Document:

Exhibit 10.17

 

 

Date
23 May 2008

 

BRITANNIA BULK PLC

as
Borrower

 

–
and –

 

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as
Lenders and Swap Banks

 

–
and –

 

LLOYDS TSB BANK PLC 

NORDEA BANK DANMARK A/S

as
Arrangers

 

–
and –

 

NORDEA BANK DANMARK A/S

as
Agent and Security Trustee

 

 

LOAN AGREEMENT

 

relating
to

a
term loan facility of up to US$170,000,000

 

Watson, Farley & Williams

London

 

 

INDEX

 

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1

  	
  INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  FACILITY

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  POSITION OF THE LENDERS AND SWAP
  BANKS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  DRAWDOWN

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  INTEREST

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  INTEREST PERIODS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  DEFAULT INTEREST

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  REPAYMENT, PREPAYMENT AND
  CANCELLATION

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  CONDITIONS PRECEDENT

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  GENERAL UNDERTAKINGS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  CORPORATE UNDERTAKINGS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  INSURANCE

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  SHIP COVENANTS

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  SECURITY COVER

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  PAYMENTS AND CALCULATIONS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  APPLICATION OF RECEIPTS

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  APPLICATION OF EARNINGS

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  EVENTS OF DEFAULT

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  FEES AND EXPENSES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  INDEMNITIES

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  22

  	
  NO SET-OFF OR TAX DEDUCTION

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  23

  	
  ILLEGALITY, ETC

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  24

  	
  INCREASED COSTS

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  25

  	
  SET-OFF

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  26

  	
  TRANSFERS AND CHANGES IN
  LENDING OFFICES

  	
   

  	
  59

  

 

 

	
  27

  	
  VARIATIONS AND WAIVERS

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  28

  	
  NOTICES

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  29

  	
  SUPPLEMENTAL

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  30

  	
  LAW AND JURISDICTION

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
  PART A LENDERS AND
  COMMITMENTS

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PART B SWAP BANKS

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  DRAWDOWN NOTICE

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
  PART A
  CONDITION PRECEDENT DOCUMENTS

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PART B

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4

  	
  TRANSFER CERTIFICATE

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 5

  	
  DETAILS OF FACILITY SHIPS AND
  OWNERS

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 6

  	
  DETAILS OF COLLATERAL SHIPS AND
  OWNERS

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  EXECUTION PAGES

  	
   

  	
  80

  
					

 

 

THIS AGREEMENT is made on 23 May 2008

 

BETWEEN

 

(1)                                 BRITANNIA BULK PLC,  as Borrower;

 

(2)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part A of Schedule 1, as Lenders;

 

(3)                                 THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1, as Swap Banks;

 

(4)                                 LLOYDS TSB BANK PLC and NORDEA BANK DANMARK A/S,
as Arrangers;

 

(5)                                 NORDEA BANK DANMARK A/S, as Agent; and

 

(6)                                 NORDEA BANK DANMARK A/S, as Security  Trustee.

 

BACKGROUND

 

(A)                             The Lenders have agreed to make available to the Borrower a term
loan facility of up to $170,000,000 for the purpose of refinancing part of the
existing indebtedness of the Borrower and Britannia Bulk Finance Limited in
relation to (i) the Bonds, (ii) the Goldman Sachs Facility, and (iii) the
Lloyds Facility.

 

(B)                               The Swap Banks have separately
agreed that they will (subject to Clause 5.16) enter into interest rate swap
transactions with the Borrower from time to time to hedge the Borrower’s
exposure under this Agreement to interest rate fluctuations.

 

(C)                               The Lenders and the Swap Banks
have agreed to share in the security granted to the Security Trustee pursuant
to this Agreement on a pari passu basis.

