, and free and clear of, and without
withholding or deduction for or on account of, any present or future taxes,
charges, levies, imposts, duties or withholdings and any restrictions or
conditions resulting in any charge whatsoever imposed, either now or hereafter,
by any sovereign state or by any political sub-division or taxing authority of
any sovereign state other than taxes from time to time on the net income of the
Bank imposed in the Federal Republic of Germany.

      

      6.04.          (Gross Up). If at any time
any law, regulation, regulatory requirement or requirement of any governmental
authority, monetary agency, central bank or the like compels the Borrowers to
make payment subject to taxes, or any other deduction or withholding, the
Borrowers shall pay to the Bank such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount which would
have been received had payment not been made subject to such taxes deduction or
withholding. The Borrowers shall indemnify the Bank against any losses or costs
incurred by it by reason of any failure of the Borrowers to make any such
deduction or withholding or by reason of any increased payment not being made on
the due date for such payment. The Borrowers shall, not later than thirty (30)
days after each deduction, withholding or payment of any taxes, forward to the
Bank official receipts and any documentary receipts and any other documentary
evidence reasonably required by the Bank in respect of the payment of any taxes.
The obligations of the Borrowers under this provision shall, subject to
applicable law, remain in force notwithstanding the repayment of the Loan and
the payment of all interest due thereon pursuant to the provisions of this
Agreement.

      

      6.05.         
(Computation). All
interest and other payments payable by reference to a rate per annum under this
Agreement shall accrue from day to day and be calculated on the basis of actual
days elapsed on a 360 day year.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      7.           
   FEES

       

      7.01.           For
the purposes of this Agreement:

      

      7.01.01.     
“Arrangement Fee” means
zero point twenty per cent (0.20%) of the amount of the Post Delivery
Commitment, i.e. US$ 132,600.00 less USD 39,780.00 already charged and paid
under the Existing Loan payable on the first Drawdown Date but in nay case not
later than 31st August
2007.

      

      7.01.02.     
 The Borrowers shall pay the Arrangement Fee, even if the Commitment and/or
Post Delivery Commitment is cancelled or this Loan Facility is prepaid and
financed by another bank or not arranged by the Bank;

      

      7.01.03.      “Commitment Fee” means zero
point twenty per cent (0.20%) per annum on the Post Delivery Commitment
remaining undrawn, payable quarterly by the Borrowers starting on the date of
this Agreement, up and until full draw down of the Post Delivery Commitment.
Such Commitment Fee will not be calculated on amounts already drawn by Borrowers
as part of the Commitment under this Agreement.

      

      In
case of cancellation of the Post Delivery Commitment such term (Commitment Fee)
shall mean zero point twenty per cent (0.20%) per annum on the Commitment
remaining undrawn, payable quarterly by the Borrowers starting on the date of
cancellation of the Post Delivery Commitment. Such Commitment Fee will not be
calculated on amounts already drawn under this Agreement.

       

      8.               REPRESENTATIONS
AND WARRANTIES

       

      The
Bank enters into this Agreement in reliance upon the following representations
and warranties made by the Borrowers and it is hereby represented and warranted
by the Borrowers that the following matters are true at the date of this
Agreement, and that they shall remain true so long as there is any Outstanding
Indebtedness:

      

      8.01.           Representations Concerning the
Security Parties:

      

      8.01.01.      (Due Incorporation/Valid
Existence) each Borrower and any other corporate Security Party is
incorporated and duly organised and validly existing and in good standing under
the laws of its respective country of incorporation, with power to own its
property and assets, to carry on its business as the same is now being lawfully
conducted and to purchase, own, finance and operate vessels, or manage vessels
as the case may be, as well as to undertake the obligations which it has
undertaken pursuant to the Security Documents to which it is or is to be a
party;

      

      8.01.02.       (Due Authority) the entry
into and performance of this Agreement and all the other Security Documents to
which it is or is to be a party are within the corporate powers of each Borrower
and any other corporate Security Party and have been duly authorised
by  the Board of Directors and all shareholders and any other
necessary action for the authorization has been undertaken and do not and would
not contravene or result in breach of any applicable law, regulation, rule,
judgment, decree or permit or contractual restriction which does, or may, bind
any one or more of them or their shareholders or their subsidiaries, or the
documents defining the respective constitutions of any of them and do not and
will not result in the creation or imposition of any security interest, lien,
charge, or Encumbrance on any of their assets or those of any of their
subsidiaries in favour of any party other than the Bank;

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

       

      8.01.03.      (No Default/No Litigation)
neither any Borrower nor any other Security Party is in default under any
agreement including, without limitation the respective Contract, to
which  it is a party or by which it may be bound and no litigation,
arbitration, tax claim or administrative proceeding is current or pending or (to
its or its officers’ knowledge) threatened, which, if adversely determined,
would have a materially detrimental effect on the business assets or the
financial condition of any of them;

      

      8.01.04.      (Financial Information) all
information, accounts, statements of financial position, exhibits and reports
furnished by or on behalf of any Security Party to the Bank in connection with
the negotiation and preparation of this Agreement and each of the other Security
Documents are true and accurate in all material respects and are not misleading,
do not omit material facts and all reasonable enquiries have been made to verify
the facts and statements contained therein; there are no other facts the
omission of which would make any fact or statement therein misleading and
accounts and statements of financial position, have been prepared in accordance
with all applicable laws and USGAAP which have been consistently
applied;

      

      8.01.05.      (Financial Condition) the
financial condition of the Borrowers and of any other Security Party has not
suffered any material deterioration since that condition was last disclosed to
the Bank;

      

      8.01.06.      (No Immunity) neither any
Borrower nor any other Security Party nor any of their respective assets is
entitled to immunity on the grounds of sovereignty or otherwise from any legal
action or proceeding (which shall include, without limitation, suit, attachment
prior to judgment, execution or other enforcement);

      

      8.01.07.   
  (Shipping
Company) the Borrowers are shipping companies involved in the owning or
managing of ships engaged in international voyages and earning profits in free
foreign currency;

      

      8.01.08.  
    (Commercial benefit of the Corporate
Guarantor) the giving of the Corporate Guarantee guaranteeing the
obligations of the Borrowers under the Agreement by the Corporate Guarantor, is
to the commercial benefit of the Corporate Guarantor in that the Corporate
Guarantor holds 100% of all the issued and outstanding share capital of the
Borrowers and has close financial cooperation and mutual assistance with the
Borrowers and that by lending its support to the Borrowers through such
agreements it furthers its own business interests within the scope
of  its constitutional documents.

      

      8.02.           Representations Concerning the
Security Documents:

      

      8.02.01.      (Licences/Authorization) all
licences, authorizations, consents or approvals necessary for the execution,
validity, enforceability or admissibility in evidence of the Security Documents
and all other documents executed or to be executed in connection therewith, have
been obtained and complied with by  each Borrower and any other
Security Party as is or will be a party thereto;

      

      8.02.02.      (Perfected Securities) when
duly executed, the Security Documents will create a perfected security interest
in favour of the Bank, with the intended priority, over the assets and revenues
intended to be covered, valid and enforceable against each Borrowers and any
other Security Party as is or will be a party thereto in any Relevant
Jurisdiction;

      

      8.02.03.      (No
Notarization/Filing/Records) save for any registration necessary for any
Security Documents, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any of the
other Security Documents that it or they or any other instrument be notarised,
filed,

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      recorded,
registered or enrolled in any court, public office or elsewhere in any Relevant
Jurisdiction or that any stamp, registration or similar tax or charge be paid on
or in relation to the Agreement or the other Security Documents;

      

      8.02.04.      (No Taxes) no taxes are
imposed by deduction, withholding or otherwise on any payment to be made by any
Security Party under this Agreement and/or any other Security Document or are
imposed on or by virtue of the execution or delivery of this Agreement and/or
any other Security Document or any document or instrument to be executed or
delivered hereunder or thereunder;

      

      8.02.05.      (Validity and Binding Effect)
the Security Documents are  valid and binding and enforceable
against  the Borrowers and any other Security Party, as is or will be
a party thereto, in accordance with their respective terms and conditions, and
there are no other agreements or arrangements which may adversely affect or
conflict with the Security Documents or the security they create;

      

      8.02.06.      (Direct Obligations) the
obligations imposed on the Borrowers and any other Security Party by the
Security Documents do and will constitute direct obligations on
them;  and

      

      8.02.07.      (Valid Choice of Law) the
choice of law agreed to govern this Agreement and/or any other Security Document
and the submission to the non-exclusive jurisdiction of the courts agreed in
each of the Security Documents are or will be, on execution of the respective
Security Documents, valid and binding on the Borrowers and any other Security
Party which is a party thereto.

      

      8.03.          
Representations Concerning the
Vessels:

      

      8.03.01.       The
Borrowers hereby further represent and warrant to the Bank that:

      

      a)              
each Vessel is and will continue being built in full accordance with the terms
and specifications of the respective Contract and with the rules applicable to
vessels of the type and specifications of such Vessel and upon completion will
be classed to the highest standard for such vessels with a classification
society which has been approved by the Bank in writing and such classification
will be free of all requirements, conditions, recommendations or
notations;

      

      b)             
 (No Encumbrances)
neither any Vessel nor any part thereof will be subject to any Encumbrances
other than those which may have been accepted in writing by the
Bank;

      

      c)             
 (Contract Valid)
the copy of each Contract between the Builder and the respective Borrower
delivered to the Bank is a true and complete copy of such document constituting
valid and binding obligations of the parties thereto enforceable in accordance
with its terms and no amendments thereto or variations thereof have been (or
will, without the prior written consent of the Bank, be) agreed nor has any
action been taken by the parties thereto which would in any way render such
document inoperative or unenforceable;

      

      d)               (No Rebates) there are and
there will be no commissions, rebates, premiums or other payments by or to or on
account of any Borrower or, to the knowledge of the Borrowers, any other person
in connection with any Contract, except as may have been disclosed to and
accepted in writing by the Bank; and

      

      8.04.           (Sufficient Funds) The
Borrowers on the date hereof have secured or on the relevant dates will have
secured sufficient funds to cover their obligations under the Contracts and this
Agreement, and in particular their obligation for payment of all sums of money
payable to the Builder by the Borrowers under the Contracts and to the Bank
under this Agreement.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      

      

      8.05.           (No Money
Laundering) The transactions and other arrangements effected or
contemplated by this Agreement and the Security Documents to which a Borrower or
any other Security Party is a party, will not involve or lead to contravention
of any law, official requirement or other regulatory measure or procedure
implemented to combat “money laundering” (as defined in Article 1 of the
Directive (91/308/ECB) of the Council of the European Communities).

      

      8.06.           Representations
Correct:

      

      8.06.01.       At
the time of entering into this Agreement all above representations and
warranties and/or any other information given by the Borrowers and/or the
Corporate Guarantor and/or any other Security Party to the Bank are true and
accurate and will remain so throughout the Security Period and there has not
occurred and/or is continuing any Event of Default or any event which would
constitute an Event of Default with the passage of time or the giving of notice
or both.

       

      9.              
CONDITIONS PRECEDENT AND SUBSEQUENT

       

      9.01.          (Conditions Concerning Corporate
Authorizations) the obligation of the Bank to make the Loan
available  to the Borrowers as provided in Clause 2 shall be subject
to the condition that the Bank shall have received no later than two (2) Banking
Days before the day of this Agreement, the following documents and evidence in
form and substance satisfactory to the Bank:

      

      (a)            
 a duly certified true copy of the Memorandum and Articles of Association,
or the Articles of Incorporation and By-Laws (if any) as the case may be, or of
any other constitutional documents, as the case may be, of each corporate
Security Party together, where appropriate, with certified translations of the
same into English;

      

      (b)             
a recent certificate of incumbency of each corporate Security Party issued by
the appropriate authority and/or at the discretion of the Bank signed by the
secretary or a director of each of them respectively, stating the officers
and/or the directors of each of them;

      

      (c)             
a recent certificate as to shareholding of any corporate Security Party issued
by an appropriate authority or, at the discretion of the Bank , signed by the
secretary or a director of each of them as the case may be, stating respectively
the full names and addresses of the corporate entity or entities beneficially
entitled as shareholders/stockholders of the entire issued and outstanding
shares/stock of each of them;

      

      (d)          
   minutes of meetings of the directors and shareholders of any
corporate Security Party at which there was approved the entry into execution,
delivery and performance of this Agreement, the other Security Documents and any
other documents executed or to be executed pursuant hereto or thereto to which
the relevant corporate Security Party is or is to be a party;

      

      (e)             
evidence of the due authority of any person signing this Agreement, the other
Security Documents and any other documents executed or to be executed pursuant
hereto or thereto on behalf of any corporate person;

      

      (f)            
 evidence that all necessary licenses, consents, permits and authorizations
(including exchange control if applicable) have been obtained by any Security
Party for execution, delivery, validity, enforceability, admissibility in
evidence and the due performance of its respective obligations under or pursuant
to this

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      Agreement
and the other Security Documents;

      

      (g)              in
case that the Bank at its sole discretion has accepted that any shares of any
Security Party may be owned by a corporate shareholder, the conditions set out
in this Clause 9.01.01 exist for such corporate shareholder in relation to its
participation in any meeting of shareholders of any of the Security Parties and
the granting of any security hereunder; and

      

      (h)            
 any other documents or recent certificates or other evidence satisfactory
in the sole discretion of the Bank, which would be required by the Bank in
relation to any corporate Security Party proving that the relevant Security
Party has been properly established, continues to exist validly and to be in
good standing, listing present board of directors and shareholders, that the
execution and performance of the Security Documents have been duly authorized
and generally that the representations in Clause 8 are correct in all
respects.

      

      9.01.02.      (Conditions Concerning the Securities
and Fees) the obligation of the Bank to make available to the Borrowers
the Loan is subject to the further conditions that the Bank shall have received
in form and substance satisfactory to the Bank:

      

      (A)            
Prior to advancing any Advance under Tranche A

      
        	
                (i)

              	
                each
      of the Agreement, the Contract Assignment Consent and Acknowledgement, and
      the Refund Guarantee Consent and Acknowledgement with respect to the
      Vessel A Contract, and the other Security Documents, duly
      executed;

              

      

      
        	
                (ii)

              	
                evidence
      that the Refund Guarantee under Vessel A Contract has been issued in form
      and substance acceptable to the Bank and, if in letter form, received in
      original by the Bank and no default having occurred under such Refund
      Guarantee;

              
	(iii) 	payment
      to the Bank of the fees payable pursuant to Clause
7;

      
        	
                (iv)

              	
                duly
      certified copy of the Vessel A Contract and no default having occurred
      under the Vessel A Contract;

              

      

      
        	
                (v)

              	
                evidence
      that each Current Account has been duly opened and all mandate forms,
      signature cards and authorities duly
delivered;

              

      

      
        	
                (vi)

              	
                evidence
      that all sums payable by NEDERLAND to the Builder under the Vessel A
      Contract have been paid in full, and/or will be available with the Bank
      for payment.

              

      

      

      B.           
  Prior to advancing any Advance under Tranche B

      
        	
                (i)

              	
                each
      of the Contract Assignment Consent and Acknowledgement, and the Refund
      Guarantee Consent and Acknowledgement with respect to the Vessel B
      Contract, and the other Security Documents, duly
  executed;

              

      

      
        	
                (ii)

              	
                evidence
      that the Refund Guarantee under Vessel B Contract has been issued in form
      and substance acceptable to the Bank and, if in letter form, received in
      original by the Bank and no default having occurred under such Refund
      Guarantee;

              

      

      
        	
                (iii)

              	
                duly
      certified copy of the Vessel B Contract and no default having occurred
      under the Vessel B Contract;

              

      

      
        	
                (iv)

              	
                evidence
      that all sums payable by LAKEVIEW to the Builder under the Vessel B
      Contract have been paid in full, and/or will be available with the Bank
      for payment.

              

      

      

      
        	
                C.

              	
                After
      advancing the first Advance under Tranche A or under Tranche
    B

              

      

      

      
        	
                 
      

              	
                each
      of the Contract Assignment Consent and Acknowledgement, and the Refund
      Guarantee Consent and Acknowledgement with respect to the Vessel A
      Contract and Vessel B Contract as the case
  should

              

      

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                be
      received by the Bank not later than fourteen (14)  days after
      the advancing of the first Advance under the relevant
    Tranche.

              

      

      

      9.01.03.      (No Change of Circumstances)
the obligation of the Bank to make the Loan available to the Borrowers is
subject to the further conditions that:

      

      (a)            
 the representations and warranties set out in Clause 8 and in each of the
Security Documents are true and correct on and as of each such time as if each
was made with respect to the facts and circumstances existing at such
time;

      

      (b)            
 no Event of Default shall have occurred and be continuing or would result
from the drawdown; and

      

      (c)             
the Bank shall be satisfied that there has been no change in the ultimate
ownership, management, operations or financial condition of any Security Party
which change might, in the reasonable opinion of the Bank, be detrimental to the
interests of the Bank.

      

      9.01.04.      (General Conditions) the
obligation of the Bank to make available the Loan to the Borrowers is subject to
the further conditions that the Bank shall have received in form and substance
satisfactory to the Bank:

      

      (a)       
      opinions from legal counsel as to all the
matters referred to in  this Agreement and the other Security
Documents and all such aspects of law as the Bank shall deem relevant to this
Agreement and the other Security Documents and any other documents executed
pursuant hereto or thereto and any further legal or other expert opinion as the
Bank at its sole discretion may require; and

      

      (b)           
  confirmation from any agents nominated in this Agreement and elsewhere in
the other Security Documents and accepted by the Bank for the acceptance of any
notice or service of process, that they consent to such nomination.

      

      (c)          
  the duly signed audited financial figures (balance sheets and profit
and loss accounts) prepared in accordance with all applicable laws and USGAAP of
the Corporate Guarantor, and evidence that the Cash Liquidity
Accounts  are credited with the Cash Liquidity;

      

      9.02.       
  (Further documents or
evidence). The Bank may from time to time either prior or following a
Drawdown Date request and the Borrowers shall, within the period specified by
the Bank, deliver to the Bank such further documents certificates, evidence
and/or opinions as the Bank may reasonably ask.

       

      10.          
  SECURITY

       

      As
security for the obligations of the Borrowers under the Loan and for the due and
punctual repayment of   the Outstanding Indebtedness hereunder,
the Borrowers shall provide and shall ensure and procure that the Bank is
provided with the following Security Documents in form and substance
satisfactory to the Bank  at the time specified herein or otherwise as
required by the Bank:

      

      10.01.01.     the
Security Assignment with respect to each Vessel to consist of a first priority
assignment in favour of the Bank of all the rights of each Borrower under the
respective Contract, together with the Contract Assignment Consent and
Acknowledgement, and a first priority assignment in favour of the Bank of all
the rights of each Borrower under the respective Refund Guarantee together with
the Refund Guarantee Assignment Consent and Acknowledgement;

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      

      

      10.01.02.    the
Corporate Guarantee in favour of the Bank by the Corporate Guarantor, to secure
the obligations of the Borrowers to the Bank under this Agreement;

      

      10.01.03.   
a first priority pledge and charge in favour of the Bank executed on each
Current Account;

      

      10.01.03.    any
and all other Security Documents that the Bank may reasonably
require.

      

      10.02.        (Maintenance of Securities).
It is hereby undertaken by the Borrowers that the Security Documents shall both
at the date of execution and delivery thereof and so long as any moneys are due
under this Agreement or thereunder be valid and binding obligations of the
respective Security Parties thereto and rights of the Bank enforceable in
accordance with their respective terms and that the Borrowers will, at their own
expense, execute, sign, perfect and do any and every such further assurance,
document, act, omission or thing as in the opinion of the Bank may be necessary
or desirable for perfecting the security contemplated or constituted by the
Security Documents.

       

      11.           
COVENANTS

       

      It
is hereby undertaken by the Borrowers that, from the date of this Agreement and
so long as any moneys are due and/or owing and/or outstanding under this
Agreement or any of the other Security Documents the Borrowers,
will:

      

      A.             
Information
Covenants

      

      11.01.01.    (Annual Financial Statements)
furnish the Bank upon request, and in any event  latest 180 days after
the end of each fiscal year in form and substance satisfactory to the Bank, with
annual, audited, financial statements of each  Borrower and of the
Corporate Guarantor (including balance sheets with profit and loss account)
after the end of each fiscal year  commencing for the Corporate
Guarantor on the 1st January
2006 and audited by auditors acceptable to the Bank and prepared in accordance
with all applicable laws and USGAAP consistently applied;

      

      11.01.02.    (Financial Information) provide
the Bank at least annually and in any event within two (2) weeks after the
Bank’s request and in form and substance satisfactory to the Bank with
information on the financial condition, cash flow position, commitments and
operations of the corporate Security Parties, such financial details to be
certified by a Director of  each Borrower  and the Corporate
Guarantor or any other relevant Security Party as to their
correctness;

      

      11.01.03.    (Information on the Borrowing of the
Borrowers) promptly inform the Bank of any proposed arrangements whereby
the Borrowers will have an aggregate liability in respect of Borrowed Money
which, will be in excess of $1,000,000.00 (or the equivalent in any other
currency) together with the payment or repayment terms in respect of such
Borrowed Money;

      

      11.01.04.    (Information on Adverse Change or
Default) promptly inform the Bank in writing of any occurrence of which
any Borrower becomes aware which might adversely affect the ability of any
Security Party to perform its respective obligations under this Agreement and/or
any of the other Security Documents and of any default under any Contract or any
Refund Guarantee forthwith upon becoming aware thereof; and

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      

      11.01.05.    (Information on Events concerning any
Vessel) notify the Bank forthwith and in any event within 48 hours after
such event becomes known to any Borrower by fax or e-mail confirmed by letter
all addressed to the Bank of:

      

      (a)           
 any accident to any Vessel or any other event affecting the due and timely
construction of any Vessel;

      

      (b)            
any occurrence resulting in any Vessel becoming or being likely to become a
Total Loss;

      

      (c)            
any requirement or recommendation made by any classification society or by any
competent authority which is not complied with, within any time limit imposed by
such classification society or authority;

      

      (d)     
       the exercise or purported exercise of
any lien on a Vessel and of its release; and

      

      (e)          
  any petition or notice of meeting to consider any resolution to
wind-up  any Borrower, or the Corporate Guarantor, or any other
corporate Security Party, or the Builder, or the Refund Guarantor.

      

      B.            
 Banking
Arrangements

       

      11.02.        
(Banking Operations)
Ensure that whenever possible all banking operations in connection with any
Vessel are carried out through the Bank;

      

      C.          
   Financial
Covenants

      

      11.03.01.    (No Further Indebtedness)
incur no further Indebtedness nor authorize or accept any capital commitments
nor enter into any agreement for payment on deferred terms or hire agreement
without the prior written consent of the Bank,  such consent not to be
unreasonably withheld;

      

      11.03.02.    (No Loans) not make any loans
or loan advances to, or any investments in, any person, firm, corporation, joint
venture or other entity including (without limitation) any loan or advances to
any officer, director, stockholder or employee directly or through the Corporate
Guarantor;

      

      11.03.03. 
  (No Dividends)
upon the happening of a Event of Default, or if an Event of Default will arise
as a result of the payment of any dividend or the making of any other form of
distribution,, not declare or pay any dividends or other distributions upon any
of the issued shares or otherwise dispose of any assets to any of the
shareholders of the Borrowers, and procure and ensure that the Corporate
Guarantor will do likewise;

      

      11.03.04.    (No Payments) except pursuant
to this Agreement and the other Security Documents (or as expressly permitted by
the same) not to pay out any funds to any company or person except in connection
with the administration of the Borrowers, or the construction of the
Vessels;

      

      11.03.05.   (No Borrowing) ensure that
the Borrowers do not enter into any arrangements in respect of Borrowed Money in
an aggregate amount in excess of $1,000,000.00 (or the equivalent in any other
currency) without the prior consent of the Bank and that the other Security
Parties inform the Bank  of their such
arrangements;  and

      

      11.03.06.    (No Guarantees) not issue or
agree to issue any guarantee in favour of any person or legal entity other than
any guarantee in connection with the construction of the Vessels as notified to
the Bank; and

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      

      11.03.07.    (Cash Liquidity) ensure and
procure that the Corporate Guarantor will maintain throughout the Security
Period the Cash Liquidity in the Cash Liquidity Accounts, and provide to the
Bank account statements or any other documents that the Bank may require
evidencing compliance with this covenant; and

      

      11.03.08.    (Corporate Guarantor) ensure
and procure that throughout the Security Period the
percentage of the overall amount of debt of the Corporate Guarantor to the total
capitalization [debt plus equity] must not exceed seventy per cent (70%);
and

      

      11.03.09.    (Post Delivery Finance) enter
into a loan agreement and all other required documentation with the Bank for the
Post Delivery Finance in accordance with the terms of the Term Letter of the
Bank dated 26th June
2007 and accepted by the Corporate Guarantor on behalf of the
Borrowers.

      

      D.            
 Maintenance of Corporate and Business Structure

      

      11.04.01.    (Maintain Business Structure)
not change the nature, organisation and conduct of the business
of  any Borrower and any other Security Party as the case may be, or
carry on any business other than the business carried on at the date of this
Agreement;

      

      11.04.02.    (Maintain Legal Structure)
not alter in any manner any of the documents defining the constitution of any
Borrower or of any other corporate Security Party nor change any Director or
Shareholder of any Borrower or any other Corporate Security Party without the
Bank’s prior written consent;

      

      11.04.03.    (Control) ensure that no
change shall be made in the ownership, control or management of any
Borrower,  or of any Vessel without the prior written consent of the
Bank which is not to be unreasonably withheld. The consent of the Bank is
required prior to any change in the ownership of the Corporate Guarantor which
affects its control;

      

      11.04.04.    (No Merger) not merge or
consolidate with any other company or person without the prior written consent
of the Bank which is not to be unreasonably withheld;

      

      E.            
 No Subordination/Value of
Security

      

      11.05.01.  
 (No Subordination)
ensure that the Indebtedness of the Borrowers to the Bank hereunder will not be
subordinated in priority of payment to any other present or future
Indebtedness;

      

      F.            
 Maintenance of Assets

      

      11.06.01.   
(No Transfer of Assets)
not convey, assign, transfer, sell or otherwise dispose of or deal with any of
their real or personal property, assets including, without limitation, any
Vessel, or rights, whether present or future, including without limitation any
rights under any Contract or Refund Guarantee, without the
Bank’  prior written consent; and

      

      11.06.02.    (No Encumbrance of Assets) not
allow any part of their undertaking, property, assets, including, without
limitation, any Vessel, or rights, whether present or future, including without
limitation any rights under any Contract or Refund Guarantee to be mortgaged,
charged, pledged, used as a lien or otherwise encumbered without the Bank’s
prior written consent;

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

       

      

      G.        
     Covenants Concerning the Vessels

      

      11.07.01.   
(No Change in Contracts)
ensure that each Vessel is constructed in accordance with the terms and
specifications of the respective Contract and with the highest standards and
rules of a classification society acceptable to the Bank for vessels of the type
and specifications of such Vessel, that none of the Contracts will be amended
without the Bank’s prior consent, and provide the Bank on demand with copies of
all documents and evidence in connection with the construction of each
Vessel;

      

      11.07.02.    (Inspection) ensure that the
authorised experts of the Bank is at any time  allowed to inspect the
Vessels at the premises of the Builder at Borrowers’ cost;

      

      11.07.03.    (Evidence of Payment) upon
the Bank’s request, promptly provide the Bank with  evidence of
payment or settlement of all  amounts payable by the Borrowers to the
Builder under the Contracts;

      

      11.07.04.    promptly
pay all moneys due by each Borrower to the Builder under the Contracts, ensuring
that nothing shall be done or omitted to be done with respect to any Contract
which would cause any delay in the construction of any Vessel or any default by
any Borrower;

      

      H.            
Observance of Covenants

      

      11.08.01.    (Use of the Loan) use the
Loan exclusively for the purposes and in the manner specified in this
Agreement;

      

      11.08.02.   (Comply with Covenants) duly
and punctually perform all obligations under this Agreement and the other
Security Documents;

      

      11.08.03.    (Payment of Expenses) pay to
the Bank on demand any and all Expenses incurred by the Bank or any other amount
which is payable by the Borrowers to the Bank under this Agreement the due date
of which is not specified in any other Clause; and

      

      11.08.04.    (Proof of Compliance) upon
request from time to time by the Bank promptly provide such information and
evidence on a quarterly basis to the Bank as the Bank would reasonably require
to demonstrate compliance with the covenants and undertakings set forth in this
Agreement and any other Security Document;

      

      I.            
  Validity of Securities

      

      11.09.01.    (Validity) ensure and procure
that all governmental or other consents required by law and/or any other steps
required for the validity, enforceability and legality of this Agreement and the
other Security Documents are maintained in full force and effect and/or
appropriately taken;

      

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

      

      11.09.03.    (Additional Documents) from
time to time at the request of the Bank promptly execute and deliver to the Bank
or procure the execution and delivery to the Bank of all such documents as the
Bank

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      shall
deem desirable for giving full effect to this Agreement, and for perfecting,
protecting the value of or enforcing any rights or securities granted to the
Bank under any one or more of this Agreement, the other Security Documents and
any other documents executed pursuant hereto or thereto;

      

      J.              
Covenants for the Security Parties

      

      11.10.01.    (Security Parties) ensure and
procure that each of the Security Parties will duly and punctually comply with
the covenants, conditions, undertakings, agreements or obligations on its or his
part contained in any of the Security Documents or shall not in any other way be
in breach of or do or cause to be done any act repudiating or evidencing an
intention to repudiate any of the Security Documents or that there shall not
occur any event which would or would with the passage of time render performance
of any of the Security Documents impossible or unlawful or unenforceable by the
Bank.

      

      K.             
Waiver by the Bank

      

      11.11.01.   
the covenants specified in this Clause are inserted solely for the benefit of
the Bank and may be waived in whole or in part and with or without conditions by
the Bank without prejudicing the right of the Bank to require fulfillment of
such covenants at such time and manner as specified by the Bank.

       

      12.        
   EVENTS OF DEFAULT

       

      

      There
shall be an Event of Default whenever an event occurs described in Clauses 12.01
to 12.08:

      

      12.01.        Default
under any Contract and any Refund Guarantee - Non Performance of
Obligations

      

      12.01.01.    failure
by the Borrowers to pay timely any sum due and payable under any
Contract  to the Builder or to any other party as provided in such
Contract and in this Agreement; or

      

      12.01.02.    an
event of default or breach, or any other event occurs in respect of any Contract
and/or any Refund Guarantee which in the sole discretion of the Bank endangers
or jeopardizes or affects the due completion and delivery of a Vessel to the
respective Borrower, or the Bank’s security under the Security Assignment;
or

      

      12.01.03.    the
validity of a Refund Guarantee or any Contract or of any security provided
thereunder or under this Agreement is contested or questioned by any party or at
the sole discretion of the Bank becomes questionable or doubtful;
or

      

      12.01.04.    failure
by the Borrowers to pay any sum due from the Borrowers to the Bank under this
Agreement and/or any of the other Security Documents when due, or, in the case
of any sum payable on demand, within seven (7) days from such demand;
or

      

      12.01.05.   
any breach by the Borrowers or any other Security Party or failure of the
Borrowers or any other Security Party to observe and perform any covenant, term,
or condition  or any of the obligations or undertakings expressed to
be assumed by the Borrowers under this Agreement and/or any of the other
Security Documents (other than failure to pay any sum when due) and, in respect
of any such breach or failure which in the sole opinion of the Bank is capable
of remedy, such action as the Bank may require shall not have been taken within
seven (7) days of the Bank notifying the Borrowers or any other Security Party
of such required action to remedy the breach or failure; or

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      

      12.01.06.    sale
of a Vessel either directly or by a novation or assignment of the Contract for
such Vessel, or change of a Vessel’s present classification society attending to
construction without the prior written consent of the Bank which is not to be
unreasonably  withheld and without prejudice to Clause 5.06;
or

      

      12.01.07.    failure
by the Borrowers to utilize the Loan for the purposes stated in Clause 1.01 of
this Agreement or failure to provide the Bank with evidence thereof within seven
(7) days from the Bank’s demand; or

      

      12.01.08.   
any claim is made under a Refund Guarantee irrespective of whether or not such
claim has been referred to arbitration pursuant to such Refund Guarantee and of
whether or not there is a claim made under a Contract; or

      

      12.01.09.    a
Contract is terminated or rescinded for any reason whatsoever or is frustrated
or is varied or amended in any manner not permitted by or pursuant to this
Agreement or any other Security Document; or

      

      12.01.10.    any
Refund Guarantee is repudiated, cancelled, rescinded, or otherwise terminated,
other than by return or cancellation of such Refund Guarantee following the
delivery of the respective Vessel to the respective Borrower; or

      

      12.02.        Events
affecting the Borrowers the Builder, and the Refund Guarantor

      

      12.02.01.    any
Borrower or the Builder or the Refund Guarantor is adjudicated or found bankrupt
or insolvent or any order is made by any competent court or resolution passed by
a Borrower or the Builder or the Refund Guarantor or petition presented for the
winding-up or dissolution of a Borrower or the Builder or the Refund Guarantor
or for the appointment of a liquidator, trustee, administrator or conservator of
the whole or any part of the undertakings, assets, rights or revenues of a
Borrower or the Builder or the Refund Guarantor, or a Borrower or the Builder or
the Refund Guarantor suspends or ceases or threatens to suspend or cease to
carry on its business; or

      

      12.02.02.    a
Borrower or the Builder or the Refund Guarantor becomes or is deemed to be
insolvent or suspends payment of its debts or is (or is deemed to be) unable to
or admits inability to pay its debts as they fall due or proposes or enters into
any composition or other arrangement for the benefit of its creditors generally
or proceedings are commenced in relation to a Borrower or the Builder or the
Refund Guarantor under any law, regulation or procedure relating to
reconstruction or readjustment of debts; or

      

      12.02.03.    an
encumbrancer takes possession of or a receiver or similar officer is appointed
on the whole or any part of the undertakings, assets, rights or revenues of a
Borrower or the  Builder or the Refund Guarantor or a distress,
execution, sequestration or other process is levied or enforced upon or sued out
against  the undertakings, assets, rights or revenues of a Borrower or
the  Builder or the Refund Guarantor and is not discharged within
seven (7) days; or

      

      12.02.04.    Legal Process) any judgment or
order made against a Borrower or the Builder or the Refund Guarantor is not
stayed or complied with within seven (7) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is
levied or enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of a Borrower or the  Builder or the Refund
Guarantor and is not discharged within seven (7) days; or

      

      12.02.05.    (Appointment of receivers and
managers) any administrative or other receiver is appointed
over

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      a
Borrower or the Builder or the Refund Guarantor or any part of its assets,
undertakings, rights or revenues or any other steps are taken to enforce any
Encumbrance over all or any part of the assets, undertakings, rights or revenues
of a Borrower or the  Builder or the Refund Guarantor; or

      

      12.02.06.    all
or a material part of the undertakings, assets (including without limitation a
Vessel), rights or revenues of a Borrower or the Builder or the Refund Guarantor
is seized, nationalised, expropriated or compulsorily acquired by or under the
authority of any government;  or

      

      12.02.07.    any
event occurs or proceeding is taken with respect to a Borrower or
the  Builder or the Refund Guarantor in any jurisdiction to which it
is subject which has an effect equivalent or similar to any of the events
mentioned in Clauses  12.02.01 to 12.02.06; or

      

      12.02.08.    a
Borrower or the Builder or the Refund Guarantor suspends or ceases or threatens
to suspend or cease to carry on its business; or

      

      12.02.09.    there
occurs, in the reasonable opinion of the Bank, a materially adverse change in
the financial condition of a Borrower or of any other Security Party, or of the
Refund Guarantor or of the Builder; or

      

      12.02.10.    the
value of any security deteriorates, or any other event occurs or circumstances
arise which, in the opinion of the Bank is likely materially and adversely to
affect either (i) the ability of a Borrower or of the Corporate Guarantor to
perform all or any of its obligations under or otherwise to comply with the
terms of this Agreement and/or any of the other Security Documents, or (ii) the
ability of the Builder or of the Refund Guarantor to perform all or any of its
obligations under or otherwise to comply with the terms of a Contract or a
Refund Guarantee, (iii) the security created by this Agreement and/or any of the
other Security Documents;  or

      

      12.02.11.    there
is any change in the beneficial ownership of the shares in a Borrower, or of the
control of the Corporate Guarantor without the prior written consent of the Bank
which is not to be unreasonably  withheld; or

      

      12.03.       Representations
Incorrect

      

      12.03.01.    any
representation or warranty made or deemed to be made or repeated by or in
respect of a Borrower or of any other Security Party in or pursuant to this
Agreement or any of the other Security Documents or in any notice, certificate
or statement referred to in or delivered under this Agreement or any of the
other Security Documents is or proves to have been incorrect in any material
respect; or

      

      12.04.        Cross
- Default of a Borrower or any other Security Party

      

      12.04.01.    any
Indebtedness of a Borrower or of any other Security Party to the Bank or to any
third party is not paid when due and payable, or the Bank or any creditor of a
Borrower or any other Security Party becomes entitled to declare any such
Indebtedness due and payable prior to the date when it would otherwise have
become due, or any guarantee or indemnity given by a Borrower or any other
Security Party in respect of Indebtedness is not honored when due and called
upon; or

      

      12.05.       
Events Affecting the Security Documents

      

      12.05.01.    this
Agreement or any of the other Security Documents shall at any time and for any
reason become invalid or unenforceable or otherwise cease to remain in full
force and effect, or the priority, validity or enforceability of the Agreement
or any of the other Security Documents at any time and for any

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      reason
is contested by any party thereto (other than the Bank), or such party denies
that it has any, or any further, liability thereunder or it becomes impossible
or unlawful for a Borrower or any other Security Party to fulfill any of its
covenants and obligations contained in this Agreement or any of the other
Security Documents or for the Bank to exercise the rights or any of it vested in
it thereunder or otherwise; or

      

      12.06.        Events
Concerning the Security Parties

      

      12.06.01.    any
Security Party (other than the Borrowers) fails to pay any sum due from it under
this Agreement and/or any of the other Security Documents when due, or, in the
case of any sum payable on demand, within seven (7) Banking Days of demand;
or

      

      12.06.02.    any
Security Party (other than the Borrowers) commits any breach of or fails to
observe any of the covenants, terms, obligations, conditions or undertakings
expressed to be assumed by it under this Agreement and/or any of the other
Security Documents (other than failure to pay any sum when due) and, in respect
of any such breach or failure which in the opinion of the Bank is capable of
remedy, such action as the Bank may require shall not have been taken within
seven (7) days of the Bank notifying the relevant Security Party, of such
required action to remedy the breach or omission; or

      

      12.06.03.    any
representation or warranty made or deemed to be made or repeated by or in
respect of any Security Party (other than the Borrowers) in or pursuant to this
Agreement or any of the other Security Documents or in any notice, certificate
or statement referred to in or delivered under this Agreement or any of the
other Security Documents is or proves to have been incorrect in any material
respect; or

      

      12.06.04.    any
of the Security Parties contests or questions its obligations under any Security
Document; or

      

      12.06.05.    any
of the events referred to in Clause 12.02.01 to 12.02.06 occurs (amended as
appropriate) in relation to any Security Party (other than the Borrowers);
or

      

      12.07.        Events Concerning the
Vessels

      

      12.07.01.    in
contradiction to the rules of proper construction and maintenance the state of a
Vessel deteriorates or appurtenances are removed or construction ceases for more
than 60 days, unless such delay is within the permissible delays under the
respective Contract; or

      

      12.07.02.    alterations
in the construction specifications of a Vessel under the respective Contract are
made by the respective Borrower without the consent of the Bank and in case of
authorised alterations, if inspection by the Bank’ authorised expert is refused
or if the respective Borrower does not furnish receipts or other proof within
fourteen (14) days after demand by the Bank that the costs accrued were duly
paid; or

      

      12.07.03.     any
Vessel suffers damage of more than 40% of  its estimated value, or the
security of the Loan is infringed in a material way in the reasonable opinion of
the Bank; or

      

      12.07.04.    any
Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory lien or
other claim or otherwise taken from the possession of the Builder and the
Builder shall fail to procure the release of the Vessel within a period of seven
(7) days thereafter.

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      

      12.08.        Consequences
of Default

      

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

      

      12.08.01.    by
notice to the Borrowers declare that the obligation of the Bank to make
available or maintain the Loan or any part thereof shall be terminated,
whereupon the  Loan or such relevant part thereof shall be reduced to
zero forthwith; and/or

      

      12.08.02.    by
notice to the Borrowers declare that the Loan and all interest and Fees accrued
and all other sums payable under this Agreement and the other Security Documents
have become due and payable, whereupon the same shall, immediately or in
accordance with the terms of such notice, become due and payable;
and/or

      

      12.08.03.    put
into force and exercise all or any of the rights, powers and remedies possessed
by the Bank under this Agreement and/or under any other Security Document or
otherwise (whether at law, by virtue of any of the Security Documents or
otherwise).

      

      12.09.       (Proof of Default). It is
agreed that (i) the non- payment of moneys on their due date will be proved
conclusively by mere passage of time and (ii) the occurrence of this and any
other Event of Default shall be proved conclusively by a mere written statement
of the Bank (save for manifest error).

       

      13.        
    INDEMNITIES

       

      13.01.         The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) on
demand of the Bank indemnify the Bank, without prejudice to any of the Bank’
other rights under any of the Security Documents, against any loss (excluding
loss of Margin) or expense which the Bank shall certify as sustained or incurred
by it as a consequence of (i) any default in payment by any of the Security
Parties of any sum under any of the Security Documents when due, (ii) the
occurrence of any Event of Default, (iii) any prepayment of the Loan or part
thereof being made under Clauses 5.05 or 15 or any other repayment of the Loan
or part thereof being made otherwise than on the last day of an Interest Period
relating to the part of the Loan prepaid or repaid (iv) any drawdown not being
made for any reason (excluding any default by the Bank) after the relevant
Drawdown Notice has been given, including, in any such case, but not limited to,
any loss or expense sustained or incurred in maintaining or funding the Loan or
any part thereof or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof.

      

      13.02.        The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) pay
to the Bank on demand:

      

      (a)          
  all expenses (including legal, printing and out-of- pocket expenses)
incurred by the Bank in connection with the negotiation, preparation, execution
and perfection of this Agreement and the other Security Documents and of any
amendment or extension of or the granting of any waiver or consent under this
Agreement and/or any of the other Security Documents and/or in connection with
any proposal by the Borrowers to constitute additional security, whether any
such security shall in fact be constituted or not;

      

      (b)         
   all expenses (including legal and out of pocket expenses)
incurred by the Bank in contemplation of, or otherwise in connection with, the
enforcement of, or preservation of any rights under, this Agreement
and/or

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      any
of the other Security Documents, or otherwise in respect of the moneys owing
under this Agreement and/or any of the Security Documents and in general for the
protection of the Bank’ interests;

      

      (c)         
   any and all other Expenses as defined in Clause 1.02;
and

      

      (d)          
  interest at the rate referred to in Clause 3.03 from the date of
demand to the date of payment (as well after as before judgment).

      

      All
expenses payable pursuant to this Clause 13.02 shall be paid together with value
added tax (if any) thereon.

      

      13.03.        The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) pay
any and all stamp, registration and similar taxes or charges (including those
payable by the Bank) imposed by governmental authorities in relation to this
Agreement and the other Security Documents, and shall indemnify the Bank against
any and all liabilities with respect to, or resulting from delay or omission on
the part of the Borrowers to pay such taxes or charges.