 

IT IS AGREED as follows:

 

1                                        INTERPRETATION

 

1.1                              Definitions.
Subject
to Clause 1.5, in this Agreement:

 

“Accounts
Pledge”  means in respect of
the Deposit Account and the Earnings Accounts, the pledge to be executed by the
Borrower and Britannia Bulk DK A/S in favour of the Security Trustee in the
Agreed Form;

 

“Adjusted Loan Amount”  means, at any relevant time, the Loan less the
amount of any Pledged Cash;

 

“Affected Lender”  has the meaning given in Clause 5.7;

 

“Agency and Trust Deed”  means the agency and trust deed dated the
same date as this Agreement and entered into between the same parties as are
parties to this Agreement;

 

“Agent”  means Nordea Bank Danmark A/S (company
registration number (CVR) 13522197), acting in such capacity through its office
at Christiansbro, Strandgade 3, PO Box 850, DK-0900, Copenhagen, Denmark, or
any successor of it appointed under clause 5 of the Agency and Trust Deed;

 

“Agreed
Form”  means in relation to
any document, that document in the form approved or to be approved in writing
by the Agent (acting on the instructions of the Majority 

 

 

Lenders) or as otherwise approved in
accordance with any other approval procedure specified in any relevant
provision of any Finance Document;

 

“Allocated
Ship Amount”  means, in
relation to each Facility Ship:

 

(a)                                 from the date of this Agreement and prior to any valuations being
obtained pursuant to Clause 15.5, an amount equal to the principal amount of
the Loan multiplied by the percentage stated in the column titled “Weight Share
of Loan” next to the relevant Facility Ship in Schedule 5; and

 

(b)                                at any other time an amount equal to the Loan multiplied by the
percentage represented by the Fair Market Value of the relevant Facility Ship
(based on the last set of valuations obtained or received pursuant to Clause
15.5) divided by the aggregate Fair Market Value of all of the Facility Ships
(based on the last set of valuations obtained or received pursuant to Clause
15.5);

 

“Allocated
Ship Outstanding Amount”   means:

 

(a)                                 in relation to each Facility Ship, the Allocated Ship Amount for
that Facility Ship as such amount shall be determined at the relevant time; and

 

(b)                                in relation to each Collateral Ship, 50 per cent. of the net sale
proceeds or Total Loss proceeds received by the relevant Owner on the sale of
such Collateral Ship (provided that the Agent is satisfied that such sale is
made at arms length and on normal commercial terms) or in the case of such
Collateral Ship becoming a Total Loss;

 

“Approved Manager”  means:

 

(a)                                 in relation to the technical management of each Facility Ship and
VORNAES II, Svendborg Ship Management A/S (company registration number CVR
27405665, a company incorporated in Denmark whose registered office is at Det
Gule Pakhus, Havnepladsen 3A, 3.sal DK5700 Svendborg, Denmark;

 

(b)                                in relation to the commercial management of each Facility Ship and
VORNAES II, the Borrower or any 100 per cent. owned subsidiary of the
Shareholder Guarantor; and

 

(c)                                 in relation to the technical and commercial management of each
Collateral Ship (other than and VORNAES II), Britannia Bulk DK A/S,

 

or, in each
case, any other company which the Agent may, with the authorisation of the
Majority Lenders, approve from time to time as the technical or commercial
manager of that Ship (such approval not to be unreasonably withheld or
delayed);

 

“Approved
Shipbroker”  means Simpson,
Spence & Young, H. Clarkson & Co. Ltd., Fearnleys A/S and
R.S. Platou Shipbrokers AS or such other independent sale and purchase
shipbrokers which the Agent has selected (with the authorisation of the
Majority Lenders) and the Borrower has approved;

 

“Arrangers”  means Lloyds TSB Bank plc and Nordea Bank
Danmark A/S;

 

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

 

(a)                                 30 July 2008 (or such later date as the Agent may, with the
authorisation of the Lenders, agree with the Borrower); or

 

2

 

(b)                                if earlier, the date on which the Total Commitments are fully
borrowed, cancelled or terminated in accordance with this Agreement;

 

“Bond
Documents”  means the Bonds,
the Indenture, any supplemental indenture entered into in connection therewith
(including supplemental indentures pursuant to which the Owners guarantee the
notes), the Security Documents (as defined in the Indenture) and the other
documents entered into in connection therewith;

 

“Bonds”  means Borrower’s 11 per cent. senior secured
notes due 2011;

 

“Borrower”  means Britannia Bulk Plc, a company
incorporated in England and Wales with company registration number 03842976
whose registered office is at Dexter House, 2 Royal Mint Court, London
EC3N 4QN, England;

 

“Business Day”  means a day on which banks are open in London
and Copenhagen and, in respect of a day on which a payment is required to be
made under a Finance Document, also in New York City;

 

“Change of
Control”  means the occurrence of one or
more of the following events:

 

(a)                                 any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the “beneficial
owner” (as defined in Rule 13d 3 and 13d 5 under the Exchange
Act, except that for purposes of this Clause (a) such person shall be
deemed to have “beneficial ownership”
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35 per cent. of the total voting power of the voting
shares of the Shareholder Guarantor or otherwise has the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the board of directors of the Shareholder Guarantor; or

 

(b)                                individuals who constituted the board of directors of the
Shareholder Guarantor immediately following the IPO (together with any new
directors whose election by such board of directors or whose nomination for
election by the shareholders of the Shareholder Guarantor was approved by a
vote of a majority of the directors of the Shareholder Guarantor then still in
office who were either directors immediately following the IPO or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of the Shareholder
Guarantor then in office; or

 

(c)                                 the adoption or approval by the board of directors or shareholders
of the Shareholder Guarantor of a plan relating to the liquidation or
dissolution of the Shareholder Guarantor; or

 

(d)                                the merger (which for purposes of this Clause includes a statutory
share exchange) or consolidation of the Shareholder Guarantor with or into
another entity or the merger or consolidation of another entity with or into
the Shareholder Guarantor, or the sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
the assets of the Shareholder Guarantor (determined on a consolidated basis) to
another entity (other than, in all such cases, an entity that is controlled by
one or more Permitted Holders) or group of related persons for purposes of Section 13(d) of
the Exchange Act, other than a transaction following which (A) in the case
of a merger or consolidation transaction, securities that represented 100 per
cent. of the voting shares of the Shareholder Guarantor immediately prior to
such transaction (or other securities into which such securities are converted
as part of such merger or consolidation transaction) constitute at least a
majority of the voting power of the voting shares of the surviving entity (or
any parent thereof) in 

 

3

 

such merger or consolidation transaction and
(B) in the case of such a sale, lease, exchange or other transfer of
assets transaction, the transferee entity becomes a Subsidiary of the
transferor of such assets; or

 

(e)                                 the Borrower ceases to be a wholly-owned subsidiary of the
Shareholder Guarantor or any Owner ceases to be a direct wholly-owned
subsidiary of the Borrower;

 

“Charter
Assignment”  means, in
relation to a Ship, an assignment of any charter in relation to that Ship which
is equal to or exceeds 24 months in duration and any guarantee in relation to
such charter to be executed by the Owner of that Ship in favour of the Security
Trustee (and also in favour of the other Creditor Parties in the case of the
charter assignments to be executed by Britannia Bulk DK A/S) in the Agreed
Form;

 

“Classification
Society”  means, in relation
to each Ship, the classification society indicated in Schedule 5 or Schedule 6,
or such other classification society as the Agent shall approve from time to
time, such approval not to be withheld if any new classification society has
already been approved by the Agent in respect of another Ship and the relevant
Ship will obtain a similar class notation to the class notation which it had
with the previous classification society which had been approved by the Agent
and, in the case of “COMMANDER II”, the Lenders have approved a transfer from
NKK to RINA subject to the highest class notation being maintained;