      

      13.04.       
(Environmental
Indemnity). The Borrowers shall indemnify the Bank on demand by the Bank
and hold the Bank harmless from and against all costs, expenses, payments,
charges, losses, demands, liabilities, actions, proceedings (whether civil or
criminal), penalties, fines, damages, judgments, orders, sanctions or other
outgoings of whatever nature which may be suffered, incurred or paid by, or made
or asserted against the Bank at any time, whether before or after the repayment
in full of principal and interest under this Agreement, relating to, or arising
directly or indirectly in any manner or for any cause or reason out of any
environmental claim made or asserted against the Bank.

      

      13.05.         (Currency Indemnity) If any
sum due from the Borrowers under any of the Security Documents or any order or
judgment given or made in relation hereto has to be converted from the currency
(the “first currency”) in which the same is payable under the relevant Security
Document or under such order or judgment into another currency (the “second
currency”) for the purpose of (i) making or filing a claim or proof against a
Borrower or any other Security Party, as the case may be, (ii) obtaining an
order or judgment in any court or other tribunal or (iii) enforcing any order or
judgment given or made in relation to any of the Security Documents, the
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to)
indemnify and hold harmless the Bank from and against any loss suffered as a
result of any difference between (a) the rate of exchange used for such purpose
to convert the sum in question from the first currency into the second currency
and (b) the rate or rates of exchange at which the Bank may in the ordinary
course of business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. Any amount due from the Borrowers under this
Clause 13.05 shall be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in respect of any of the
Security Documents, and the term “rate of exchange” includes any premium and
costs of exchange payable in connection with the purchase of the first currency
with the second currency.

      

      13.06.        (Maintenance of the
Indemnities) The indemnities contained in this Clause 13 shall apply
irrespective of any indulgence granted to the Borrowers or any other party from
time to time and shall continue in full force and effect notwithstanding any
payment in favour of the Bank and any sum due from the Borrowers under this
Clause 13 will be due as a separate debt and shall not be affected by judgment
being obtained for any other sums due under any one or more of this Agreement,
the other Security Documents and any other documents executed pursuant hereto or
thereto.

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      

      13.07.        (Communications Indemnity) It
is hereby agreed that:

      

      13.07.01.    the
Bank is hereby authorised by the Borrowers to accept at its sole discretion all
tested or untested communications given by facsimile, e-mail, or otherwise,
regarding any or all of the notices, requests, instructions or other
communications under this Agreement, subject to any restrictions imposed by the
Bank relating to such communications including, without limitation (if the Bank
so asks) the obligation to confirm such communications by letter;

      

      13.07.02.   
the Borrowers shall recognize any and all of the said notices, requests,
instructions or other communications to the Bank as legal, valid and binding,
when these notices, requests, instructions or communications come from the fax
number and/or e-mail address,  number mentioned in Clause 18 or any
other e-mail address or fax number usually used by them or the Corporate
Guarantor;

      

      13.07.03.    the
Borrowers hereby assume full responsibility for the execution of the said
notices, requests, instructions or communications to the Bank and promise and
recognize that the Bank shall not be held responsible for any loss, liability or
expense that may result from such notices, requests, instructions or other
communications. It is hereby undertaken by the Borrowers to indemnify in full
the Bank from and against all actions, proceedings, damages, costs, claims,
demands, expenses and any and all direct and/or indirect losses which the Bank
or any third party may suffer, incur or sustain by reason of the Bank following
such notices, requests, instructions or communications;

      

      13.07.04.    the
Bank shall have the right to ask the Borrowers to furnish any information the
Bank may require to establish the authority of any person purporting to act on
behalf of the Borrowers for these notices, requests, instructions or
communications but the Bank is not obliged to do so. The Bank shall be fully
protected in, and the Bank shall incur no liability to the Borrowers for acting
upon the said notices, requests, instructions or communications which the Bank
in good faith believes to have been given by the Borrowers or by any of their
authorised representative(s);

      

      13.07.05.    it
is undertaken by the Borrowers to safeguard the function and the security of the
electronic and mechanical appliance(s) such as e-mail,  fax (es)
etc.,  and to take adequate precautions to  prevent their
use by any persons not authorized for their use. The Borrowers shall hold the
Bank harmless and indemnified from all claims, losses, damages and expenses
which the Bank may incur by reason of the failure of the Borrowers to comply
with their obligations under this Clause; and

      

      13.07.06.    the
Bank may at any time reasonably refuse to execute the requests and
communications of the Borrowers, or any part thereof given by e-mail or fax or
otherwise, prior to confirmation by letter without incurring any responsibility
for loss, liability or expense arising out of such refusal.

       

      14.          
 ASSIGNMENT AND PARTICIPATION

       

      14.01.        This
Agreement shall be binding upon and inure to the benefit of the Bank and the
Borrowers and their respective successors and assigns.

      

      14.02.       
(Assignment by the
Borrower). The Borrowers and any other Security Party may not assign
and/or transfer any rights and obligations under this Agreement or any of the
other Security Documents or any documents executed pursuant to this Agreement
and/or the other Security Documents without the prior written consent of the
Bank, at its discretion.

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      

      14.03.        (Assignment by the Bank). The
Bank may assign, transfer, or offer participation to other banks or financial
institutions, in whole or in part, or in any manner dispose of all or any of its
rights and/or obligations arising or accruing under this Agreement or any of the
other Security Documents or any documents executed pursuant to this Agreement
and/or the other Security Documents.

      

      14.04.        The
Bank may in order to implement the assignments and/or transfers and/or
participations referred to in Clause 14.03 above, at any time disclose
information with respect to the Borrowers, the other Security Parties or a
Vessel to any potential assignee, transferee or participant.

      

      14.05.        If  Bank
assigns, transfers or in any other manner grants participation in respect of all
or any part of its rights or benefits or transfers all or any of its obligations
as provided in Clause 14.03 the Borrowers undertake, immediately on being
requested to do so by the Bank, to enter into and procure that each Security
Party enters into such documents as may be necessary or desirable to transfer to
the assignee, transferee, or participant all or the relevant part of such Bank’s
interest in the Security Documents and all relevant references in this Agreement
to such Bank shall thereafter be construed as a reference to the Bank and/or its
assignee, transferee or participant to the extent of their respective interests
and, in the case of a transfer or assignment of all or part of the Bank’s
obligations, the Borrowers shall thereafter look only to the assignee,
transferee or participant in respect of that proportion of the Bank’s
obligations under this Agreement assumed by such assignee, transferee or
participant.

      

      14.06.        The
Borrowers shall join in and execute such supplemental or substitute agreements
as may be necessary to enable the Bank to assign and/or transfer and/or grant
participation in respect of its rights and obligations to one or more banks or
financial institutions in a syndicate.

       

      15.    
        CHANGE IN CIRCUMSTANCES –
INCREASED COST

       

      15.01.        The
Bank will not be under any obligation to make available the Loan in whole or in
part or to maintain or fund the Loan, as the case may be, if the Bank shall be
prevented from making available the Loan,  in whole or in part or
maintaining or funding the Loan as the result, directly or indirectly, of any
action, inaction or purported action of any authority, government or
governmental agency or any strike, boycott or blockade or lockout, or any act of
God, civil war or other hostilities or any other event which would constitute
force majeure, and  the Bank may serve written notice on the Borrowers
declaring the Bank’ obligations under this Agreement terminated, whereupon the
same shall terminate forthwith and the Borrowers will immediately repay the Loan
and accrued interest together with all other Outstanding Indebtedness to the
Bank under this Agreement.

      

      15.02.        If,
as a result of (a) the introduction of any change in any law, regulation or
official directive (whether or not having the force of law) or the
interpretation thereof by any governmental authority in any country to the laws
or regulations of which the Bank is subject or by any court of competent
jurisdiction or (b) compliance by the Bank with any request from any applicable
governmental, fiscal or monetary authority (whether or not having the force of
law) or (c) any other set of circumstances affecting the Bank including (without
limitation) those relating to taxation, capital adequacy, liquidity, reserve
assets, cash ratio deposits and special deposits or those resulting from the
implementation of any regulations which shall replace, amend and/or supplement
those set out in the statement of the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled “International Convergence of
Capital Measurement and Capital Structures” or any amendatory or substitute
agreement thereof, or (d) any change in the Bank’s general financial condition
and/or rating:

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      

      

      15.02.01.    the
cost to  Bank of making available the Loan or any part thereof or
maintaining or funding the Loan is increased or an additional cost
on  Bank is imposed; and/or

      

      15.02.02.    the
Bank is subjected to taxes or the basis of taxation (other than taxes or
taxation on the overall net income of the Bank) in respect of any payments to
the Bank under this Agreement or any of the other Security Documents is changed;
and/or

      

      15.02.03.    the
amounts payable or the effective return to the Bank under any of the Security
Documents is reduced; and/or

      

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

      

      15.02.05.    the
Bank is required to make a payment or forgo a return on or calculated by
reference to any amount received or receivable by it under any of the Security
Documents; and/or

      

      15.02.06.    the
Bank is required to incur or sustain a loss (including a loss of future
potential profits) by reason of being obliged to deduct all or part of the Loan
from its capital for regulatory purposes; and/or

      

      15.02.07.    any
reserve or liquidity requirements are imposed, modified or deemed applicable
against assets held by or commitments of deposits in or for the account of, or
loans by or commitments of, the Bank;

      

      then
the Borrowers shall pay to the Bank, from time to time, upon demand, such
additional moneys as the Bank shall specify to be necessary to indemnify the
Bank for any increased cost, reduction in principal or interest receivable or
other foregone return whatsoever and will agree with the Bank the restructuring
of the transaction constituted by this Agreement and the other Security
Documents in a way (as determined at the discretion of the Bank) which will
satisfactorily avoid either the unlawfulness or increased cost to the Bank (as
the case may be) or any adverse effect on the rights, interests and security of
the Bank, without limitation, increase of the Margin.

      

      15.03.        The
Bank will promptly notify the Borrowers of any intention to claim
indemnification pursuant to Clause 15.02 and such notification will certify
conclusively, except for manifest error, the amount of any increased cost or
reduction and the method of calculating the same.

      

      15.04.        A
claim under Clause 15.03 may be made at any time and must be discharged by the
Borrowers within fifteen (15) days of demand.

      

      15.05.        It
shall not be a defense to a claim by the Bank under this Clause 15 that any
increased cost or reduction could have been avoided by the Bank.

      

      15.06.        Any
amount due from the Borrowers under this Clause 15 shall be due as a separate
debt secured by the Security Documents and shall not be affected by judgment
being obtained for any other sums due under or in respect of this
Agreement.

      

      15.07.        If
any additional amounts are required to be paid by the Borrowers to the Bank by
virtue of this Clause 15, the Borrowers shall be entitled, on giving the Bank
not less than fourteen (14) days’ prior notice in writing, to prepay the Loan
(as applicable) and accrued interest thereon, together with all
other

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      Outstanding
Indebtedness, on the next Interest Payment Date  in accordance with
this Agreement. Any such notice, once given, shall be irrevocable.

      

      15.08.        If
any change in or in the interpretation of any applicable law or regulation, by
any government or governmental or regulatory authority or agency, makes it
unlawful for the bank to maintain or give effect to its obligations under this
Agreement, then the Bank on behalf of the Bank may serve written notice on the
Borrowers declaring the Bank’s obligations under this Agreement terminated,
whereupon the same shall terminate forthwith and the Borrowers will immediately
repay the relevant part of the Loan and accrued interest together with all other
Outstanding Indebtedness to the Bank under this Agreement.

       

      16.           
WAIVER AND REMEDIES

       

      16.01.        No
delay or omission by the Bank to exercise any right, remedy or power vested in
it under this Agreement and the other Security Documents or by law shall impair
such right or power, or be construed as a waiver of, or as an acquiescence in
any default by the Borrowers or any other Security Party nor shall any single or
partial exercise by the Bank of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. In
the event of the Bank on any occasion agreeing to waive any such right, remedy
or power, or consenting to any departure from the strict application of the
provisions of this Agreement or of any other Security Document, such waiver
shall not in any way prejudice or affect the powers conferred upon the Bank
under this Agreement and the other Security Documents or the right of the Bank
thereafter to act strictly in accordance with the terms of this Agreement and
the other Security Documents. No modification or waiver by the Bank of any
provision of this Agreement or of any of the other Security Documents nor any
consent by the Bank to any departure therefrom by any Security Party shall be
effective unless the same shall be in writing and then shall only be effective
in the specific case and for the specific purpose for which given. No notice to
or demand on any such party in any such case shall entitle such party to any
other or further notice or demand in similar or other
circumstances.

      

      16.02.        The
rights and remedies of the Bank contained in this Agreement and the other
Security Documents are cumulative and not exclusive of each other nor of any
other rights or remedies conferred by law.

       

      17.           
INVALIDITY OF PROVISIONS

       

      In
the event of any provision contained in any one or more of this Agreement, the
other Security Documents and any other document executed pursuant hereto or
thereto being invalid, illegal or unenforceable in any respect under any
applicable law of any jurisdiction whatsoever such provision shall be
ineffective as to that jurisdiction only without affecting the remaining
provisions hereof or thereof. If, however this event becomes known to the Bank
prior to the making available of the Loan or of any part thereof, the Bank is
entitled at its sole discretion to refuse to proceed with making available the
Loan or any part thereof until this discrepancy is remedied. Where however the
provisions of any such applicable law may be waived they are hereby waived by
the parties hereto to the full extent permitted by that law to the intent that
this Agreement, the other Security Documents and any other documents executed
pursuant hereto or thereto shall be deemed to be valid binding and enforceable
in accordance with their respective terms.

       

      18.   
        NOTICES

       

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

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      

      (a)            
be in writing delivered personally or by first-class prepaid letter (airmail if
available), or subject to Clause 13.07 by e-mail, fax, or shall be served
through a process server;

      

      (b)         
   be deemed to have been received, subject as otherwise provided
in this Agreement or the relevant other Security Documents, in the case of a
telex, at the time of dispatch with confirmed answerback of the addressee
appearing at the beginning and end of the communication, in the case of fax, or
e-mail at the time of dispatch as per transmission report (provided in either
that if the date of dispatch is not a Banking Day in the country of the
addressee it shall be deemed to have been received at the opening of business on
the next such Banking Day), and in the case of a letter when delivered or served
personally, or ten (10) days after it has been put into the post;
and

      

      (c)            
be sent:

      

      (1)             if
to be sent to any Security Party, in care of

      

      OMEGA
NAVIGATION ENTERPRISES, INC.

      24
Kanningos Street

      185
34 Piraeus

      Greece

      Fax.:
(+30210) 4220230

      E-mail:
contact@omeganavigation.com

      Attention:
Mr. Charilaos Loukopoulos

      

      

      (2)           
 if to be sent to the Bank , to

      BREMER  LANDESBANK  KREDITANSTALT  OLDENBURG
- GIROZENTRALE -

      Domshof
26

      28195
Bremen

      G E R M A N
Y

      

      Fax.:
(+49421) 332.3635

      E-mail:
christian.dyballa@bremerlandesbank.de

      Attention:
Mr. Christian Dyballa

      

      or
to such other person, address, e-mail address or fax number as is notified by
the relevant Security Party or the Bank (as the case may be) to the other
parties to this Agreement and, in the case of any such change of address, e-mail
address, or fax number is notified to the Bank, the same shall not become
effective until notice of such change is actually received by the Bank and a
copy of the notice of such change signed by the Bank.

       

      19.           
LAW AND JURISDICTION

       

      19.01.        This
Agreement shall be governed by and construed in accordance with German
Law.

      

      19.02.         For
the exclusive benefit of the Bank the Borrowers hereby irrevocably submits to
the jurisdiction of the First Instance Court of Bremen, Federal Republic of
Germany, provided that nothing contained in this Clause shall limit the right of
the Bank to take any suit, action or proceedings against  the
Borrowers in any other court of competent jurisdiction nor shall the taking of
any suit, action or proceedings against  the

      
        
           

        

        
          39

          
            

          

        

        
           

        

      

      Borrowers
in one or more jurisdictions preclude the taking of any suit, action or
proceedings in any other jurisdiction whether concurrently or not.

      

      19.03.        Mr.
Charilaos Loukopoulos of 24 Kanningos Street, Piraeus, Greece, tel. no.:
(+30210) 4139130 fax no.: (+30210) 4220230 (hereinafter called “the Process
Agent”) is hereby appointed by the Borrowers as agent to accept service on their
behalf of any judicial process and any notice, request, demand or other
communication under this Agreement or any of the other Security
Documents.  In the event that the Process Agent (or any substitute
process agent notified to the Bank in accordance with the foregoing) cannot be
found at the address specified above (or, as the case may be, notified to the
Bank), which will be conclusively proved by a deed of a process server that the
Process Agent was not found at such address, any process, notice, request,
demand or other communication to be sent to the Borrowers or any other Security
Party may be validly effected upon the Public Prosecutor of the First Instance
Court of Piraeus.

      

      19.04.     
   The foregoing shall not limit the right of the Bank to start
proceedings in any other country or to serve process in any other manner
permitted by law. Finally, the Borrowers hereby waives any objections to the
inconvenience of Bremen, Germany, as a forum.

      

      19.05.        
If the Bank decides that any such proceedings should be commenced in any other
country, then the Borrowers hereby waive any objections as to the jurisdiction
or any claim as to the inconvenience of the forum and covenant and undertake to
instruct lawyers in that country to accept service of legal process and not to
contest the validity of such proceedings as far as the jurisdiction of the court
or courts involved is concerned.

       

      20.         
  MISCELLANEOUS

       

      20.01.        (Entire Agreement). The
provisions of this Agreement and the other Security Documents and the documents
executed in connection herewith and therewith represent the entire agreement
between the parties hereto and supersede any and all prior expressions of intent
or understandings of any nature whatsoever. Any alteration or amendment to this
Agreement shall be made only in writing and such written instrument shall be the
only admissible and conclusive evidence of such amendment or
alteration.

      

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

      

      20.02.        (Counterparts). This
Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute but one and the same
instrument.

      

      AS WITNESS the hands of the
duly authorized representatives of the parties hereto the day and year first
before written.

      
        
           

        

        
          40

          
            

          

        

        
           

        

      

      

      
        	
                SIGNED
      AND DELIVERED

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                BREMER
      LANDESBANK KREDITANSTALT

              	
                )

              	 
      
	
                OLDENBURG
      – GIROZENTRALE

              	
                )

              	 
      
	
                by:
      Evangelos Bairactaris

              	
                )

              	 
      
	
                pursuant
      to a Power of Attorney

              	
                )

              	 
      
	
                dated
      the ___ day of  August 2007

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

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

              	 
      	 
      
	
                Witness:

              	 
      	 
      
	
                Name:
      Anna Papanikolaou

              	 
      	 
      
	
                Address:
      130, Kolokotroni street, 185 36 Piraeus, Greece

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
      AND DELIVERED

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                NEDERLAND
      NAVIGATION INC.

              	
                )

              	 
      
	
                by:  Charilaos
      Loukopoulos

              	
                )

              	 
      
	
                pursuant
      to a Power of Attorney

              	
                )

              	 
      
	
                dated
      the _____ day of August 2007

              	
                )

              	 
      
	
                in
      the presence of:

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

              	 
      	 
      
	
                Witness:

              	 
      	 
      
	
                Name:
      Anna Papanikolaou

              	 
      	 
      
	
                Address:
      130, Kolokotroni street, 185 36 Piraeus, Greece

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
      AND DELIVERED

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                LAKEVIEW
      NAVIGATION INC.

              	
                )

              	 
      
	
                by:   Charilaos
      Loukopoulos

              	
                )

              	 
      
	
                pursuant
      to a Power of Attorney

              	
                )

              	 
      
	
                dated
      the ____ day of August 2007

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

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

              	 
      	 
      
	
                Witness:

              	 
      	 
      
	
                Name:
      Anna Papanikolaou

              	 
      	 
      
	
                Address:
      130, Kolokotroni street, 185 36 Piraeus, Greece

              	 
      	 
      

      

      

      

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

       

      Schedule
1

       

      Form
of Drawdown Notice

      

      To
: BREMER  LANDESBANK  KREDITANSTALT  OLDENBURG
– GIROZENTRALE -

      

      Loan
Agreement of up to $ ________________ dated the _______ day of
___________________ 2007 (the “Agreement”)

      

      We
refer to the  Agreement and hereby give you notice that we wish to
draw down Tranche .......... Advance ..............in an amount of $ ........................on .......
......... ................, provided that all conditions precedent as per Clause
9 of the Agreement have been fulfilled.  The funds should be paid to
............................

      

      We
confirm and warrant that:

      

      (a)        no
event or circumstance has occurred and is continuing which constitutes an Event
of Default;

      

      (b)        the
representations and warranties set out in Clause 8 of the  Agreement
are true and correct at the date hereof as if made with respect to the facts and
circumstances existing at such date;

      

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

      

      (d)        there
has been no material adverse change in our financial position and the financial
position of any other Security Party from that described by us to the Bank in
the negotiation of the  Agreement.

      

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

      

      Date:

      

      For
and on behalf of

      [each
Borrower]

      

      

      

      By
: ________________________

      Name:

      Title:

      
 

      

      
        
           

        

        
          42

          
            

          

        

        
           

        

      

      

      Schedule
2

      

      

      TRANCHE
A - VESSEL A

      

      
        	
                 

                Advance
      A

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	 
      	
                 

                 

                $
      3,978,000.00

                 

                 

              	
                 

                               By
      31st
      August2007

                 

              
	
                 

                Advance
      B

                 

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                90%
      of second Vessel A Contract Installment  Tranche

              	
                 

                 

                $
      3,978,000.00

                 

                 

              	
                 

                Within
      6 months after signing of the Vessel A Contract

              
	
                 

                Advance
      C

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                 

                -80%
      of third Vessel A Contract Installment  Tranche

                 

                 

              	
                 

                 

                $
      7,072,000.00

                 

                 

              	
                 

                Within
      5 Banking Days after the starting of the steel cutting of Vessel A
      confirmed in writing by the classification society of Vessel
A

                 

              
	
                 

                Advance
      D

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                 

                -80%
      of fourth Vessel A Contract Installment  Tranche

                 

                 

              	
                 

                 

                $
      7,072,000.00

                 

                 

              	
                 

                Within
      5 Banking Days after laying of the keel of the first section of the Vessel
      A confirmed in writing by the classification society of Vessel
      A

              

      

      
        	
                 

                Advance
      E

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                -62.5%
      of fifth Vessel A Contract Installment  Tranche

              	
                5,525,000.00

              	
                Within
      5 Banking Days after launching of Vessel A confirmed in writing by the
      classification society of Vessel A

              

      

      

      

      

      

      
        
           

        

        
          43

          
            

          

        

        
           

        

      

      TRANCHE
B - VESSEL B

      

      

      

      

      
        	
                 

                Advance
      A

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	 
      	
                 

                 

                $
      3,978,000.00

                 

                 

              	
                    
       By 31st
      August2007

              
	
                 

                Advance
      B

                 

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                -90%
      of second Vessel B Contract Installment  Tranche

              	
                 

                 

                $
      3,978,000.00

                 

                 

              	
                 

                Within
      6 months after signing of the Vessel B Contract

                 

              
	
                 

                Advance
      C

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                 

                -80%
      of third Vessel B Contract Installment  Tranche

                 

                 

              	
                 

                 

                $
      7,072,000.00

                 

                 

              	
                 

                Within
      5 Banking Days after the starting of the steel cutting of Vessel B
      confirmed in writing by the classification society of Vessel
B

                 

              
	
                 

                Advance
      D

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                 

                 

                -80%
      of fourth Vessel B Contract Installment  Tranche

                 

                 

              	
                 

                 

                $
      7,072,000.00

                 

                 

              	
                 

                Within
      5 Banking Days after laying of the keel of the first section of the Vessel
      B confirmed in writing by the classification society of
    Vessel

              
	
                 

                Advance
      E

              	
                 

                Amount
      up to

              	
                 

                Date
      or stage of construction when

                payable

              
	
                -62.5%
      of fifth Vessel B Contract Installment  Tranche

              	
                 

                5,525,000.00

              	
                Within
      5 Banking Days after launching of Vessel B confirmed in writing by the
      classification society of Vessel B

                 

              

      

                                                            

      SK
23286 0002 889269

      
        
           

        

        
          44d889270_ex4-12.htm

    
EXHIBIT 4.12

      

      

      

      Date                                  2007

      

      

      

      

      

      

      TYLER
NAVIGATION INC.

      and

      PASEDENA
NAVIGATION INC.

      as
joint and several Borrowers

      

      

      

      -
and -

      

      

      

      THE
GOVERNOR AND COMPANY OF

      THE
BANK OF SCOTLAND

      as
Lender

      

      

      

      

      

      

      

      

      __________________________________

      

      LOAN
AGREEMENT

      __________________________________

      

      relating
to a loan facility

      of
up to US$70,000,000

      to
part-finance the acquisition of two 37,000 dwt

      product
tankers from Hyundai Mipo Dockyard Co. Ltd., Korea

      

      

      

      

      CONSTANT
& CONSTANT

      2,
Defteras Merarchias

      185
35 Piraeus

      Greece

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      INDEX

      

      
        	
                CLAUSE NO.

              	 
      	
                PAGE
      NO.

              
	 
      	 
      	 
      
	
                1

              	
                INTERPRETATION

              	
                1

              
	 
      	 
      	 
      
	
                2

              	
                FACILITY

              	
                14

              
	 
      	 
      	 
      
	
                3

              	
                DRAWDOWN

              	
                14

              
	 
      	 
      	 
      
	
                4

              	
                INTEREST

              	
                15

              
	 
      	 
      	 
      
	
                5

              	
                INTEREST
      PERIODS

              	
                16

              
	 
      	 
      	 
      
	
                6

              	
                DEFAULT
      INTEREST

              	
                17

              
	 
      	 
      	 
      
	
                7

              	
                REPAYMENT
      AND PREPAYMENT

              	
                18

              
	 
      	 
      	 
      
	
                8

              	
                CONDITIONS
      PRECEDENT

              	
                20

              
	 
      	 
      	 
      
	
                9

              	
                REPRESENTATIONS
      AND WARRANTIES

              	
                21

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                10

              	
                GENERAL
      UNDERTAKINGS

              	
                23

              
	 
      	 
      	 
      
	
                11

              	
                CORPORATE
      UNDERTAKINGS

              	
                26

              
	 
      	 
      	 
      
	
                12

              	
                INSURANCE

              	
                27

              
	 
      	 
      	 
      
	
                13

              	
                SHIP
      COVENANTS

              	
                32

              
	 
      	 
      	 
      
	
                14

              	
                SECURITY
      COVER

              	
                36

              
	 
      	 
      	 
      
	
                15

              	
                PAYMENTS
      AND CALCULATIONS

              	
                37

              
	 
      	 
      	 
      
	
                16

              	
                APPLICATION
      OF RECEIPTS

              	
                38

              
	 
      	 
      	 
      
	
                17

              	
                APPLICATION
      OF EARNINGS

              	
                37

              
	 
      	 
      	 
      
	
                18

              	
                EVENTS
      OF DEFAULT

              	
                40

              
	 
      	 
      	 
      
	
                19

              	
                FEES
      AND EXPENSES

              	
                44

              
	 
      	 
      	 
      
	
                20

              	
                INDEMNITIES

              	
                45

              
	 
      	 
      	 
      
	
                21

              	
                NO
      SET-OFF OR TAX DEDUCTION

              	
                47

              
	 
      	 
      	 
      
	
                22

              	
                ILLEGALITY,
      ETC

              	
                48

              
	 
      	 
      	 
      
	
                23

              	
                INCREASED
      COSTS

              	
                48

              
	 
      	 
      	 
      
	
                24

              	
                SET
      OFF

              	
                49

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      INDEX

      

      
        	
                CLAUSE
      NO.

              	 
      	
                PAGE
      NO.

              

      

      

      
        	
                25

              	
                TRANSFERS
      AND CHANGES IN LENDING OFFICES

              	
                50

              
	 
      	 
      	 
      
	
                26

              	
                VARIATIONS
      AND WAIVERS

              	
                50

              
	 
      	 
      	 
      
	
                27

              	
                NOTICES

              	
                51

              
	 
      	 
      	 
      
	
                28

              	
                JOINT
      AND SEVERAL LIABILITY

              	
                52

              
	 
      	 
      	 
      
	
                29

              	
                SUPPLEMENTAL

              	
                53

              
	 
      	 
      	 
      
	
                30

              	
                LAW
      AND JURISDICTION

              	
                53

              
	 
      	 
      	 
      
	
                SCHEDULE
      1

              	
                DRAWDOWN
      NOTICE

              	
                55

              
	 
      	 
      	 
      
	
                SCHEDULE
      2

              	
                CONDITION
      PRECEDENT DOCUMENTS

              	
                57

              
	 
      	 
      	 
      
	
                SCHEDULE
      3

              	
                AMOUNT
      OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT

              	
                62

              
	 
      	 
      	 
      
	
                SCHEDULE
      4

              	
                MANDATORY
      COSTS

              	
                63

              
	 
      	 
      	 
      
	
                EXECUTION
      PAGE

              	
                65

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        THIS LOAN AGREEMENT is made
on                            2007

      

      

      BETWEEN:

      

      
        	
                (1)

              	
                TYLER NAVIGATION INC.
      and PASEDENA NAVIGATION
      INC., each being a corporation incorporated in the Republic of the
      Marshall Islands and whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as joint
      and several Borrowers;
      and

              

      

       

      
        	
                (2)

              	
                THE GOVERNOR AND COMPANY OF THE
      BANK OF SCOTLAND acting through its office at Pentland House, 8
      Lochside Avenue, Edinburgh EH12 9DJ, Scotland as Lender.

              

      

       

      WHEREAS

      

      
        	
                (A)

              	
                The
      Lender has agreed to make available to the Borrowers a facility of up to
      US$70,000,000 in two Tranches (each in 6 Advances) each in an amount not
      exceeding the lesser of (a) US$35,000,000 and (b) 75% of the Fair Market
      Value of each Ship as at its Delivery Date, for the purpose of
      part-financing the Contract Price of the Ships which are to be constructed
      by the Builder for, and purchased by, the
  Borrowers.

              

      

      

      
        	
                (B)

              	
                The
      Lender may 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.

              

      

      

      IT IS AGREED as
follows:

      

      
        	
                1

              	
                INTERPRETATION

              

      

       

      
        	
                1.1

              	
                Definitions. Subject to
      Clause 1.5, in this Agreement:

              

      

       

      “Accounts
Pledge”  means a deed or deeds of pledge in respect of the
Earnings Accounts and the Retention Account, in such form as the Lender may
approve or require;

      

      
        	
                 
      

              	
                “Advance”  means
      the principal amount of each borrowing by the Borrowers under this
      Agreement;

              

      

      

      
        	
                 
      

              	
                “Approved
      Flag”  means, in relation to a Ship, the Marshall Islands
      flag or such other flag as the Lender may, in its sole and absolute
      discretion, approve as the flag on which a Ship shall be
      registered;

              

      

      

      
        	
                 
      

              	
                “Approved Flag
      State”  means, in relation to a Ship, the Republic of the
      Marshall Islands or any other country in which the Lender may, in relation
      to a Ship, in its sole and absolute discretion, approve that a Ship be
      registered;

              

      

      

      “Approved
Manager”  means, in relation to a Ship, such company which the
Borrowers shall propose as the commercial and technical managers of each Ship
prior to the Delivery Date of each Ship and which shall be acceptable to the
Lender in its sole discretion;

      

      
        	
                 
      

              	
                “Approved Manager’s
      Undertaking”  means, in relation to each Ship, 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 Approved Manager and subordinating the rights of the Approved Manager
      against such Ship and the Borrower which is the owner thereof to the
      rights of the Lender under the Finance Documents, in such form as the
      Lender may approve or require;

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                (a)

              	
                31
      August 2010 (or such later date as the Lender may agree with the
      Borrowers, which agreement shall not be unreasonably withheld in relation
      to any permissible delay under a Shipbuilding Contract);
  or

              

      

       

      
        	
                 
      

              	
                (b)

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

              

      

       

      
        	
                 
      

              	
                “Borrower”  means
      each of Pasedena and Tyler and, in the plural, means all of
      them;

              

      

      

      
        	
                 
      

              	
                “Builder”  means
      Hyundai Mipo Dockyard Co. Ltd., a corporation organised and existing under
      the laws of the Republic of Korea, with its principal office at 1381
      Bangeo-Dong, Dong-Ku, Ulsan, Korea;

              

      

      

      
        	
                 
      

              	
                “Business
      Day”  means a day on which banks are open in London,
      Athens, Piraeus and (in relation to any payment to be made to the Builder)
      Korea, and in respect of a day on which a payment is required to be made
      under a Finance Document, also in New York City
  ;

              

      

      

      
        	
                 
      

              	
                “Commitment”  means
      the sum of up to $70,000,000 as such amount may be reduced, cancelled or
      terminated in accordance with this
Agreement;

              

      

      

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

      

      “Contract
Price”  means, in respect of each Ship, $44,235,000 being the
amount payable by the relevant Borrower pursuant to the Shipbuilding Contract
relating thereto (as the same may be adjusted pursuant to the terms of such
Shipbuilding Contract);

      

      
        	
                 
      

              	
                “Contractual Currency”
      has the meaning given in Clause
20.4;

              

      

      

      
        	
                 
      

              	
                “Corporate
      Guarantee”  means the guarantee to be given by the
      Corporate Guarantor, in such form as the Lender may approve or
      require;

              

      

      

      
        	
                 
      

              	
                “Corporate
      Guarantor”  means Omega Navigation Enterprises, Inc., a
      corporation incorporated in The Republic of the Marshall Islands whose
      registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
      Island, Majuro, Marshall Islands MH
96960;

              

      

      

      
        	
                 
      

              	
                “Deferred
      Interest”  means the interest on the first two Advances
      under each Tranche accruing from the Drawdown Date of each such Advance up
      until the Drawdown Date of the third Advance under each
      Tranche;

              

      

      

      
        	
                 
      

              	
                “Delivery
      Advance”  means, in relation to a Ship, the final Advance
      in respect of each Tranche, the amount of which shall be calculated in
      accordance with Clause 3.2(e);

              

      

      

      
        	
                 
      

              	
                “Delivery
      Date”  means, in relation to a Ship, the date on which
      title to and possession of that Ship is transferred from the Builder to
      the relevant Borrower;

              

      

      

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

       

      
        	
                 
      

              	
                (a)

              	
                it
      is entered into by the Borrowers pursuant to the Master Agreement;
      and

              

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (b)

              	
                its
      purpose is the hedging of the Borrower’s exposure under this Agreement to
      fluctuations in LIBOR arising from the funding of the Loan or any part
      thereof for a period expiring no later than the final Repayment
      Date;

              

      

       

      
        	
                 
      

              	
                “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 an Advance to be made, or (as the context
      requires) the date on which such 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 Borrower owning that
      Ship or the Lender and which arise out of the use or operation of that
      Ship, including (but not limited
to):

              

      

      

      
        	
                 
      

              	
                (a)

              	
                all
      freight, hire and passage moneys, compensation payable to the Borrower
      owning that Ship or the Lender in the event of requisition of that 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
      that Ship;

              

      

       

      
        	
                 
      

              	
                (b)

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

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

      “Earnings Account” means, in
relation to each Ship, the account in the name of the Borrower owning such Ship
with the Lender in Glasgow designated “[name of
Borrower] - Earnings Account”, 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 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;

              

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                “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 or
      either Borrower and/or any operator or manager is at fault or allegedly at
      fault or otherwise liable to any legal or administrative action;
      or

              

      

       

      
        	
                 
      

              	
                (c)

              	
                any
      other incident in which Environmentally Sensitive Material is released
      otherwise than from a Ship and in connection with which a Ship is actually
      or potentially liable to be arrested and/or where either 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;

              

      

      

      
        	
                 
      

              	
                “Fair Market Value”
      means, in respect of each Ship, the market value thereof determined from
      time to time in accordance with Clause
14.4;

              

      

      

      
        	
                 
      

              	
                “Finance
      Documents”  means:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                this
      Agreement;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Corporate Guarantee;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                the
      Pre Delivery Security Assignments;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                the
      Master Agreement;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                the
      Master Agreement Security Deed;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                the
      Mortgages;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                the
      General Assignments;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                the
      Accounts Pledge;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Approved Manager’s Undertakings;
and

              

      

       

      
        	
                 
      

              	
                (j)

              	
                any
      other document (whether creating a Security Interest or not) which is
      executed at any time by any Borrower or the Corporate Guarantor or any
      other person as security for, or to establish any form of subordination or
      priorities arrangement in relation to, any
  amount

              

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      payable
to the Lender under this Agreement or any of the documents referred to in this
definition;

       

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (b)

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

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

      
        	
                 
      

              	
                (d)

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

              

      

       

      
        	
                 
      

              	
                (e)

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

              

      

       

      
        	
                 
      

              	
                (f)

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

              

      

       

      
        	
                 
      

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

              

      

      

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

      

      “Hull 2189”  means
the 37,000 dwt product tanker with Hull No. 2189 which is to be constructed by
the Builder for, and purchased by, Tyler under the Hull 2189 Shipbuilding
Contract;

      

      
        	
                 
      

              	
                “Hull
      2190”  means the 37,000 dwt product tanker with Hull No.
      2190 which is to be constructed by the Builder for, and purchased by,
      Pasedena under the Hull 2190 Shipbuilding
  Contract;

              

      

      

      “Hull 2189 Refund
Guarantee”  means the irrevocable and unconditional guarantee
number M0902-706-LG-00299 dated 21 June 2007 issued by the Refund Guarantor in
favour of Tyler pursuant to the Hull 2189 Shipbuilding Contract;

      

      
        	
                 
      

              	
                “Hull 2190 Refund
      Guarantee”  means the irrevocable and unconditional
      guarantee number M0902-706-LG-00300 dated 21 June 2007 issued by the
      Refund Guarantor in favour of Pasedena pursuant to the Hull 2190
      Shipbuilding Contract;

              

      

      

      
        	
                 
      

              	
                “Hull 2189 Shipbuilding
      Contract”  means the Shipbuilding Contract dated 15 June
      2007 between the Builder and Tyler for the construction by the Builder of
      Hull 2189 and its purchase by Tyler (as supplemented from time to
      time);

              

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                “Hull 2190 Shipbuilding
      Contract”  means the Shipbuilding Contract dated 15 June
      2007 made between the Builder and Pasedena for the construction by the
      Builder of Hull 2190 and its purchase by Pasedena (as supplemented from
      time to time);

              

      

      

      
        	
                 
      

              	
                “Insurances”  means,
      in relation to a Ship:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                all
      policies and contracts of insurance, including entries of such Ship in any
      protection and indemnity or war risks association, which are effected in
      respect of such 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) (as amended by MSC 104 (73)) and A.913(22) (superseding
Resolution A.788(19)), as the same may be amended, supplemented or superseded
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 Facility Security Code adopted by the International
Maritime Organisation (as the same may be amended, supplemented or superseded
from time to time);

      

      “ISSC” means a valid and
current International Ship Security Certificate issued under the ISPS
Code;

      

      “Lender” means:

       

      
        	
                 
      

              	
                (a)

              	
                The
      Governor and Company of the Bank of Scotland, acting through its office at
      Pentland House, 8 Lochside Avenue, Edinburgh EH12 9DJ, Scotland (or though
      another branch notified to the Lender under Clause 25.6) or its direct or
      indirect successor; or

              

      

       

      
        	
                 
      

              	
                (b)

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

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

       “LIBOR”  means, for
an Interest Period:

       

      
        	
                 
      

              	
                (a)

              	
                the
      rate per annum equal to the offered quotation for deposits in Dollars for
      a period equal to, or as near as possible equal to, the relevant Interest
      Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
      (London time) on the second Business Day prior to the commencement of that
      Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
      Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
      on the Telerate Service or such other page as may replace REUTERS BBA Page
      LIBOR 01 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

              

      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                Bankers’
      Association for the purpose of displaying British Bankers’ Association
      Interest Settlement Rates for
  Dollars);  or

              

      

       

      
        	
                 
      

              	
                (b)

              	
                if
      no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
      determined by the Lender to be the arithmetic mean (rounded upwards, if
      necessary, to the nearest one-sixteenth of one per cent.) of the rates per
      annum at which deposits in Dollars are offered to leading banks by other
      leading banks in the London Interbank Market at or about 11.00 a.m.
      (London time) on the second Business Day prior to the commencement of that
      Interest Period for a period equal to that Interest Period and for
      delivery on the first Business Day of
it;

              

      

       

      
        	
                 
      

              	
                “Loan”  means
      the principal amount for the time being outstanding under this
      Agreement;

              

      

      

      
        	
                 
      

              	
                “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 $250,000 or the equivalent in any other
      currency;

              

      

      

      “Mandatory Costs” means the
percentage rate per annum calculated by the Lender in accordance with Schedule
4;

      

      
        	
                 
      

              	
                “Margin”  means,
      in relation to a Tranche:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                from
      the date of this Agreement up to the date of payment of the third
      instalment under each Shipbuilding Contract, one point one two five per
      cent (1.125%) per annum;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                from
      the date of payment of the third instalment under each Shipbuilding
      Contract up to the date of payment of the fifth instalment under each
      Shipbuilding Contract, one point one per cent (1.1%) per
      annum;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                from
      the date of payment of the fifth instalment under each Shipbuilding
      Contract up to the date of payment of the sixth instalment under each
      Shipbuilding Contract, one point zero five per cent (1.05%) per annum;
      and

              

      

      

      
        	
                 
      

              	
                (d)

              	
                from
      the date of delivery of each Ship under each Shipbuilding Contract, zero
      point eight five per cent (0.85%) per
annum;

              

      

      

      “Master
Agreement”  means the master agreement (on the 1992 and/or 2002
ISDA (Multicurrency-Crossborder) form), together with the schedule thereto in
the form agreed, to be signed between the Borrowers and the Lender and includes
all Designated Transactions from time to time entered into (whether by way of
novation or otherwise) and Confirmations from time to time exchanged under such
master agreement;

      

      “Master Agreement Security
Deed”  means the deed to be executed by the Borrowers in favour
of the Lender in respect of all the Borrower’s rights under the Master
Agreement, in such form as the Lender may approve or require;

      

      “Mortgage”  means, in
relation to a Ship, the first preferred or priority ship mortgage in favour of
the Lender on that Ship under the Approved Flag (and deed of covenant collateral
thereto, if applicable), in such form as the Lender may approve or
require;

      

      
        	
                 
      

              	
                “Negotiation Period” has
      the meaning given in Clause
4.7;

              

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                “Pasedena” means Pasedena
      Navigation Inc., a corporation incorporated in the Republic of the
      Marshall Islands, whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH
      96960;

              

      

      

      
        	
                 
      

              	
                “Payment Currency” has
      the meaning given in Clause 20.4;

              

      

      

      
        	
                 
      

              	
                “Permitted Security
      Interests” means:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Security
      Interests created by the Finance
Documents;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                liens
      for unpaid crew’s wages in accordance with usual maritime
      practice;

              

      

       

      
        	
                 
      

              	
                (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 Borrower in good faith
      by appropriate steps) and subject, in the case of liens for repair or
      maintenance, to
Clause 13.13(g);

              

      

       

      
        	
                 
      

              	
                (f)

              	
                any
      Security Interest created in favour of a plaintiff or defendant in any
      action of the court or tribunal before whom such action is brought as
      security for costs and expenses where a Borrower is prosecuting or
      defending such action in good faith by appropriate steps;
    and

              

      

       

      
        	
                 
      

              	
                (g)

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

              

      

       

      
        	
                 
      

              	
                “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

              

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      assistance
were requested by the courts of a country referred to in paragraphs (b) or (c)
above;

       