 

“Collateral
Ships”  means the 9 ships
listed as ships 1 to 9 (inclusive) in Schedule 6 which are owned by the
relevant Owner at the date of this Agreement and are registered on the flag as
indicated in that schedule (and which are sometimes referred to in this
Agreement by their individual names listed in Schedule 6);

 

“Commitment”  means, in relation to a Lender, the amount
set opposite its name in Schedule 1, or, as the case may require, the
amount specified in the relevant Transfer Certificate, as that amount may be
reduced, cancelled or terminated in accordance with this Agreement (and “Total Commitments” means the aggregate of
the Commitments of all the Lenders);

 

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

 

“Contractual Currency”  has the meaning given in Clause 21.4;

 

“Contribution”  means, in relation to a Lender, the part of
the Loan which is owing to that Lender;

 

“Creditor Party”  means the Agent, the Security Trustee, the
Arrangers, any Lender or any Swap Bank, whether as at the date of this
Agreement or at any later time;

 

“Deed of
Covenant”  means, in relation
to the “ENFORCER II” a deed of covenant collateral to the Mortgage on that Ship
creating a charge over that Ship to be executed by the Owner of that Ship in
favour of the Security Trustee in the Agreed Form;

 

“Deposit
Account”  means an account in
the name of the Borrower with the Agent in Copenhagen designated “Deposit
Account” with account number 5036240697 and IBAN Number DK 8020005036240697, or
any other account (with that or another office of the Agent or with a bank or
financial institution other than the Agent) which is designated by the Agent as
the Deposit Account for the purpose of this Agreement;

 

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

 

4

 

(a)                                 it is entered into by the Borrower pursuant to a Master Agreement
with a Swap Bank; and

 

(b)                                the notional amount of the Transaction together with the aggregate
notional amount of all the other Transactions then outstanding shall not exceed
100 per cent. of the Loan;

 

“Dollars” and “$”  means the lawful
currency for the time being of the United States of America;

 

“Drawdown Date”  means the date requested by the Borrower for
the Loan to be made, or (as the context requires) the date on which the Loan is
actually made;

 

“Drawdown Notice”  means a notice in the form set out in
Schedule 2 (or in any other form which the Agent 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 Owner of that Ship or the Security Trustee and which arise out of the
use or operation of that Ship, including (but not limited to):

 

(a)                                 except to the extent that they fall within paragraph (b);

 

(i)                                    all freight, hire and passage moneys;

 

(ii)                                 compensation payable to the Owner or the Security Trustee in the
event of requisition of the Ship for hire;

 

(iii)                              remuneration for salvage and towage services;

 

(iv)                             demurrage and detention moneys;

 

(v)                                damages for breach (or payments for variation or termination) of any
charterparty or other contract for the employment of the Ship; and

 

(vi)                             all moneys which are at any time payable under any Insurances in
respect of loss of hire; and

 

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

 

“Earnings
Accounts”  means:

 

(a)                                 in the case of the Collateral Ships, a Dollar account in the name of
Britannia Bulk DK A/S with the Agent in Copenhagen designated “Dollar Earnings
Account” with account number 5036106893 and IBAN Number DK 2320005036108893, a
Euro account in the name of Britannia Bulk DK A/S with the Agent in Copenhagen
designated “Euro Earnings Account” with account number 5036106907 and IBAN
Number DK 3320005036106907, and a Danish Kroner account in the name of
Britannia Bulk DK A/S with the Agent in Copenhagen designated “Danish Kroner
Earnings Account” with account number 6267890089 and IBAN Number DK
6720006267890089; and

 

(b)                                in the case of the Facility Ships, a Dollar account in the name of
the Borrower with the Agent in Copenhagen designated “Dollar Earnings Account”
with account number 5036240638 and IBAN Number DK 2420005036240638 and a

 

5

 