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “Pre Delivery Security
      Assignment”  means, in relation to a Shipbuilding
      Contract and a Refund Guarantee, an assignment of such Shipbuilding
      Contract and of such Refund Guarantee, in such form as the Lender may
      approve or require;

              

      

      

      “Refund
Guarantee”  means each of the Hull 2189 Refund Guarantee and
the Hull 2190 Refund Guarantee and, in the plural, means all of
them;

      

      
        	
                 
      

              	
                “Refund
      Guarantor”  means Korea Export Import Bank (“KEXIM”) acting through
      its office at 16-1, Yoido-Dong, Yeongdeungpo-Gu, Seoul 150-996,
      Korea;

              

      

      

      
        	
                 
      

              	
                “Relevant Person” has the
      meaning given in Clause 18.7;

              

      

      

      
        	
                 
      

              	
                “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”;

              

      

      

      
        	
                 
      

              	
                “Retention
      Account”  means an account in the name of the Borrowers
      with the Lender in Glasgow designated “Tyler Navigation Inc./Pasedena
      Navigation Inc. - Retention Account”, 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 Retention
      Account for the purposes of this
Agreement;

              

      

      

      
        	
                 
      

              	
                “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 by virtue of the Finance Documents or
      any judgment relating to the Finance Documents; and for this purpose,
      there shall be disregarded any total or partial discharge of these
      liabilities, or variation of their terms, which is effected by, or in
      connection with, any bankruptcy, liquidation, arrangement or other
      procedure under the insolvency laws of any
  country;

              

      

      

      
        	
                 
      

              	
                “Security
      Interest”  means:

              

      

      

      
        	
                 
      

              	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (b)

              	
                the
      rights of the plaintiff under an action in rem in which the
      vessel concerned has been arrested or a writ has been issued or similar
      step taken; and

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

      
        	
                 
      

              	
                “Security
      Party”  means the Corporate Guarantor, the Approved
      Manager and any other person (except the Lender) who, as a surety or
      mortgagor, as a party to any subordination or
  priorities

              

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      arrangement,
or in any similar capacity, executes a document falling within paragraph (i) 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;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                no
      Borrower nor any Security Party has any future or contingent liability
      under Clause 19, 20 or 21 below or any other provision of this Agreement
      or another Finance Document; and

              

      

       

      
        	
                 
      

              	
                (d)

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

              

      

       

      “Ship” means each of Hull 2189
and Hull 2190 and, in the plural, means all of them;

      

      
        	
                 
      

              	
                “Shipbuilding
      Contract”  means each of the Hull 2189 Shipbuilding
      Contract and the Hull 2190 Shipbuilding Contract and, in the plural, means
      all of them;

              

      

      

      “Total Loss”  means,
in relation to a Ship:

       

      
        	
                 
      

              	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (b)

              	
                any
      expropriation, confiscation, requisition or acquisition of a Ship, whether
      for full consideration, a consideration less than her proper value, a
      nominal consideration or without any consideration, which is effected by
      any government or official authority or by any person or persons claiming
      to be or to represent a government or official authority, excluding a
      requisition for hire for a fixed period not exceeding one year without any
      right to an extension;

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

      
        	
                 
      

              	
                (d)

              	
                any
      arrest, capture, seizure or detention of a Ship (including any hijacking
      or theft) unless she is within 30 days redelivered to the full control of
      the Borrower owning such Ship;

              

      

       

      
        	
                 
      

              	
                “Total Loss
      Date”  means, in relation to a
  Ship:

              

      

      

      
        	
                 
      

              	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (b)

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

              

      

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      date of any compromise, arrangement or agreement made by or on behalf of
      the Borrower owning such Ship, with such Ship's insurers in which the
      insurers agree to treat such 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;

              

      

       

      
        	
                 
      

              	
                “Tranche
      A”  means the aggregate of the six Advances to be made
      available by the Lender to the Borrowers to assist Tyler in its
      acquisition of Hull 2189;

              

      

      

      
        	
                 
      

              	
                “Tranche
      B”  means the aggregate of the six Advances to be made
      available by the Lender to the Borrowers to assist Pasedena in its
      acquisition of Hull 2190;

              

      

      

      
        	
                 
      

              	
                “Tranche”  means
      either of Tranche A or Tranche B, and in the plural means all of them;
      and

              

      

      

      
        	
                 
      

              	
                “Tyler” means Tyler
      Navigation Inc., a corporation incorporated in the Republic of the
      Marshall Islands, whose registered office is at Trust Company Complex,
      Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH
      96960.

              

      

      

      
        	
                1.2

              	
                Construction of certain
      terms.  In this
Agreement:

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “company” includes any
      partnership, joint venture and unincorporated
  association;

              

      

      

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

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “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 her insured value being less than the value at which the
      Ship is assessed for the purpose of such
claims;

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “law” includes any form
      of delegated legislation, any order or decree, any treaty or international
      convention and any regulation or resolution of the Council of the European
      Union, the European Commission, the United Nations or its Security
      Council;

              

      

      

      
        	
                 
      

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

              

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      

      

      
        	
                 
      

              	
                “liability” includes
      every kind of debt or liability (present or future, certain or
      contingent), whether incurred as principal or surety or
      otherwise;

              

      

      

      
        	
                 
      

              	
                “months”  shall
      be construed in accordance with Clause
1.3;

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “parent
      company”  has the meaning given in Clause
      1.4;

              

      

      

      
        	
                 
      

              	
                “person”  includes
      any company; any state, political sub-division of a state and local or
      municipal authority; and any international
  organisation;

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

              	
                “protection and indemnity
      risks”  means the usual risks covered by a protection and
      indemnity association managed in London, including pollution risks and the
      proportion (if any) of any sums payable to any other person or persons in
      case of collision which are not recoverable under the hull and machinery
      policies by reason of the incorporation therein 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 the Institute Amended Running Down Clause
      (1/10/71) or any equivalent
provision;

              

      

      

      “regulation” includes any
regulation, rule, official directive, request or guideline (either having the
force of law or 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;

      

      
        	
                 
      

              	
                “subsidiary”  has
      the meaning given in Clause 1.4;

              

      

      

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

      

      
        	
                 
      

              	
                “tax”  includes
      any present or future tax, duty, impost, levy or charge of any kind which
      is imposed by any state, any political sub-division of a state or any
      local or municipal authority (including any such imposed in connection
      with exchange controls), and any connected penalty, interest or fine;
      and

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                1.3

              	
                Meaning of
      “month”.  A period of one or more “months” ends on the
      day in the relevant calendar month numerically corresponding to the day of
      the calendar month on which the period started (“the numerically corresponding
      day”), but:

              

      

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

              	
                on
      the last Business Day in the relevant calendar month, if the period
      started on the last Business Day in a calendar month or if the last
      calendar month of the period has no numerically corresponding
      day;

              

      

       

      and “month” and “monthly” shall be construed
accordingly.

      

      
        	
                1.4

              	
                Meaning of
      “subsidiary”.  A company (S) is a subsidiary of another
      company (P) if:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

              	
                P
      otherwise has the direct or indirect power to ensure that the affairs of S
      are conducted in accordance with the wishes of
  P;

              

      

       

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

      

      
        	
                1.5

              	
                General
      Interpretation.

              

      

       

      
        	
                (a)

              	
                In
      this Agreement:

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        	
                 
      

              	
                (iii)

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

              

      

      

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                References
      in Clause 1.1 to a 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.

              

      

       

      
        	
                (d)

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

              

      

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

       

      
        	
                2

              	
                FACILITY

              

      

       

      
        	
                2.1

              	
                Amount of
      facility.  Subject to the other provisions of this
      Agreement, the Lender shall make available to the Borrowers a loan
      facility of up to $70,000,000 in two Tranches (each in six Advances), each
      in an amount not exceeding the lesser of (a) $35,000,000 and (b) 75% of
      the Fair Market Value of the relevant Ship as at its Delivery
      Date.

              

      

       

      
        	
                2.2

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

              

      

       

      
        	
                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
      amount of the first two Advances in respect of each Tranche shall not
      exceed 90% of the amount of the first and second instalments under each
      Shipbuilding Contract as stated in Schedule 3 hereto, together with
      accrued interest on drawings hereunder up to payment of the third
      instalment under each Shipbuilding
Contract;

              

      

       

      
        	
                (c)

              	
                the
      amount of the third and fourth Advances of each Tranche shall not exceed
      80% of the amount of the third and fourth instalments under each
      Shipbuilding Contract, as stated in Schedule 3
  hereto;

              

      

       

      
        	
                (d)

              	
                the
      amount of the fifth Advance of each Tranche shall not exceed 62.5% of the
      amount of the fifth instalment under each Shipbuilding Contract, as stated
      in Schedule 3 hereto;

              

      

       

      
        	
                (e)

              	
                the
      amount of each Tranche shall not exceed the lesser of (i) $35,000,000 and
      (ii) 75% of the Fair Market Value of the Ship financed by such Tranche
      (calculated as at the Delivery Date of the relevant
  Ship);

              

      

       

      
        	
                (f)

              	
                the
      aggregate amount of the Tranches shall not exceed $70,000,000;
      and

              

      

       

      
        	
                (g)

              	
                the
      Borrowers have complied with the provisions of Clause 8.1 with respect to
      the relevant Advance.

              

      

       

      
        	
                3.3

              	
                Drawdown Notice
      irrevocable.  A Drawdown Notice must be signed by a
      director or other authorised person of each Borrower; and once served, a
      Drawdown Notice cannot be revoked without the prior consent of the
      Lender.

              

      

       

      
        	
                3.4

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

              

      

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      

       

      
        	
                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 the Borrowers
      shall thereupon become indebted, as principal and direct obligor, to the
      Lender in an amount equal to that
Advance.

              

      

       

      
        	
                4

              	
                INTEREST

              

      

       

      
        	
                4.1

              	
                Payment of normal
      interest.  Subject to Clause 4.2 and to the other
      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

              	
                Payment of Deferred
      Interest.  The accrued Deferred Interest for each Tranche
      will be due and payable by the Borrowers to the Lender as
      follows:

              

      

       

      
        	
                (a)

              	
                the
      Deferred Interest for Tranche A on the Delivery Date for Hull 2189;
      and

              

      

       

      
        	
                (b)

              	
                the
      Deferred Interest for Tranche B on the Delivery Date for Hull
      2190.

              

      

       

      The
Deferred Interest shall constitute a loan advanced from the Lender to the
Borrowers forming part of the Loan, secured by the Finance Documents, and due
and payable on the dates provided above. Such loan shall be (a) of a principal
amount equal to the amount of the Deferred Interest, (b) treated as advanced to
the Borrowers at the times of accrual thereof and (c) bearing interest at the
rate of interest provided for hereunder up and until full
repayment.

       

      
        	
                4.3

              	
                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 (i) the applicable Margin, (ii) the Mandatory
      Costs (if any) and (iii) LIBOR for that Interest
  Period.

              

      

       

      
        	
                4.4

              	
                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.

              

      

       

      
        	
                4.5

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

              

      

       

      
        	
                4.6

              	
                Suspension of
      drawdown.  If the Lender's notice under Clause 4.5 is
      served before an Advance is made, the Lender’s obligation to make that
      Advance shall be suspended while the circumstances referred to in the
      Lender's notice continue.

              

      

       

      
        	
                4.7

              	
                Negotiation of alternative rate
      of interest.  If the Lender’s notice under Clause 4.5 is
      served after an Advance or the Loan is made available, 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 4.5 (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 the Advance
      or the Loan during the Interest Period
  concerned.

              

      

       

      
        	
                4.8

              	
                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.

              

      

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      

       

      
        	
                4.9

              	
                Alternative rate of interest in
      absence of agreement.  If an alternative interest rate or
      alternative basis is not agreed within the Negotiation Period, and the
      relevant  circumstances are continuing at the end of the
      Negotiation Period, then the 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 or the Loan plus the
      applicable Margin and the Mandatory Costs (if any); 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.

              

      

       

      
        	
                4.10

              	
                Notice of
      prepayment.  If the Borrowers do not agree with an
      interest rate set by the Lender under Clause 4.9, the Borrowers may give
      the Lender not less than 15 Business Days' notice of their intention to
      prepay the relevant Advance or the Loan at the end of the interest period
      set by the Lender.

              

      

       

      
        	
                4.11

              	
                Prepayment; termination of
      Commitments. A notice under Clause 4.10 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 Loan together with
      accrued interest thereon at the applicable rate plus the applicable Margin
      and the Mandatory Costs (if any).

              

      

       

      
        	
                4.12

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

              

      

       

      
        	
                4.13

              	
                Interest Rate Hedging.
      The Borrowers shall enter into interest rate hedging arrangements pursuant
      to the Master Agreement to fix the interest rate relative to at least 50%
      of the amount of the Loan, following drawdown of the Delivery Advance with
      respect to the last Ship to be delivered. Unless the Lender agrees
      otherwise, any such hedging arrangements shall be from floating rate to
      fixed rate only and shall not (i) exceed the amount of the Loan or (ii)
      extend beyond the final Repayment
Date.

              

      

       

      
        	
                5

              	
                INTEREST
      PERIODS

              

      

       

      
        	
                5.1

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

              

      

       

      
        	
                5.2

              	
                Duration of normal Interest
      Periods.  Subject to Clauses 5.3 and 5.4, each Interest
      Period in respect of each Advance 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; or

              

      

       

      
        	
                (b)

              	
                in
      the case of the first Interest Period applicable to the second and any
      subsequent Advance of each Tranche, a period ending on the last day of the
      then current Interest Period applicable to such Tranche, whereupon all of
      the Advances in respect of such Tranche shall be consolidated and treated
      as a single Advance;

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

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

              

      

       

      
        
           

        

        
          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 in relation to the relevant Tranche shall end on that Repayment
      Date.

              

      

       

      
        	
                5.4

              	
                Non-availability of matching
      deposits for Interest Period selected.  If, after the
      Borrowers have selected an Interest Period longer than 3 months, the
      Lender notifies the Borrowers by 11.00 a.m. (London time) on the second
      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
      duration.

              

      

       

      
        	
                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 6 on any amount
      payable by the Borrowers under any Finance Document which the Lender or
      the other designated payee 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 two per cent. (2%)
above:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                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);

              

      

       

      
        	
                (b)

              	
                the
      aggregate of the Mandatory Costs (if any) and the applicable Margin 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.

              

      

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      

       

      
        	
                6.4

              	
                Notification of interest
      periods and default rates.  The Lender shall promptly
      notify the Borrowers of each interest rate determined by the Lender under
      Clause 6.3 and of each period selected by the Lender 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 (i) the
      last day of the period by reference to which it was determined and (ii)
      the date on which any principal amount in respect of which it is accruing
      is paid.

              

      

       

      
        	
                6.6

              	
                Compounding of default
      interest.  Any such interest which is not paid at the end
      of the period by reference to which it was determined shall thereupon be
      compounded.

              

      

       

      
        	
                7

              	
                REPAYMENT
      AND PREPAYMENT

              

      

       

      
        	
                7.1

              	
                Amount of repayment
      instalments.  The Borrowers shall repay each Tranche by
      forty (40) equal consecutive quarterly instalments of Five hundred and six
      thousand seven hundred and fifty Dollars ($506,750) each and by a balloon
      payment of fourteen million seven hundred and thirty thousand Dollars
      ($14,730,000).

              

      

       

      
        	
                7.2

              	
                Repayment
      Dates.

              

      

       

      
        	
                (a)

              	
                The
      first instalment in respect of Tranche A shall be repaid on the date
      falling three (3) months after the Drawdown Date of the Delivery Advance
      for Hull 2189, each subsequent instalment shall be repaid at three monthly
      intervals thereafter and the balloon payment for Tranche A shall be repaid
      on the date falling on the tenth anniversary of the Drawdown Date for the
      Delivery Advance for Hull 2189.

              

      

       

      
        	
                (b)

              	
                The
      first instalment in respect of Tranche B shall be repaid on the next
      succeeding repayment date for Tranche A following the Drawdown Date of the
      Delivery Advance for Hull 2190, each subsequent instalment shall be repaid
      at three monthly intervals thereafter and the balloon payment for Tranche
      B shall be repaid on the date falling on the tenth anniversary of the
      Drawdown Date for the Delivery Advance for Hull
  2190.

              

      

       

      
        	
                (c)

              	
                If
      the amount of either Tranche drawdown hereunder is less than $35,000,000
      then the amount of the relevant repayment instalments and the amount of
      the balloon payment shall be reduced pro rata by the amount of such
      difference.

              

      

       

      
        	
                7.3

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

              

      

       

      
        	
                7.4

              	
                Voluntary
      prepayment.  Subject to the following conditions, the
      Borrowers may prepay the whole or part of a Tranche on the last day of an
      Interest Period in respect thereof.

              

      

       

      
        	
                7.5

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

              

      

       

      
        	
                (a)

              	
                a
      partial prepayment shall be in the minimum amount of one million Dollars
      ($1,000,000) or a multiple thereof;

              

      

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      

       

      
        	
                (b)

              	
                the
      Lender has received from the Borrowers at least one month’s prior written
      notice specifying the amount to be prepaid and the date on which the
      prepayment is to be made (such date shall be the last day of an Interest
      Period of the relevant Tranche);

              

      

       

      
        	
                (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
      requirement relevant to this Agreement which affects any Borrower or any
      Security Party has been complied
with.

              

      

       

      
        	
                7.6

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

              

      

       

      
        	
                7.7

              	
                Mandatory
      prepayment.  The Borrowers shall be obliged to cancel the
      relevant portion of the Commitment and/or to prepay the relevant portion
      of the Loan specified in Clause
7.8:

              

      

       

      
        	
                (a)

              	
                if
      a Ship is sold (which sale shall be subject to the prior written consent
      of the Lender) or becomes a Total
Loss:

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                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;

              

      

       

      
        	
                (b)

              	
                if
      any of the following occurs, on demand by the
  Lender:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                any
      of the events specified in Article XI of a Shipbuilding Contract or any
      other default by a Borrower or the Builder under any Shipbuilding
      Contract, giving a right of rescission or termination of the Shipbuilding
      Contract either to the relevant Borrower and/or the
    Builder;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      Shipbuilding Contract or any Refund Guarantee is cancelled, terminated,
      rescinded or suspended or otherwise ceases to remain in force for any
      reason (other than by way of expiry in accordance with its terms);
      or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      Shipbuilding Contract is materially amended or varied without the prior
      written consent of the Lender, except for any such amendment or variation
      as is permitted by this Agreement or any other relevant Finance Document;
      or

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                any
      Ship has not for any reason been delivered to and accepted by the relevant
      Borrower under the relevant Shipbuilding Contract by the date falling 210
      days after the applicable scheduled Delivery Date referred to in Article
      VII of each Shipbuilding Contract,

              

      

       

      together
with (if, following a prepayment under this Clause 7.7, the Borrowers would be
required to make a prepayment (or provide additional security) under Clause
14.1) the amount of any such prepayment due under Clause 14.1.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      

      
        	
                7.8

              	
                Amount of Mandatory
      Prepayment. The relevant portion of the Commitment to be cancelled
      and the relevant portion of the Loan to be prepaid in the circumstances
      contemplated in Clause 7.7 is:

              

      

       

      
        	
                (a)

              	
                if
      paragraph (a) of Clause 7.7
applies:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                if
      prior to the delivery of a Ship, the Advances made in relation to such
      Ship shall be prepaid in full and the undrawn Advances for such Ship shall
      be cancelled; and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                if
      after delivery of a Ship, the Tranche relating to such Ship shall be
      prepaid in full;

              

      

       

      
        	
                (b)

              	
                if
      paragraph (b) of Clause 7.7 applies, the Advances made in relation to such
      Ship shall be prepaid in full and the undrawn Advances for such Ship shall
      be cancelled.

              

      

       

      
        	
                7.9

              	
                Amounts payable on
      prepayment.  A prepayment shall be made together with
      accrued interest (and any other amount payable under 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 relating to the relevant
      Tranche, together with any sums payable under Clause 20.1(b) but without
      premium or penalty.

              

      

       

      
        	
                7.10

              	
                Application of partial
      prepayment.  Each partial prepayment made pursuant to
      Clause 7.4 or any other provisions of this Agreement, shall be applied pro
      rata against the repayment instalments (including the balloon payment)
      specified in Clause 7.1.

              

      

       

      
        	
                7.11

              	
                No
      reborrowing.  Other than in respect of repayments of
      Deferred Interest pursuant to Clause 4.2, no amount prepaid or repaid may
      be reborrowed.

              

      

       

      
        	
                7.12

              	
                Unwinding of Designated
      Transactions.  On or prior to any repayment, cancellation
      or prepayment under this Clause 7 or any other provision of this
      Agreement, the Borrowers shall either (a) provide such additional security
      to the Lender in respect of continuing Designated Transactions as shall be
      acceptable to the Lender in its sole and absolute discretion or (b)
      reverse, offset, unwind or otherwise terminate wholly or partially the
      continuing Designated Transactions so that the notional principal amount
      of the continuing Designated Transactions thereafter remaining does not
      and will not in the future (taking into account the scheduled
      amortisation) exceed the aggregate amount of the Loan as reducing from
      time to time thereafter pursuant to Clause
7.1.