Euro
account in the name of the Borrower with the Agent in Copenhagen designated “Euro
Earnings Account” with account number 5036240646 and IBAN Number DK
0220005036240646,

 

and, in each case, any other account (with
that or another office of the Agent or with a bank or financial institution other
than the Agent) which is designated by the Agent and the Borrower as an
Earnings Account for the purposes of this Agreement;

 

“Enforcer
II Purchase Option”  means the
purchase option granted to CSL Australia Pty. Ltd. as charterers of the m.v.
ENFORCER II under a time charter dated 9 March 2007 and pursuant to a side
letter dated 9 March 2007;

 

“Environmental Claim”  means:

 

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

 

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

 

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

 

“Environmental Incident”  means:

 

(a)           any release of
Environmentally Sensitive Material from a Ship; or

 

(b)           any incident in which
Environmentally Sensitive Material is released from a vessel other than a Ship
and which involves a collision between a Ship and such other vessel or some
other incident of navigation or operation, in either case, in connection with
which a Ship is actually or potentially liable to be arrested, attached, detained
or injuncted and/or a Ship and/or the Borrower or an Owner (as the case may be)
and/or any operator or manager of a Ship is at fault or allegedly at fault or
otherwise liable to be subject 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 likely to be
arrested and/or where the Borrower or an Owner (as the case may be) and/or any
operator or manager of a Ship is at fault or allegedly at fault or is
reasonably likely to be subject 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 19.1;

 

“Exchange
Act”  means the Securities
Exchange Act of 1934 of the United States;

 

6

 

“Existing Finance Documents”  means collectively (i) the Bond
Documents, (ii) the Goldman Sachs Facility together with all the documents
entered into in connection therewith, and (iii) the Lloyds Facility
together with all the documents entered into in connection therewith;

 

“Existing Loans”  means the Financial Indebtedness evidenced by
the Existing Finance Documents;

 

“Facility
Ships”  means the 13 ships
listed as ships 1 to 13 (inclusive) in Schedule 5 which are owned by the
relevant Owner at the date of this Agreement and are registered on the flag as
indicated in that schedule (and which are also sometimes referred to in this
Agreement by their individual names listed in Schedule 5);

 

“Fair
Market Value”  means, in relation
to a Ship, a valuation of its market price as determined in accordance with
Clause 15.5;

 

“Finance Documents”  means:

 

(a)                                 this Agreement;

 

(b)                                the Agency and Trust Deed;

 

(c)                                 the Guarantees;

 

(d)                                the Mortgages;

 

(e)                                 the Pledge of Mortgage;

 

(f)                                   the Deed of Covenant;

 

(g)                                the General Assignments;

 

(h)                                any Charter Assignment;

 

(i)                                    the Accounts Pledge;

 

(j)                                    the Master Agreement Assignment; and

 

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

 

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

 

(a)                                 for any payment due under a charter, a shipbuilding contract, a
derivatives contract or any other contract entered into in the ordinary course
of business by the debtor;

 

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

 

(c)                                 under any loan stock, bond, note or other debt security issued by
the debtor;

 

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

 

7

 

(e)                                 under a financial lease, a deferred purchase consideration
arrangement (other than trade and accounts payable incurred in the ordinary
course of business) or any other agreement having the commercial effect of a
borrowing or raising of money by the debtor;

 

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

 

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

 

“GAAP”  means generally accepted accounting
principles in the United States of America;

 

“General
Assignment”  means, in
relation to a Ship, a general assignment in respect of the Earnings, the
Insurances and any Requisition Compensation relating to that Ship to be
executed by the Owner of that Ship in favour of the Security Trustee (and also
in favour of the other Creditor Parties in the case of the general assignments
to be executed by Britannia Bulk DK A/S) in the Agreed Form;

 

“Goldman
Sachs Facility”  means a loan
facility dated 6 November 2007 (as amended and restated on 22 November 2007
and on 13 February 2008 and as may be further amended from time to time)
entered into between, inter alia, Britannia Bulk Finance Limited and Goldman
Sachs Credit Partners L.P.;