              

      

       

      
        	
                8

              	
                CONDITIONS
      PRECEDENT

              

      

       

      
        	
                8.1

              	
                Documents, fees and no
      default.  The Lender's obligation to contribute to an
      Advance is, in addition to the conditions set out in Clause 3.2, subject
      to the following conditions
precedent:

              

      

       

      
        	
                (a)

              	
                that,
      on or before the date of signing of this Agreement, the Lender receives
      the documents described in Part A of Schedule 2 in form and substance
      satisfactory to the Lender and its
lawyers;

              

      

       

      
        	
                (b)

              	
                that,
      on or before the Drawdown Date of the first Advance of each Tranche, the
      Lender receives the documents described in Part B of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        	
                (c)

              	
                that,
      on or before the Drawdown Date of the second Advance of each Tranche, the
      Lender receives the documents described in Part C of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      

       

      
        	
                (d)

              	
                that,
      on or before the Drawdown Date of the third Advance of each Tranche, the
      Lender receives the documents described in Part D of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        	
                (e)

              	
                that,
      on or before the Drawdown Date of the fourth Advance of each Tranche, the
      Lender receives the documents described in Part E of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        	
                (f)

              	
                that,
      on or before the Drawdown Date of the fifth Advance of each Tranche, the
      Lender receives the documents described in Part F of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        	
                (g)

              	
                that,
      on or before the Drawdown Date of the Delivery Advance of each Tranche,
      the Lender receives the documents described in Part G of Schedule 2 in
      relation to the relevant Ship, in form and substance satisfactory to the
      Lender and its lawyers;

              

      

       

      
        	
                (h)

              	
                that,
      on or before the service of the first Drawdown Notice in respect of each
      Tranche, the Lender receives any fees payable pursuant to Clause 19.1 and
      has received payment of the expenses referred to in Clause
      19.2;

              

      

       

      
        	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      representations and warranties in Clause 9 and those of the Borrowers 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;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                none
      of the circumstances contemplated by Clause 4.5 has occurred and is
      continuing;

              

      

       

      
        	
                (j)

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

              

      

       

      
        	
                (k)

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

              

      

       

      
        	
                8.2

              	
                Waiver 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 relevant Drawdown Date (or
      such longer period as the Lender may
specify).

              

      

       

      
        	
                9

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

       

      
        	
                9.1

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

              

      

       

      
        	
                9.2

              	
                Status.  Each
      Borrower is duly incorporated and validly existing and in good standing
      under the laws of the Republic of the Marshall
  Islands.

              

      

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      

       

      
        	
                9.3

              	
                Share capital and
      ownership.  Each Borrower has an authorised share capital
      divided into 500 registered shares with a par value of $0.01 each, all of
      which shares have been issued fully
paid.

              

      

       

      
        	
                9.4

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

              

      

       

      
        	
                (a)

              	
                to
      execute the Shipbuilding Contract to which it is a party, to purchase and
      pay for the relevant Ship under the relevant Shipbuilding Contract and
      register such Ship in its name under the Approved
  Flag;

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                to
      borrow under this 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 10.4
      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 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 the Loan, 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.

              

      

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      

       

      
        	
                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.

              

      

       

      
        	
                9.11

              	
                Information.  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; all audited
      and unaudited accounts which have been so provided satisfied the
      requirements of Clause 10.7; and there has been no material adverse change
      in the financial position or state of affairs of any of the Borrowers 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.

              

      

       

      
        	
                9.13

              	
                Validity and completeness of
      Shipbuilding Contracts/Refund
Guarantees.

              

      

       

      
        	
                (a)

              	
                The
      copies of the Shipbuilding Contracts delivered to the Lender before the
      date of this Agreement are true and complete
  copies;

              

      

       

      
        	
                (b)

              	
                each
      Shipbuilding Contract constitutes valid, binding and enforceable
      obligations of the Builder and the relevant Borrower respectively in
      accordance with its terms and each Refund Guarantee constitutes valid,
      binding and enforceable obligations of the Refund Guarantor in accordance
      with its terms; and

              

      

       

      
        	
                (c)

              	
                no
      amendments or additions to any of the Shipbuilding Contracts or any of the
      Refund Guarantees have been agreed (other than as disclosed to the Lender
      prior to the date of this Agreement) nor have the Borrowers or the Builder
      or the Refund Guarantor waived any of their respective rights under the
      Shipbuilding Contracts and Refund
Guarantees.

              

      

       

      
        	
                9.14

              	
                No rebates
      etc.  There is no agreement or understanding to allow or
      pay any rebate, premium, commission, discount or other benefit or payment
      (howsoever described) to the Borrowers, the Builder or a third party in
      connection with the purchase by each Borrower of the Ship owned by it,
      other than as disclosed to the Lender in writing on or prior to the date
      of this Agreement.

              

      

       

      
        	
                9.15

              	
                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.

              

      

       

      
        	
                9.16

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

              

      

       

      
        	
                9.17

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

              

      

       

      
        	
                9.18

              	
                No Money
      Laundering.  Without prejudice to the generality of
      Clause 2.3, in relation to the borrowing by each of the Borrowers of the
      Loan, the performance and discharge of their respective obligations and
      liabilities under the Finance Documents, and the transactions and other
      arrangements effected or contemplated by the Finance Documents to which
      each of the Borrowers is a party, each of the Borrowers confirms that (i)
      it is acting for its own account, (ii) that it will use the proceeds of
      the Loan for its own benefit, under its full responsibility
      and

              

      

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      exclusively
for the purposes specified in this Agreement and (iii) that the foregoing will
not involve or lead to contravention of any law, official requirements or other
regulatory measure or procedure implemented to combat “money laundering” (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities).

       

      
        	
                10

              	
                GENERAL
      UNDERTAKINGS

              

      

       

      
        	
                10.1

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

              

      

       

      
        	
                10.2

              	
                Title; negative
      pledge.  Each Borrower
will:

              

      

       

      
        	
                (a)

              	
                hold
      the legal title to, and own the entire beneficial interest in the Ship
      owned by it, the 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 except for Permitted Security Interests;
      and

              

      

       

      
        	
                (b)

              	
                not
      create or permit to arise any Security Interest (except for Permitted
      Security Interests) over any other asset, present or
    future.

              

      

       

      
        	
                10.3

              	
                No disposal of
      assets.  No Borrower will transfer, lease or otherwise
      dispose of:

              

      

       

      
        	
                (a)

              	
                all
      or a substantial part of its assets, whether by one transaction or a
      number of transactions, whether related or not (other than, in the case of
      sale of a Ship, pursuant to the provisions of Clauses 7.7 and 7.8);
      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, unless in the ordinary course of business or to the extent
      that the same would not have a material adverse effect on the financial
      position of such Borrower.

              

      

       

      
        	
                10.4

              	
                No other liabilities or
      obligations to be incurred.  No Borrower will incur any
      liability or obligation except (i) liabilities and obligations under the
      Shipbuilding Contract and the Finance Documents to which it is a party,
      (ii)  any funds borrowed from any shareholders of a Borrower,
      which funds shall only be borrowed with the prior written consent of the
      Lender and shall be fully subordinated on terms acceptable to the Lender
      and (iii) liabilities or obligations incurred in the ordinary course of
      its business of operating and chartering the Ship owned by
    it.

              

      

       

      
        	
                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.  Each Borrower will send to the
      Lender:

              

      

       

      
        	
                (a)

              	
                as
      soon as possible, but in no event later than 120 days after the end of
      each financial year of each Borrower, the annual audited accounts for such
      financial year of each Borrower, duly certified by an international firm
      of accountants acceptable to the
Lender;

              

      

       

      
        	
                (b)

              	
                as
      soon as possible, but in no event later than 45 days after the end of each
      of the three-month periods during each financial year of each Borrower,
      the quarterly management accounts of each Borrower, certified as to their
      correctness by the finance director of the relevant
    Borrower;

              

      

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      

       

      
        	
                (c)

              	
                as
      soon as possible, but in no event later than 120 days after the end of
      each financial year of the Corporate Guarantor, the annual audited
      accounts of the Corporate Guarantor for such financial year, duly
      certified by an international firm of accountants acceptable to the
      Lender; and

              

      

       

      
        	
                (d)

              	
                as
      soon as possible, but in no event later than 45 days after the end of each
      of the three-month periods during each financial year of the Corporate
      Guarantor, the quarterly management accounts of the Corporate Guarantor,
      certified as to their correctness by the chief financial officer of the
      Corporate Guarantor.

              

      

       

      
        	
                10.7

              	
                Form of financial
      statements.  All financial statements (audited and
      unaudited) delivered under Clause 10.6
will:

              

      

       

      
        	
                (a)

              	
                be
      prepared in accordance with all applicable laws and either international
      accounting standards or generally accepted accounting principles in the
      United States of America consistently
applied;

              

      

       

      
        	
                (b)

              	
                give
      a true and fair view of the state of affairs of each of the Borrowers or
      (as the case may be) the Corporate Guarantor at the date of those accounts
      and of the profit for the period to which those accounts relate;
      and

              

      

       

      
        	
                (c)

              	
                fully
      disclose or provide for all significant liabilities of each of the
      Borrowers or (as the case may be) the Corporate
  Guarantor.

              

      

       

      
        	
                10.8

              	
                Consents.  Each
      Borrower will 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 or
      Shipbuilding Contract to which it is
party;

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                for
      that Borrower to continue to own and operate its
  Ship,

              

      

       

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

      

      
        	
                10.9

              	
                Maintenance of Security
      Interests.  Each Borrower
will:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

              	
                without
      limiting the generality of paragraph (a) above, at its own cost, promptly
      register, file, record or enrol any Finance Document with any court or
      authority in all Pertinent Jurisdictions, pay any stamp, registration or
      similar tax in all Pertinent Jurisdictions in respect of any Finance
      Document, give any notice or take any other step which, in the opinion of
      the Lender, is 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.

              

      

       

      
        	
                10.10

              	
                Notification of
      litigation.  Each Borrower will provide the Lender with
      details of any legal or administrative action involving that Borrower, any
      Security Party, the Approved Manager or the Ship owned by that Borrower,
      its Earnings or its 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.

              

      

       

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

       

       

      
        	
                10.11

              	
                No amendment to Shipbuilding
      Contracts.  No Borrower will agree to any material
      amendment, change of price or material supplement to the Shipbuilding
      Contract to which it is a party or any of its provisions, without the
      prior written consent of the
Lender.

              

      

       

      
        	
                10.12

              	
                Principal place of
      business.  Each Borrower will maintain its place of
      business, and keep its corporate documents and records, at the address
      stated at the commencement of this Agreement; and no Borrower will
      establish, or do anything as a result of which it would be deemed to have,
      a place of business in the United Kingdom or the United States of
      America.

              

      

       

      
        	
                10.13

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                10.14

              	
                Notification of
      default.  Each Borrower will 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

              

      

       

      
        	
                (b)

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

              

      

       

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

      

      
        	
                10.15

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

              

      

       

      
        	
                (a)

              	
                to
      that Borrower, the Ship owned by it, the Insurances or the Earnings;
      or

              

      

       

      
        	
                (b)

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

              

      

       

      which
may be requested by the Lender at any time.

      

      
        	
                10.16

              	
                Translation of
      documents.  If the Lender so requires in respect of any
      of the documents referred to in this Clause 10, the Borrowers will provide
      a certified English translation prepared by a translator approved by the
      Lender.

              

      

       

      
        	
                10.17

              	
                Treasury
      Services.  No Borrower shall, and shall procure that no
      Security Party (other than the Corporate Guarantor) shall, enter into any
      treasury related contract with a bank or financial institution without
      first asking for quotes for such services or requirements from the
      Lender.

              

      

       

      
        	
                10.18

              	
                Ownership.  Each
      Borrower shall ensure that, without the prior written consent of the
      Lender, there shall be no change in the legal and beneficial ownership of
      any Borrower throughout the Security Period, and shall procure that at all
      times during the Security Period the Corporate Guarantor shall remain the
      owner of 100% of the shares in each
Borrower.

              

      

       

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      

       

      
        	
                11

              	
                CORPORATE
      UNDERTAKINGS

              

      

       

      
        	
                11.1

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

              

      

       

      
        	
                11.2

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

              

      

       

      
        	
                11.3

              	
                Negative
      undertakings.  No Borrower
  will:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

              	
                effect
      any form of redemption, purchase or return of share capital;
      or

              

      

       

      
        	
                (c)

              	
                without
      the prior written consent of the Lender, provide any form of credit or
      financial assistance or issue any guarantee to any person, or enter into
      any transaction with or involving such a person, except credit or
      financial assistance or guarantees provided to companies within the same
      beneficial or ultimate beneficial ownership as the Borrowers on an arm’s
      length basis in the normal course of
business;

              

      

       

      
        	
                (d)

              	
                without
      the prior written consent of the Lender, 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 to hedge the
      Borrowers’ exposure to interest rate fluctuations in the context of this
      Agreement, in accordance with a pre-agreed hedging strategy) or make any
      other capital investment;

              

      

       

      
        	
                (g)

              	
                enter
      into any form of amalgamation, merger or de-merger or any form of
      reconstruction or reorganisation or change its name;
  or

              

      

       

      
        	
                (h)

              	
                without
      the prior written consent of the Lender, incur any other Financial
      Indebtedness except indebtedness to companies within the same beneficial
      or ultimate beneficial ownership as the Borrowers on a fully subordinated
      basis.

              

      

       

      
        	
                11.4

              	
                Dividends.  For
      the avoidance of doubt, the Borrowers may pay dividends on an annual basis
      during the Security Period provided (i) all debt service has been met
      pursuant to the terms of this Agreement and (ii) no Event of Default or
      Potential Event of Default has occurred or would occur as a result of any
      such payment.

              

      

       

      
        	
                12

              	
                INSURANCE

              

      

       

      
        	
                12.1

              	
                General.  Each
      Borrower undertakes with the Lender to comply with the following
      provisions of this Clause 12 at all times during the Security Period
      (after the relevant Ship has been delivered to it under the relevant
      Shipbuilding Contract) except as the Lender may otherwise
      permit.

              

      

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      

       

      
        	
                12.2

              	
                Maintenance of obligatory
      insurances.  Each 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 (including war protection and indemnity liabilities);
      and

              

      

       

      
        	
                (c)

              	
                protection
      and indemnity risks (including cover for oil pollution liability 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.  Each Borrower shall effect such
      insurances:

              

      

       

      
        	
                (a)

              	
                in
      Dollars;

              

      

       

      
        	
                (b)

              	
                in
      the case of fire and usual marine risks and war risks, in an amount on an
      agreed value basis at least the greater of (i) the market value of the
      Ship owned by it and (ii) an amount which, when aggregated with the
      insured value of the other Ship at the relevant time subject to a
      Mortgage, is equal to or greater than 120% of the amount of the Loan and
      the Hedging Exposure;

              

      

       

      
        	
                (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 (with the international group of
      protection and indemnity clubs) and the international marine insurance
      market (currently $1,000,000,000);

              

      

       

      
        	
                (d)

              	
                in
      relation to protection and indemnity risks in respect of the full value
      and 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.

              

      

       

      
        	
                12.4

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

              	
                provide
      that the insurers shall waive, to the fullest extent permitted by English
      law, their entitlement (if any) (whether by statute, common law, equity,
      or otherwise) to be subrogated to the rights and remedies of the Lender in
      respect of any rights or interests (secured or not) held
  by

              

      

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      or
available to the Lender in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph (d) from making
personal claims against persons (other than the Borrowers or the Lender) in
circumstances where the insurers have fully discharged their liabilities and
obligations under the relevant obligatory insurances;

       

      
        	
                (e)

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

              

      

       

      
        	
                (f)

              	
                provide
      that the Lender may make proof of loss if the Borrowers fail to do so;
      and

              

      

       

      
        	
                (g)

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

              

      

       

      
        	
                12.5

              	
                Renewal of obligatory
      insurances.  Each Borrower
  shall:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (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 insurance and of the proposed terms of renewal;
      and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      case of any substantial change in insurance cover, obtain the Lender’s
      approval to the matters referred to in paragraph (i)
  above;

              

      

       

      
        	
                (b)

              	
                at
      least 14 days before the expiry of any obligatory insurance, renew the
      insurance; 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 Borrower shall ensure that all
      approved brokers provide the Lender with copies of all policies relating
      to the obligatory insurances which they 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 said loss payable
    clause;

              

      

       

      
        	
                (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 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

              

      

       

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      

       

      
        	
                (e)

              	
                they
      will not set off against any sum recoverable in respect of a claim
      relating to the Ship owned by that 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 forthwith upon being so requested by the
  Lender.

              

      

       

      
        	
                12.7

              	
                Copies of certificates of
      entry.  Each 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;

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                12.8

              	
                Deposit of original
      policies.  Each Borrower shall ensure that all policies
      relating to obligatory insurances are deposited with the approved brokers
      through which the insurances are effected or
  renewed.

              

      

       

      
        	
                12.9

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

              

      

       

      
        	
                12.10

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

              

      

       

      
        	
                12.11

              	
                Restrictions on
      employment.  No Borrower shall employ the Ship owned by
      it, nor permit her to be employed, outside the cover provided by any
      obligatory insurances.

              

      

       

      
        	
                12.12

              	
                Compliance with terms of
      insurances.  No Borrower shall do or omit to do (or
      permit to be done or not to be done) any act or thing which would or might
      render any obligatory insurance invalid, void, voidable or unenforceable
      or render any sum payable thereunder repayable in whole or in part; and,
      in particular:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      

       

      
        	
                (c)

              	
                each
      Borrower shall make 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
      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.

              

      

       

      
        	
                12.13

              	
                Alteration to terms of
      insurances.  No Borrower shall either make or agree to
      any alteration to the terms of any obligatory insurance or waive any right
      relating to any obligatory insurance without the prior written consent of
      the Lender.

              

      

       

      
        	
                12.14

              	
                Settlement of
      claims.  No 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.

              

      

       

      
        	
                12.15

              	
                Provision of copies of
      communications.  Each 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

              

      

       

      
        	
                (c)

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

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                12.16

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                12.17

              	
                Mortgagees’ interest,
      additional perils.  The Lender shall be entitled from
      time to time to effect, maintain and renew a mortgagee’s interest
      additional perils insurance and a mortgagees’ interest marine insurance in
      an amount equal to not less than 120% of the amount of the Loan
      and

              

      

       

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      the
Hedging Exposure and otherwise on such terms, through such insurers and
generally in such manner as the Lender may from time to time consider
appropriate and the 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.

       

      
        	
                12.18

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

              

      

       

      
        	
                12.19

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

              

      

       

      
        	
                12.20

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

              

      

       

      
        	
                13

              	
                SHIP
      COVENANTS

              

      

       

      
        	
                13.1

              	
                General.  Each
      Borrower also undertakes with the Lender to comply with the following
      provisions of this Clause 13 at all times during the Security Period
      (after the Ship has been delivered to it under the relevant Shipbuilding
      Contract) except as the Lender may otherwise
  permit.

              

      

       

      
        	
                13.2

              	
                Ship's name and
      registration.  Each Borrower shall keep the Ship owned by
      it registered in its name under the Approved Flag; shall not do or allow
      to be done anything as a result of which such registration might be
      cancelled or imperilled; and shall not change the name or port of registry
      of that Ship without the prior written consent of the
    Lender.

              

      

       

      
        	
                13.3

              	
                Repair and
      classification.  Each 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 such Ship with the highest classification available for
      vessels of the same age, type and specification as such Ship with Lloyd’s
      Register of Shipping (or such other first class classification society as
      may be approved by the Lender), free of outstanding recommendations and
      conditions affecting such Ship’s class;
and

              

      

       

      
        	
                (c)

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

              

      

       

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      

       

      
        	
                13.4

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

              

      

       

      
        	
                13.5

              	
                Removal of
      parts.  No Borrower shall remove any material part of any
      Ship, or any item of equipment installed on, any Ship unless the part or
      item so removed is forthwith replaced by a suitable part or item which is
      in the same condition as or better condition than the part or item
      removed, is free from any Security Interest or any right in favour of any
      person other than the Lender and becomes on installation on the relevant
      Ship the property of the relevant Borrower and subject to the security
      constituted by the relevant Mortgage Provided that a 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
      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
      Borrower shall permit the Lender (by surveyors or other persons appointed
      by it for that purpose) to board the Ship owned by it at all reasonable
      times to inspect her condition or to satisfy themselves about proposed or
      executed repairs and shall afford all proper facilities for such
      inspections.  Provided that the relevant Ship is found to be in
      satisfactory condition, the cost of such inspections shall be borne by the
      Borrowers not more than once per Ship per
year.

              

      

       

      
        	
                13.8

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

              

      

      

      
        	
                13.9

              	
                Compliance with laws
      etc.  Each Borrower
shall:

              

      

       

      
        	
                (a)

              	
                comply,
      or procure compliance with the ISM Code, the ISPS Code, all Environmental
      Laws and all other laws or regulations relating to the Ship owned by it,
      its ownership, operation and management or to the business of that
      Borrower (including, without limitation, the obtaining of all relevant
      certificates of financial responsibility and any other matters required
      for entering United States territorial waters or calling at any United
      States Port);

              

      

       

      
        	
                (b)

              	
                not
      employ the Ship owned by it nor allow her 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
      risks insurers unless the prior written consent of the Lender
      has

              

      

       

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      been
given and that Borrower has (at its expense) effected any special, additional or
modified insurance cover which the Lender may require.

       

      
        	
                13.10

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

              

      

       

      
        	
                (a)

              	
                the
      Ship owned by it, her 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 that Borrower with the ISM
Code

              

      

       

      
        	
                 
      

              	
                and,
      upon the Lender's request, provide copies of any current charter relating
      to the Ship owned by it and of any current charter guarantee, and copies
      of the ISM Code and ISPS Code
documentation.

              

      

      

      
        	
                13.11

              	
                Notification of certain
      events.  Each Borrower shall immediately notify the
      Lender 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 her Earnings or any requisition of
      that Ship for hire;

              

      

       

      
        	
                (e)

              	
                any
      intended dry docking of the Ship owned by
it;

              

      

       

      
        	
                (f)

              	
                any
      Environmental Claim made against that 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
      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 Borrower shall keep the Lender advised in writing on a regular basis
      and in such detail as the Lender shall require of that 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.  No Borrower shall without
      the prior written consent of the Lender (such consent not to be
      unreasonably withheld):

              

      

       

      
        	
                (a)

              	
                let
      the Ship owned by it on demise charter for any
  period;

              

      

       

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      

       

      
        	
                (b)

              	
                enter
      into any time or consecutive voyage charter in respect of the Ship owned
      by it 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 the Ship owned by it under which more than
      2 months' hire (or the equivalent) is payable in
  advance;

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (e)

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

              

      

       

      
        	
                (f)

              	
                de-activate
      or lay up the Ship owned by it;

              

      

       

      
        	
                (g)

              	
                put
      the Ship owned by it into the possession of any person for the purpose of
      work being done upon her in an amount exceeding or likely to exceed the
      Majority Casualty amount unless that person has first given to the Lender
      and in terms satisfactory to it a written undertaking not to exercise any
      lien on that Ship or her Earnings for the cost of such work or otherwise;
      or

              

      

       

      
        	
                (h)

              	
                change
      the flag on which its Ship is registered or the classification society
      with which its Ship is classed.