 

“Guarantee”  means a guarantee and indemnity in respect of
the liabilities of the Borrower under this Agreement and the Master Agreements
to be executed by each Guarantor in favour of the Security Trustee in the
Agreed Form;

 

“Guarantors”  means, together, each of the Owners and the
Shareholder Guarantor;

 

“Indenture”  means an Indenture dated 16 November 2006
entered into between the Borrower, the guarantors named as guarantors therein
and Wilmington Trust Company as trustee;

 

“Insurances”  means, in relation to a Ship:

 

(a)                                 all policies and contracts of insurance, including entries of that
Ship in any protection and indemnity or war risks association, which are
effected in respect of that Ship, its Earnings or otherwise in relation to it;
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

 

but excluding any insurances taken out by a
Creditor Party for the sole benefit of the Creditor Parties, or any of them;

 

“Interest Period”  means a period determined in accordance with
Clause 6;

 

“IPO”  means the initial public offering of the
common shares of the Shareholder Guarantor as described in paragraph 4 of Part B
of Schedule 3;

 

“ISM Code”  means the International Safety Management
Code (including the guidelines on its implementation), adopted by the
International Maritime Organisation, as the same may be amended or supplemented
from time to time (and the terms “safety
management

 

8

 

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 as adopted by the International Maritime Organisation,
as the same may be amended or supplemented from time to time;

 

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

 

“Lender”  means a bank or financial institution listed
in Schedule 1 and acting through its branch indicated in Schedule 1 (or through
another branch notified to the Borrower under Clause 26.14) or its transferee,
successor or assign;

 

“LIBOR”  means, in relation to any period for which an
interest rate is to be determined under any provision of a Finance Document:

 

(a)                        the applicable Screen Rate; or

 

(b)                       if no Screen Rate is available for that period, the rate per annum
determined by the Agent to be the arithmetic mean (rounded upwards, if not
already such a multiple, to the nearest one sixteenth of one per cent.) of the
rates, as supplied to the Agent at its request, quoted by each Reference Bank
to leading banks in the London Interbank Market,

 

as of noon (Copenhagen time) on the Quotation
Date for that period for the offering of deposits in the relevant currency and
for a period comparable to that period;

 

“Lloyds
Facility”  means a loan
facility dated 13 February 2008 entered into between the Borrower, the
lenders listed therein and Lloyds TSB Bank plc as agent and security trustee;

 

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

 

“Major Casualty”  means, in relation to a Ship, any casualty to
that 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 $1,000,000 or the equivalent in any other currency;

 

“Majority Lenders”  means:

 

(a)                                 before the Loan has been made, Lenders whose Commitments total at
least 67 per cent. of the Total Commitments; and

 

(b)                                after the Loan has been made, Lenders whose Contributions total at
least 67 per cent. of the Loan;

 

“Margin”  means the percentage per annum referred to as
the Margin in a separate letter agreed in writing between the Agent and the
Borrower;

 

“Master
Agreement”  means each master
agreement (on the 1992 or the 2002 ISDA (Multicurrency Crossborder) form as the
case may be) and the Schedule thereto signed or to be signed between the
Borrower and a Swap Bank and includes all Designated Transactions from time to
time entered into and Confirmations from time to time exchanged thereunder;

 

9

 

“Master
Agreement Assignment”  means
the assignment in relation to the Master Agreements to be executed by the
Borrower in favour of the Security Trustee in the Agreed Form;

 

“Material Adverse Change”  means a change which has had or will have a
material adverse effect on (i) the financial condition of the Borrower and
the Guarantors taken as a whole, (ii) the ability of the Borrower and the
Guarantors taken as a whole to perform their obligations under the Finance
Documents and the Master Agreements, or (iii) the effectiveness of any
surety or Security Interest provided by the Borrower or any Guarantor;