              

      

       

      
        	
                13.13

              	
                Notice of
      Mortgage.  Each Borrower shall keep the 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 Borrower to the
  Lender.

              

      

       

      
        	
                13.14

              	
                Sharing of
      Earnings.   No Borrower shall enter into any
      agreement or arrangement for the sharing of any Earnings, other than
      pursuant to time charters notified to and agreed by the Lender in writing
      prior to entering into the same.

              

      

       

      
        	
                13.15

              	
                Ownership.  Each
      of the Borrowers shall procure that there shall be no change in the legal
      or beneficial ownership of the shares in any of the Borrowers throughout
      the Security Period.

              

      

       

      
        	
                13.16

              	
                Approved
      Manager.  If, in the opinion of the Lender, the Approved
      Manager’s performance level falls below that expected of a prudent ship
      manager (for example, without limiting the generality of the foregoing,
      due to excessive off-hire periods in respect of a Ship), then the
      Borrowers undertake to replace such Approved Manager (forthwith upon being
      requested to do so by the Lender) with such other company as shall be
      acceptable to the Lender in its sole
discretion.

              

      

       

      
        	
                13.17

              	
                ISPS
      Code.  Each of the Borrowers shall comply with the ISPS
      Code and in particular, without limitation,
  shall:

              

      

       

      
        	
                (a)

              	
                procure
      that the Ship owned by it and the company responsible for such Ship’s
      compliance with the ISPS Code, comply with the ISPS Code;
    and

              

      

       

      
        	
                (b)

              	
                maintain
      for each Ship an ISSC; and

              

      

       

      
        	
                (c)

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

              

      

       

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      

       

      
        	
                13.18

              	
                Time Charter
      Assignment.  If any Borrower enters into any time charter
      in respect of its Ship which is of twelve (12) months or more in duration,
      or is capable of exceeding twelve (12) months in duration, the relevant
      Borrower shall, at the request of the Lender, execute in favour of the
      Lender an assignment and notice of assignment (and shall use its best
      endeavours to obtain acknowledgement of the same by the relevant
      charterer) of such time charter in such form and on such terms as the
      Lender may require, and shall deliver to the Lender such other documents
      equivalent to those referred to at paragraphs 3, 4 and 5 of Part A of
      Schedule 2 hereof as the Lender may
require.

              

      

       

      
        	
                13.19

              	
                No freight derivatives.
      No Borrower shall enter into or agree to enter into without the
      consent of the Lender any freight derivatives or any other instruments
      which have the effect of hedging forward exposure to freight
      derivatives.

              

      

       

      
        	
                13.20

              	
                General and administrative
      costs.  Each Borrower shall procure that (and, if
      required, shall provide evidence to demonstrate that) all general and
      administrative costs incurred in the ownership and operation of each Ship
      are subordinated in full to the debt service obligations of the Borrowers
      under this Agreement, to the extent permitted under applicable
      laws.

              

      

       

      
        	
                14

              	
                SECURITY
      COVER

              

      

       

      
        	
                14.1

              	
                Provision of additional
      security cover; prepayment of Loan.  Each Borrower
      undertakes with the Lender that, if (after the Delivery Date of the second
      Ship under the relevant Shipbuilding Contract) the Lender notifies the
      Borrowers that:

              

      

       

      
        	
                (a)

              	
                the
      aggregate Fair Market Value (determined as provided below) of the Ships
      subject to a Mortgage; plus

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                 
      

              	
                is
      below one hundred and twenty five per cent. (125%) of the amount of the
      Loan and the Hedging Exposure, the Borrowers will, within 1 month after
      the date on which the Lender's notice is served,
  either:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                provide,
      or ensure that a third party provides, additional security which, in the
      opinion of the Lender, has a net realisable value at least equal to the
      shortfall and which consists of either (a) cash pledged to the Lender or
      (b) a Security Interest (including, but not limited to, a first priority
      mortgage over another vessel), covering such asset or assets and
      documented in such terms as the Lender may approve or require;
      or

              

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        	
                14.2

              	
                Meaning of additional
      security.  In Clause 14.1 “security” means a
      Security Interest over an asset or assets (whether securing the Borrowers’
      liabilities under the Finance Documents or a guarantee in respect of those
      liabilities), or a guarantee, letter of credit or other security in
      respect of the Borrowers’ liabilities under the Finance
      Documents.

              

      

       

      
        	
                14.3

              	
                Requirement for additional
      documents.  The Borrowers shall not be deemed to have
      complied with Clause 14.1(b)(i) above until the Lender has received in
      connection with the additional security certified copies of documents of
      the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 2 Part A and
      such legal opinions in terms acceptable to the Lender from such lawyers as
      it may select.

              

      

       

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      

       

      
        	
                14.4

              	
                Valuation of
      Ships.  The Fair Market Value of a Ship shall be
      obtained:

              

      

       

      
        	
                (a)

              	
                in
      Dollars;

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                by
      taking the average of two written valuations prepared by two reputable
      sale and purchase ship brokers appointed by the
  Lender;

              

      

       

      
        	
                (d)

              	
                showing
      the value of the relevant Ship as at the date of, or at a date no earlier
      than 10 days prior to, such
valuations;

              

      

       

      
        	
                (e)

              	
                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;
  and

              

      

       

      
        	
                (f)

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

              

      

       

      
        	
                14.5

              	
                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 that shown either by way of a
      valuation complying with the requirements of Clause 14.3 or by a valuation
      from an independent sale and purchase shipbroker approved or appointed by
      the Lender (and on the basis of a sale for prompt delivery for cash on
      normal arm’s length commercial terms as between a willing seller and
      willing buyer, free of charter or other contract of
      employment).

              

      

       

      
        	
                14.6

              	
                Valuations
      binding.  Any valuation under Clause 14.1(b)(i), 14.4 or
      14.5 shall be binding and conclusive as regards the Borrowers, as shall be
      any valuation which the Lender makes of a security which does not consist
      of or include a Security Interest.

              

      

       

      
        	
                14.7

              	
                Provision of
      information.  The Borrowers shall promptly provide the
      Lender and any shipbroker or expert acting under Clause 14.4 or 14.5 with
      any information which the Lender or the shipbroker or expert may request
      for the purposes of the valuation; and, 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.

              

      

       

      
        	
                14.8

              	
                Payment of valuation
      expenses.  Without prejudice to the generality of the
      Borrowers’ obligations under Clauses 19.2, 19.3 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.

              

      

       

      
        	
                14.9

              	
                Frequency of
      valuations.  The Lender shall be entitled to obtain a
      valuation of each Ship at any time during the Security Period, provided
      that the costs and expenses of such shall only be borne by the Borrowers
      twice per year per Ship (in the absence of the occurrence of an Event of
      Default).

              

      

       

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      

       

      
        	
                15

              	
                PAYMENTS
      AND CALCULATIONS

              

      

       

      
        	
                15.1

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

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                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

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                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 accounts showing the
      amounts owing to it by 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 any accounts maintained under Clause 15.4
      show an amount to be owing by the Borrowers or a Security Party to the
      Lender, those accounts shall be prima facie evidence that that amount is
      owing to the Lender.

              

      

       

      
        	
                16

              	
                APPLICATION
      OF RECEIPTS

              

      

       

      
        	
                16.1

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

              

      

       

      
        	
                (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 under the Finance Documents other than those amounts referred
      to at paragraphs (ii), (iii) and (iv) (including, but without limitation,
      all amounts payable by the Borrowers
under

              

      

       

      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      Clauses
19, 20 and 21 of this Agreement or by the Borrowers or any Security Party under
any corresponding or similar provision in any other Finance
Document);

       

      
        	
                 
      

              	
                (ii)

              	
                secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Lender under the Finance
      Documents;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                thirdly,
      in or towards satisfaction pro rata of the Loan;
  and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                fourthly,
      in payment to the Lender of amounts then due and payable in respect of any
      Designated Transactions;

              

      

       

      
        	
                (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
      Borrowers and the Security Parties, states in its opinion will or may
      become due and payable in the future and, upon those amounts becoming due
      and payable, in or towards satisfaction of them in accordance with the
      provisions of Clause 16.1(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.

              

      

       

      
        	
                16.4

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

              

      

       

      
        	
                17

              	
                APPLICATION
      OF EARNINGS

              

      

       

      
        	
                17.1

              	
                Payment and application of
      Earnings.  Each Borrower undertakes with the Lender to
      ensure that, throughout the Security Period subject only to the provisions
      of the relevant General Assignment, all the Earnings of the Ship owned by
      it are paid to the Earnings Account relating to that
  Ship.

              

      

       

      
        	
                17.2

              	
                Monthly
      retentions.  Each Borrower undertakes with the Lender to
      ensure that, throughout the Security Period commencing on the date falling
      one month after the Drawdown Date of the Delivery Advance for the first
      Ship to be delivered and on the same day in each subsequent month, there
      is transferred to the Retention Account out of the Earnings received in
      the Earnings Accounts during the preceding calendar
  month:

              

      

       

      
        	
                (a)

              	
                one-third
      of the aggregate amount of the repayment instalments falling due under
      Clause 7.1 on the next Repayment Date;
and

              

      

       

      
        	
                (b)

              	
                the
      relevant fraction of the amount of interest accruing on the Loan which is
      payable on the next due date for payment of interest under this Agreement
      (increased or reduced to the extent necessary to take account of all
      Designated Transactions then
operative).

              

      

       

      
        
           

        

        
          39

          
            

          

        

        
           

        

      

      

       

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

       

      
        	
                17.3

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

              

      

       

      
        	
                17.4

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

              

      

       

      
        	
                (a)

              	
                the
      repayment instalment due on that Repayment Date;
  or

              

      

       

      
        	
                (b)

              	
                the
      amount of interest payable on that interest payment
  date,

              

      

       

      in
discharge of the Borrowers’ liability for that repayment instalment or that
interest.

       

      
        	
                17.5

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

              

      

       

      
        	
                17.6

              	
                Release of accrued
      interest.  Interest accruing under Clause 17.5 on the
      Retention Account shall be released to the Borrowers on each Repayment
      Date unless an Event of Default has occurred or the then credit balance on
      the Retention Account is less than what would have been the balance had
      the full amount required by Clause 17.2 (and Clause 17.3, if applicable)
      been transferred in that and each previous
  month.

              

      

       

      
        	
                17.7

              	
                Location of
      accounts.  Each Borrower shall
  promptly:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (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 and
      the Retention Account.

              

      

       

      
        	
                17.8

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

              

      

       

      
        	
                17.9

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

              

      

       

      
        
           

        

        
          40

          
            

          

        

        
           

        

      

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                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 or 14.1;
      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 paragraphs (a) or (b)
      above) if, in the opinion of the Lender, such default is capable of
      remedy, and such default continues unremedied 5 Business Days after
      written notice from the Lender requesting action to remedy the same;
      or

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (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 a Drawdown Notice
      or any other notice or document relating to a Finance Document is untrue
      or misleading when it is made; or

              

      

       

      
        	
                (f)

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

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        	
                 
      

              	
                (iii)

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

              

      

       

      
        	
                 
      

              	
                (iv)

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

              

      

       

      
        	
                 
      

              	
                (v)

              	
                any
      Security Interest securing any Financial Indebtedness of a Relevant Person
      becomes enforceable; or

              

      

       

      
        	
                (g)

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

              

      

       

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      Relevant Person becomes, in the opinion of the Lender, unable to pay its
      debts as they fall due; or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      assets of a Relevant Person are subject to any form of execution,
      attachment, arrest, sequestration or distress in respect of a sum of, or
      sums aggregating, $250,000 or more or the equivalent in another currency
      unless such execution, attachment, arrest, sequestration or distress is
      being contested in good faith and on substantial grounds and is discussed
      or withdrawn within thirty (30) days of the occurrence thereof;
      or

              

      

       

      
        	
                 
      

              	
                (iii)

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

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                an
      administrator is appointed (whether by the court or otherwise) in respect
      of a Relevant Person;

              

      

       

      
        	
                 
      

              	
                (v)

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

              

      

       

      
        	
                 
      

              	
                (vi)

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

              

      

       

      
        	
                 
      

              	
                (vii)

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

              

      

       

      
        	
                 
      

              	
                (viii)

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

              

      

       

      
        	
                 
      

              	
                (ix)

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

              

      

       

      
        	
                (h)

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

              

      

       

      
        	
                (i)

              	
                it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                for
      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

              

      

       

      
        
           

        

        
          42

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        	
                (j)

              	
                any
      consent necessary to enable any 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 or a Shipbuilding Contract is not granted, expires without being
      renewed, is revoked or becomes liable to revocation or any condition of
      such a consent is not fulfilled; or

              

      

       

      
        	
                (k)

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

              

      

       

      
        	
                (l)

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

              

      

       

      
        	
                (m)

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

              

      

       

      
        	
                (n)

              	
                any
      of the Ships is not delivered by the Builder to the relevant Borrower
      under the relevant Shipbuilding Contract by the date falling 210 days
      after the scheduled delivery date of such Ship referred to in Article VII
      of each Shipbuilding Contract;

              

      

       

      
        	
                (o)

              	
                a
      default occurs under any time charter of any Ship or under the management
      agreement with respect to any Ship;

              

      

       

      
        	
                (p)

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

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        	
                 
      

              	
                in
      the light of which the Lender considers that there is a significant risk
      that any Borrower or any Security Party is, or will later become, unable
      to discharge its liabilities under the Finance Documents to which it is a
      party 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:

              

      

       

      
        	
                (a)

              	
                the
      Lender may:

              

      

       

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

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

              

      

       

      
        
           

        

        
          43

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (iii)

              	
                serve
      on the Borrowers a notice declaring that an Event of Default has occurred
      and reserving all rights of the Lender under this Agreement and all the
      Finance Documents; and/or

              

      

       

      
        	
                 
      

              	
                (iv)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                18.3

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

              

      

       

      
        	
                18.4

              	
                Acceleration of
      Loan.  On the service of a notice under paragraph (a)(ii)
      of Clause 18.2, the Loan, 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
      paragraphs (a) (i) and (ii) of Clause 18.2 simultaneously or on different
      dates and it may take any action referred to in that Clause if no such
      notice is served or simultaneously with or at any time after the service
      of both or either of such notices.

              

      

       

      
        	
                18.6

              	
                Exclusion of Lender’s
      Liability.  Neither the Lender nor any receiver or
      manager appointed by it shall have any liability to any Borrower or any
      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,

              

      

       

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

       

      
        	
                18.7

              	
                Relevant
      Persons.  In this Clause 18 “a Relevant Person” means
      any Borrower, the Corporate Guarantor and any other Security Party and,
      for the purposes of Clause 18.1 (g), any charterer of a
    Ship.

              

      

       

      
        	
                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;
      and in Clause 18.1(g) “petition” includes an
      application.

              

      

       

      
        
           

        

        
          44

          
            

          

        

        
           

        

      

      

       

      
        	
                19

              	
                FEES
      AND EXPENSES

              

      

       

      
        	
                19.1

              	
                Arrangement and commitment
      fees.  The Borrowers shall pay to the
    Lender:

              

      

       

      
        	
                (a)

              	
                on
      the Drawdown Date of the first Advance, a non-refundable arrangement fee
      of $280,000; and

              

      

       

      
        	
                (b)

              	
                quarterly
      in arrears (and on the last day of the Availability Period) during the
      period from (and including) the date of this Agreement to the earlier of
      (i) the final Drawdown Date and (ii) the last day of the Availability
      Period, a commitment fee at the rate of 0.30% per annum on the undrawn
      amount of the Commitment from time to
time.

              

      

       

      
        	
                19.2

              	
                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.

              

      

       

      
        	
                19.3

              	
                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 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;

              

      

       

      
        	
                (d)

              	
                any
      step taken by the Lender concerned 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 reasonable legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.

      

      
        	
                19.4

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

              

      

       

      
        	
                19.5

              	
                Certification of
      amounts.  A notice which is signed by two officers of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender under this Clause 19 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall, save for manifest
      error, be prima facie evidence that the amount, or aggregate amount, is
      due.

              

      

       

      
        	
                20

              	
                INDEMNITIES

              

      

       

      
        	
                20.1

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

              

      

       

      
        
           

        

        
          45

          
            

          

        

        
           

        

      

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                (c)

              	
                any
      failure (for whatever reason) by the 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 Loan under Clause
      18;

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                20.2

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

              	
                in
      terminating, or otherwise in connection with, any interest and/or currency
      swap or any other transaction entered into (whether with another legal
      entity or with another office or department of the Lender) to hedge any
      exposure arising under this Agreement or that part which the Lender
      determines is fairly attributable to this Agreement of the amount of the
      liabilities, expenses or losses (including losses of prospective profits)
      incurred by it in terminating, or otherwise in connection with, a number
      of transactions of which this Agreement is
one.

              

      

       

      
        	
                20.3

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

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

      

      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, the ISPS Code or any
Environmental Law.

      
        
           

        

        
          46

          
            

          

        

        
           

        

      

      

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

      

      This
Clause 20.5 creates a separate liability of the Borrowers which is distinct from
its 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
      Agreement.  For the avoidance of doubt, Clause 20.4 does
      not apply in respect of sums due from the Borrowers to the Lender under or
      in connection with the Master Agreement as to which sums the provisions of
      section 8(c) (Contractual Currency) of the Master Agreement shall
      apply.

              

      

       

      
        	
                20.6

              	
                Certification of
      amounts.  A notice which is signed by an officer of the
      Lender, which states that a specified amount, or aggregate amount, is due
      to the Lender under this Clause 20 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall be prima facie
      evidence that the amount, or aggregate amount, is
  due.

              

      

       

      
        	
                21

              	
                NO
      SET-OFF OR TAX DEDUCTION

              

      

       

      
        	
                21.1

              	
                No
      deductions.  All amounts due from the Borrowers under a
      Finance Document shall be paid:

              

      

       

      
        	
                (a)

              	
                without
      any form of set-off, cross-claim or condition;
  and

              

      

       

      
        	
                (b)

              	
                free
      and clear of any tax deduction except a tax deduction which a Borrower is
      required by law to make.

              

      

       

      
        	
                21.2

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

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        
           

        

        
          47

          
            

          

        

        
           

        

      

      

       

      
        	
                (c)

              	
                the
      amount due in respect of the payment shall be increased by the amount
      necessary to ensure that the Lender receives and retains (free from any
      liability relating to the tax deduction) a net amount which, after the tax
      deduction, is equal to the full amount which it would otherwise have
      received.

              

      

       

      
        	
                21.3

              	
                Evidence of payment of
      taxes.  Within 1 month after making any tax deduction,
      the Borrower concerned shall deliver to the Lender documentary evidence
      satisfactory to the Lender that the tax had been paid to the appropriate
      taxation authority.

              

      

       

      
        	
                21.4

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

              

      

       

      
        	
                21.5

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

              

      

       

      
        	
                22

              	
                ILLEGALITY,
      ETC

              

      

       

      
        	
                22.1

              	
                Illegality.  This
      Clause 22 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

              	
                Prepayment; termination of
      Commitment.  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 Loan in accordance with Clause
7.

              

      

       

      
        	
                23

              	
                INCREASED
      COSTS

              

      

       

      
        	
                23.1

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

              

      

       

      
        	
                (a)

              	
                the
      introduction or alteration after the date of this Agreement of a law or an
      alteration after the date of this Agreement in the manner in which a law
      is interpreted or applied (disregarding any effect which relates to the
      application to payments under this Agreement of a tax on the Lender's
      overall net income); or

              

      

       

      
        	
                (b)

              	
                the
      effect of complying with any regulation (including any which relates to
      capital adequacy or liquidity controls or which affects the manner in
      which the Lender allocates capital resources to its obligations under this
      Agreement) which is introduced, or altered, or the interpretation or
      application of which is altered, after the date of this
      Agreement,

              

      

       

      
        
           

        

        
          48

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                is
      that the Lender (or a parent company of it) has incurred or will incur an
      “increased cost”, that is to say,:

              

      

      

      
        	
                 
      

              	
                (i)

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

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      reduction in the amount of any payment to the Lender under this Agreement
      or in the effective return which such a payment represents to the Lender
      or on its capital;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                an
      additional or increased cost of funding all or maintaining all or any of
      the advances comprised in a class of advances formed by or including the
      Loan or (as the case may require) the proportion of that cost attributable
      to the Loan; or

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                a
      liability to make a payment, or a return foregone, which is calculated by
      reference to any amounts received or receivable by the Lender under this
      Agreement;

              

      

       

      but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause 21.

      

      For
the purposes of this Clause 23.1 the Lender may in good faith allocate or spread
costs and/or losses among its assets and liabilities (or any class thereof) on
such basis as it considers appropriate.

      

      
        	
                23.2

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

              

      

       

      
        	
                23.3

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

              

      

       

      
        	
                23.4

              	
                Prepayment; termination of
      Commitment.  A notice under Clause 23.3 shall be
      irrevocable and on the date specified in its notice of intended
      prepayment, the Borrowers shall prepay (without premium or penalty) the
      Loan, together with accrued interest thereon at the applicable rate plus
      the applicable Margin plus the Mandatory Costs (if
  any).

              

      

       

      
        	
                23.5

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

              

      

       

      
        	
                24

              	
                SET-OFF

              

      

       

      
        	
                24.1

              	
                Application of credit
      balances.  The Lender may without prior
      notice:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

              	
                for
      that purpose:

              

      

       

      
        
           

        

        
          49

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                (i)

              	
                break,
      or alter the maturity of, all or any part of a deposit of the Borrowers or
      any of them;

              

      

       

      
        	
                 
      

              	
                (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 it is entitled
      (whether under the general law or any
document).

              

      

       

      
        	
                24.3

              	
                No Security
      Interest.  This Clause 24 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 Borrowers or any of
      them.

              

      

       

      
        	
                25

              	
                TRANSFERS
      AND CHANGES IN LENDING OFFICES

              

      

       

      
        	
                25.1

              	
                Transfer by the
      Borrowers.  No Borrower may, without the consent of the
      Lender:

              

      

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                25.2

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

              

      

       

      
        	
                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 of 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, the Borrowers
      or any Security Party; 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 it.

              

      

       

      
        	
                25.5

              	
                Disclosure of
      information.  The Lender may disclose to a potential
      assignee or sub-participant any information which the Lender has received
      in relation to the Borrowers, any Security Party or their affairs under or
      in connection with any Finance Document, provided that the potential
      assignee or sub-participant shall first have executed a confidentiality
      agreement in relation thereto.

              

      

       

      
        	
                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:

              

      

       

      
        
           

        

        
          50

          
            

          

        

        
           

        

      

      

       

      
        	
                (a)

              	
                the
      date on which the Borrowers receive the notice;
  and

              

      

       

      
        	
                (b)

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

              

      

       

      
        	
                26

              	
                VARIATIONS
      AND WAIVERS

              

      

       

      
        	
                26.1

              	
                Variations, waivers etc. by
      Lender.  Subject to Clause 26.2, 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, by 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 Clauses 26.1 and 26.2, 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 behalf of it) shall result in the
      Lender (or any person acting on behalf of it) 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

              	
                General.  Unless
      otherwise specifically provided, any notice under or in connection with
      any Finance Document shall be given by letter or fax; and references in
      the Finance Documents to written notices, notices in writing and notices
      signed by particular persons shall be construed
    accordingly.

              

      

       

      
        	
                27.2

              	
                Addresses for
      communications.  A notice shall be
  sent:

              

      

       

      
        	
                (a)

              	
                to
      a Borrower:

              	
                c/o

              	
                Omega
      Navigation Enterprises Inc.

              
	 
      	 
      	
                24
      Kanigos Street

              
	 
      	 
      	
                Kastella

              
	 
      	 
      	
                Piraeus

              
	 
      	 
      	
                Greece

              
	 
      	 
      	
                Fax
      No:  +30 210
      [                      ]

              
	 
      	 
      	
                Attn:
      Charilaos Loukopoulos, Executive Vice
President

              

      

      
        
           

        

        
          51

          
            

          

        

        
           

        

      

      

      
        	
                (b)

              	
                to
      the Lender:

              	
                The
      Governor and Company of the Bank of Scotland

              
	 
      	 
      	
                Pentland
      House

              
	 
      	 
      	
                8
      Lochside Avenue

              
	 
      	 
      	
                Edinburgh
      EH12 9DJ

              
	 
      	 
      	
                Scotland

              
	 
      	 
      	
                Fax
      No:  +44 131 658 3220

              

      

      

      or
to such other address as the relevant party may notify the Borrowers, the Lender
and the Security Parties.

       

      
        	
                27.3

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

              

      

       

      
        	
                (a)

              	
                a
      notice which is delivered personally or posted shall be deemed to be
      served, and shall take effect, at the time when it is
      delivered;

              

      

       

      
        	
                (b)

              	
                a
      notice which is sent by fax shall be deemed to be served, and shall take
      effect, 2 hours after its transmission is
  completed.

              

      

       

      
        	
                27.4

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

              

      

       

      
        	
                (a)

              	
                on
      a day which is not a business day in the place of receipt;
    or

              

      

       

      
        	
                (b)

              	
                on
      such a business day, but after 5 p.m. local
  time;

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                27.5

              	
                Illegible
      notices.  Clauses 27.3 and 27.4 do not apply if the
      recipient of a notice notifies the sender within one hour after the time
      at which the notice would otherwise be deemed to be served that the notice
      has been received in a form which is illegible in a material
      respect.

              

      

       

      
        	
                27.6

              	
                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.

              

      

       

      
        	
                27.7

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

              

      

       

      
        	
                27.8

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

              

      

       

      
        
           

        

        
          52

          
            

          

        

        
           

        

      

      

       

      
        	
                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 Borrowers’
      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.

              

      

       

      
        	
                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

              	
                SUPPLEMENTAL

              

      

       

      
        	
                29.1

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

              

      

       

      
        
           

        

        
          53

          
            

          

        

        
           

        

      

      

       

      
        	
                (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.

              

      

       

      
        	
                29.2

              	
                Severability of
      provisions.  If any provision of a Finance Document is or
      subsequently becomes void, unenforceable or illegal, that shall not affect
      the validity, enforceability or legality of the other provisions of that
      Finance Document or of the provisions of any other Finance
      Document.

              

      

       

      
        	
                29.3

              	
                Third party
      rights.  A person who is not a party to this Agreement
      has no right under the Contracts (Rights of Third Parties) Act 1999 to
      enforce or to enjoy the benefit of any term of this
    Agreement.

              

      

       

      
        	
                29.4

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

              

      

       

      
        	
                30

              	
                LAW
      AND JURISDICTION

              

      

       

      
        	
                30.1

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

              

      

       

      
        	
                30.2

              	
                Exclusive English
      jurisdiction.  Subject to Clause 30.3, the courts of
      England shall have exclusive jurisdiction to settle any disputes which may
      arise out of or in connection with this
  Agreement.

              

      

       

      
        	
                30.3

              	
                Choice of forum for the
      exclusive benefit of the Lender.  Clause 30.2 is for the
      exclusive benefit of the Lender which reserves the
  right:

              

      

       

      
        	
                (a)

              	
                to
      commence proceedings in relation to any matter which arises out of or in
      connection with this Agreement in the courts of any country other than
      England and which have or claim jurisdiction to that matter;
      and

              

      

       

      
        	
                (b)

              	
                to
      commence such proceedings in the courts of any such country or countries
      concurrently with or in addition to proceedings in England or without
      commencing proceedings in England.

              

      

       

      
        	
                 
      

              	
                No
      Borrower shall commence any proceedings in any country other than England
      in relation to a matter which arises out of or in connection with this
      Agreement.

              

      

      

      
        	
                30.4

              	
                Process
      agent.  Each Borrower irrevocably appoints Hill Dickinson
      LLP at their office for the time being, presently at Irongate House,
      Duke’s Place, London EC3A 7HX, England (attn: Electra Panayotopoulos), to
      act as its agent to receive and accept on its behalf any process or other
      document relating to any proceedings in the English courts which are
      connected with this Agreement.

              

      

       

      
        	
                30.5

              	
                Lender’s rights
      unaffected.  Nothing in this Clause 30 shall exclude or
      limit any right which the Lender may have (whether under the law of any
      country, an international convention or otherwise) with regard to the
      bringing of proceedings, the service of process, the recognition or
      enforcement of a judgment or any similar or related matter in any
      jurisdiction.

              

      

       

      
        	
                30.6

              	
                Meaning of
      “proceedings”.  In this Clause 30, “proceedings” means
      proceedings of any kind, including an application for a provisional or
      protective measure.

              

      

       

      

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

      

      
        
           

        

        
          54

          
            

          

        

        
           

        

      

      SCHEDULE
1

       

      DRAWDOWN
NOTICE

       

      

      To:       The
Governor and Company of the Bank of Scotland

      Pentland
House

      8
Lochside Avenue

      Edinburgh
EH12 9DJ

      Scotland

      

      

      

      Attention:
Loans
Administration                                                                                                                                 2007

      

      DRAWDOWN
NOTICE

      

      
        	
                1

              	
                We
      refer to the loan agreement (the “Loan Agreement”)
      dated                    2007
      and made between (i) ourselves as Borrowers and (2) yourselves as Lender
      in connection with a facility of up to US$70,000,000. Terms defined in the
      Loan Agreement have their defined meanings when used in this Drawdown
      Notice.

              

      

       

      
        	
                2

              	
                We
      request to borrow an Advance as
follows:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Amount
      of Advance:
      US$[         ];

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Drawdown
      Date:  [             ];

              

      

       

      
        	
                 
      

              	
                (c)

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

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Payment
      instructions : account of
      [                             ]
      and numbered
      [                                          ]
      with
      [                 ]
      of
      [                       ].

              

      

       

      
        	
                3

              	
                We
      represent and warrant that:

              

      

       

      
        	
                 
      

              	
                (a)

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

              

      

       

      
        	
                 
      

              	
                (b)

              	
                no
      Event of Default or Potential Event of Default has occurred or will result
      from the borrowing of the Loan.

              

      

       

      
        	
                4

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

              

      

       

      
        	
                5

              	
                [We
      authorise you to deduct from the Advance the amount of all accrued
      arrangement and commitment fees payable pursuant to Clause
      19.1].

              

      

       

      

      

      

      ___________________________________________

      Attorney-in-Fact

      for
and on behalf of

      
        
           

        

        
          55

          
            

          

        

        
           

        

      

      TYLER
NAVIGATION INC.

      and

      PASEDENA
NAVIGATION INC.

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
           

        

        
          56

          
            

          

        

        
           

        

      

      SCHEDULE
2

       

      CONDITION
PRECEDENT DOCUMENTS

       

      In
this Schedule 2 “Relevant
Ship” means, in relation to a Tranche, the Ship in respect of which an
Advance is being drawn.

      PART
A

      

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

      

      
        	
                1.

              	
                A
      duly executed original of each Predelivery Security Assignment (and all
      notices and acknowledgements required thereunder) and of the Corporate
      Guarantee.

              

      

       

      
        	
                2.

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

              

      

       

      
        	
                3.

              	
                Copies
      of resolutions of the directors and shareholders of each Borrower and of
      the directors of the Corporate Guarantor, authorising the execution of
      each of the Finance Documents referred to at 1 above to which that
      Borrower or the Corporate Guarantor is a party and, in the case of a
      Borrower, authorising named officers to give the Drawdown Notices and
      other notices under this Agreement and ratifying the execution of the
      Shipbuilding Contract to which it is a
party.

              

      

       

      
        	
                4.

              	
                The
      original of any power of attorney under which any Finance Document
      referred to at 1 above is executed on behalf of a Borrower or the
      Corporate Guarantor.

              

      

       

      
        	
                5.

              	
                Copies
      of all consents which any Borrower or any Security Party requires to enter
      into, or make any payment under, any Finance Document or the Shipbuilding
      Contract to which it is a party.

              

      

       

      
        	
                6.

              	
                Copies
      of each of the Shipbuilding Contracts and of all documents signed or
      issued by the Borrowers or the Builder (or any of them) under or in
      connection with them, together with evidence of authorisation with respect
      to the execution thereof by the
Builder.

              

      

       

      
        	
                7.

              	
                Originals
      of each of the Refund Guarantees, together with evidence of authorisation
      with respect to the execution thereof by the Refund
    Guarantor.

              

      

       

      
        	
                8.

              	
                All
      documentation required by the Lender in respect of any Borrower or
      Security Party pursuant to the Lender’s “Know your customer” requirements,
      together with such other documents or evidence as the Lender may
      reasonably require with respect to money laundering
      regulations.

              

      

       

      
        	
                9.

              	
                Evidence
      satisfactory to the Lender in its sole discretion regarding the ownership
      structure with respect to the
Ships.

              

      

       

      
        	
                10.

              	
                Documentary
      evidence that the agent for service of process named in Clause 30 has
      accepted its appointment.

              

      

       

      
        	
                11.

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

              

      

       

      
        	
                12.

              	
                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.

              

      

       

      
        
           

        

        
          57

          
            

          

        

        
           

        

      

      PART
B

      

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

      

      
        	
                1.

              	
                A
      duly receipted invoice from the Builder with respect to the payment by the
      relevant Borrower of the first instalment due under Article X2(a) of the
      Shipbuilding Contract relating to the Relevant
  Ship.

              

      

       

      PART
C

      

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

      

      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(b) of the Shipbuilding Contract relating to the
      Relevant Ship.

              

      

       

      PART
D

      

      The
following are the documents referred to in Clause 8.1(d):

      

      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(c) of the relevant Shipbuilding Contract upon
      commencement of steel cutting for the Relevant
  Ship.

              

      

       

      
        	
                2.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that steel cutting of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              

      

       

      PART
E

      

      The
following are the documents referred to in Clause 8.1(e):

      

      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(d) of the relevant Shipbuilding Contract upon
      keel-laying of the Relevant Ship.

              

      

       

      
        	
                2.

              	
                Written
      confirmation from the relevant Borrower and the Approved Manager (if
      appointed) that they have irrevocably accepted and approved the building
      works which have been completed on the Relevant Ship up to the date of her
      keel-laying.

              

      

       

      
        	
                3.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that keel-laying of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              

      

       

      
        	
                 
      

              	
                PART
      F

              

      

       

       

      
        	
                 
      

              	
                The
      following are the documents referred to in Clause
  8.1(f):

              

      

       

      
        	
                1.

              	
                An
      invoice from the Builder showing all sums due and payable to the Builder
      pursuant to Article X2(e) of the relevant Shipbuilding Contract upon
      launching of the Relevant Ship.

              

      

       

      
        	
                2.

              	
                Written
      confirmation from the relevant Borrower and the Approved Manager (if
      appointed) that they have irrevocably accepted and approved the building
      works which have been completed on the Relevant Ship up to the date of her
      launching.

              

      

       

      
        
           

        

        
          58

          
            

          

        

        
           

        

      

      

       

      
        	
                3.

              	
                A
      stage certificate issued by the Builder and countersigned by the
      classification society approved by the Lender and in a form acceptable to
      the Lender, confirming that launching of the Relevant Ship has been
      carried out to the satisfaction of such classification
      society.

              

      

       

      PART
G

      

      The
following are the documents referred to in Clause 8.1(g):

      

      
        	
                1.

              	
                A
      duly executed original of the Mortgage and the General Assignment (and of
      each document to be delivered under each of them) in respect of the
      Relevant Ship, the Accounts Pledge, the Master Agreement and the Master
      Agreement Security Deed.

              

      

       

      
        	
                2.

              	
                Documentary
      evidence that:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                the
      Relevant Ship is in all respects ready to be delivered by the Builder to,
      and accepted by, the relevant Borrower under the relevant Shipbuilding
      Contract subject only to payment of the delivery instalment and that upon
      such payment the builder’s certificate, bill of sale and other documents
      to be delivered by the Builder to the relevant Borrower upon delivery of
      the Relevant Ship to that Borrower will be so
  delivered;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Relevant Ship will on its Delivery Date be definitively and permanently
      registered in the name of the relevant Borrower under the Approved
      Flag;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                the
      Relevant Ship will on its Delivery Date be in the absolute and
      unencumbered ownership of the relevant Borrower save as contemplated by
      the Finance Documents;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                the
      Relevant Ship will on its Delivery Date be classed with the highest
      available class with Lloyds Register of Ships (or equivalent) free of all
      overdue recommendations and conditions of such Classification
      Society;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                the
      Mortgage in respect of the Relevant Ship has been executed by the relevant
      Borrower and has been, or will immediately following drawdown of the
      Delivery Advance for such Ship be, registered against the Relevant Ship as
      a valid first priority ship mortgage in accordance with the laws of the
      Approved Flag State; and

              

      

       

      
        	
                 
      

              	
                (f)

              	
                the
      Relevant Ship will on its Delivery Date be insured in accordance with the
      provisions of this Agreement and all requirements therein in respect of
      insurances have been complied with.

              

      

       

      
        	
                3.

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

              

      

       

      
        	
                 
      

              	
                (a)

              	
                the
      Approved Manager’s Undertaking in respect of the Relevant Ship, together
      with a copy of the ship management agreement for the Relevant
      Ship;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                copies
      of the Document of Compliance and Safety Management Certificate and
      ISSC;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                copies
      of such other ISM Code or ISPS Code documentation as the Lender may by
      written notice to the relevant Borrower have requested not later than 2
      days before the relevant Drawdown Date, certified as true and complete in
      all material respects by the relevant Borrower and the Approved
      Manager.

              

      

       

      
        
           

        

        
          59

          
            

          

        

        
           

        

      

      

       

      
        	
                4.

              	
                Valuations
      of the Relevant Ship addressed to the Lender, prepared in accordance with
      Clause 14 and in a form satisfactory to the
  Lender.

              

      

       

      
        	
                5.

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

              

      

       

      
        	
                6.

              	
                A
      favourable opinion from an independent insurance consultant appointed by
      the Lender on such matters relating to the insurances for the Relevant
      Ship as the Lender may require, and at the cost and expense of the
      Borrowers.

              

      

       

      
        	
                7.

              	
                A
      certified true copy of any time charter for the Relevant Ship in excess of
      twelve months, in a form and substance and with a charterer acceptable to
      the Lender in its sole discretion.

              

      

       

      
        	
                8.

              	
                Satisfactory,
      in the opinion of the Lender, Approved Flag State and classification
      society records as the Lender may request in respect of the Relevant
      Ship.

              

      

       

      
        	
                9.

              	
                Evidence
      satisfactory to the Lender that there has been no material adverse change
      in the financial condition of any Borrower or the Corporate Guarantor
      which could materially affect the Lender’s agreement to make available the
      Delivery Advance relating to the Relevant
Ship.

              

      

       

      Every
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or the secretary (or equivalent officer) of a
Borrower.

       

      
        
           

        

        
          60

          
            

          

        

        
           

        

      

      

      SCHEDULE
3

       

      AMOUNT
OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT

       

      

      

      

      
        	 
      	 	
                Hull
      2189

                
                

              	 	 	
                Hull
      2190

                
                

              	 
	
                First
      Instalment

                (already
      paid)

                 

              	 	$	4,423,500	 	 	$	4,423,500	 
	
                Second
      Instalment

                (six
      months after Contract signing)

                 

              	 	$	4,423,500	 	 	$	4,423,500	 
	
                Third
      Instalment

                (on
      steel cutting)

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Fourth
      Instalment

                (on
      keel-laying)

                 

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Fifth
      Instalment

                (on
      launching)

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Delivery
      Instalment

              	 	$	8,847,000	 	 	$	8,847,000	 
	
                Total

              	 	$	44,235,000	 	 	$	44,235,000	 

      

      

      

      

      

      

      

      

      

      

      

      
        
           

        

        
          61

          
            

          

        

        
           

        

      

      SCHEDULE
4

      

      MANDATORY
COSTS

      

      
        	
                1.

              	
                Mandatory
      Costs are 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.

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

              

      

      

      
        	
                3.

              	
                If
      the Lender is lending from an office in a Participating Member State, the
      Additional Cost Rate will be the percentage certified by the Lender to be
      its reasonable determination of the cost of complying with the minimum
      reserve requirements of the European Central Bank in respect of loans made
      from that office.

              

      

      

      
        	
                4.

              	
                If
      the Lender is lending from an office in the United Kingdom the Additional
      Cost Rate will be calculated by the Lender as
  follows:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                if
      the Loan is denominated in pounds
sterling:

              

      

      

      
        	 
      	
                AB
      + C ( B - D) + E x 0.01

              	
                    
      per cent. per annum

              
	 
      	
                100
      - (A + C)

              

      

      

      
        	
                 
      

              	
                (b)

              	
                if
      the Loan is denominated in any currency other than pounds
      sterling:

              

      

      

      
        	 
      	
                E
      x 0.01

              	
                    
      per cent. per annum

              
	 
      	
                300

              

      

      

      Where:

      

      
        	
                 
      

              	
                A

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

              

      

      

      
        	
                 
      

              	
                B

              	
                is
      the percentage rate of interest (excluding the applicable Margin and the
      Mandatory Costs and any additional rate of interest specified in Clause 6)
      payable for the relevant Interest Period on the
  Loan.

              

      

      

      
        	
                 
      

              	
                C

              	
                is
      the percentage (if any) of Eligible Liabilities which the Lender is
      required from time to time to maintain as interest bearing Special
      Deposits with the Bank of England.

              

      

      

      
        	
                 
      

              	
                D

              	
                is
      the percentage rate per annum payable by the Bank of England to the Lender
      on interest bearing Special
Deposits.

              

      

      

      
        	
                 
      

              	
                E

              	
                is
      designed to compensate the Lender for amounts payable under the Fees Rules
      and is calculated 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 of the Tariff Base of the
Lender.

              

      

      
        
           

        

        
          62

          
            

          

        

        
           

        

      

      

      
        	
                5.

              	
                For
      the purposes of this Schedule:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                “Eligible Liabilities”
      and “Special
      Deposits” have the meanings given to them from time to time under
      or pursuant to the Bank of England Act 1998 or (as may be appropriate) by
      the Bank of England;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                “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 fro the acceptance of
  deposits;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                “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); and

              

      

      

      
        	
                 
      

              	
                (d)

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

              

      

      

      
        	
                6.

              	
                In
      application of the above formulae, A, B, C and D will be included in the
      formulae as percentages (i.e. 5 per cent. will be included in the formula
      as 5 and not as 0.05). A negative result obtained by subtracting D from B
      shall be taken as zero. The resulting figures shall be rounded to four
      decimal places.

              

      

      

      
        	
                7.

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

              

      

      

      
        	
                8.

              	
                The
      Lender may from time to time, after consultation with the Borrowers,
      determine 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 Lender and the
Borrowers.

              

      

      

      

      

      
        
           

        

        
          63

          
            

          

        

        
           

        

      

      EXECUTION
PAGE

       

      

      
        	
                BORROWERS

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                TYLER
      NAVIGATION INC.

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                PASEDENA
      NAVIGATION INC.

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                LENDER

              	 
      	 
      
	 
      	 
      	 
      
	
                SIGNED
by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	 
      
	
                THE
      GOVERNOR AND

              	
                )

              	 
      
	
                COMPANY
      OF THE BANK

              	
                )

              	 
      
	
                OF
      SCOTLAND

              	
                )

              	 
      
	
                in
      the presence of:

              	
                )

              	 
      

      

      

      

      

      SK
23286 0002 889270

      
        
           

        

        
          64

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