 

“Maturity
Date”  means 30 July 2013
or, if earlier, the date falling 60 months after the Drawdown Date;

 

“Mortgage”  means:

 

(a)                                 in relation to the “EXPLORER II”, “CHALLENGER II”, “ADVENTURE II”, “VOYAGER
II”, “DISCOVERY II”, “COMMANDER II”, “NAVIGATOR II”, “ENDEAVOUR II”, “ENDURANCE
II”, “ICE TRADER II”, “ICE POWER II”, “VORNAES II” and “DEFIANT II”, the first
preferred Panamanian fleet ship mortgage on those Ships; and

 

(b)                                in relation to the “ENFORCER II”, the first priority Maltese ship
mortgage on that Ship,

 

each of which
mortgages shall be executed by the Owner of the relevant Ship or Ships in
favour of the Security Trustee in the Agreed Form;

 

“Negotiation
Period”  has the meaning given
in Clause 5.10;

 

“Notifying Lender”  has the meaning given in Clause 23.1 or
Clause 24.1 as the context requires;

 

“Owner”  means, in relation to each Facility Ship, the
owner of that Facility Ship as indicated in Schedule 5 and in relation to
each Collateral Ship, the owner of that Collateral Ship as indicated in
Schedule 6, each of which is a company incorporated in Panama whose registered
office is at c/o Vives y Asociadas, Calle Beatriz M. de Cabal, Edificio P.H.
Proconsa II, 8 avo. Piso, Panama, Apartado Postal 0816-01461, Panama, Republic
of Panama, other than Britannia Bulk DK A/S which is a company incorporated in
Denmark whose registered office is at Det Gule Pakhus, Havnepladsen 3A, 3rd
Floor, Svendborg, 5700, Denmark (company registration number CVR 27405665, Provided that upon the sale or Total Loss
of all of the Ships owned by an Owner and the application of the proceeds
thereof to a mandatory prepayment or to Pledged Cash in accordance with Clause
8.8 and the payment of any amount that may be due on the termination of any
Transaction(s) pursuant to Clause 8.12, the Agent and the Security Trustee
shall release such Owner from all its obligations under the Finance Documents,
including the discharge of all Security Interests applicable to assets or
property of such Owner and such Owner shall cease to be an “Owner” for the
purposes of the Finance Documents;

 

“Payment Currency”  has the meaning given in Clause 21.4;

 

“Permitted
Holders”  means Arvid Tage or any member
of his immediate family or any trust or similar vehicle formed for his benefit
or any entity that is at least majority owned and controlled, directly or
indirectly by him;

 

“Permitted Security
Interests”  means:

 

10

 

(a)                                 Security Interests created by the Finance Documents;

 

(b)                                Security Interests securing the Existing Loans, provided that such
Security Interests shall cease to be Permitted Security Interests on the
Drawdown Date;

 

(c)                                 liens for unpaid master’s and crew’s wages in accordance with usual
maritime practice;

 

(d)                                liens for salvage;

 

(e)                                 liens arising by operation of law for not more than 2 month’s
prepaid hire under any charter in relation to a Ship not prohibited by this
Agreement;

 

(f)                                   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 Borrower or an Owner (as the case may be) in
good faith by appropriate steps) and subject, in the case of liens for repair
or maintenance, to Clause 14.13(h);

 

(g)                                any Security Interest created in favour of a plaintiff or defendant
in any proceedings or arbitration as security for costs and expenses where the
Borrower or an Owner (as the case may be) is actively prosecuting or defending
such proceedings or arbitration in good faith;

 

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

 

(i)                                    Security Interests in cash deposited with the trustee under the
Indenture to provide for redemption of the Remaining Bonds as described in
paragraph 3 of Part B of Schedule 3;

 

“Pertinent Document”  means:

 

(a)                                 any Finance Document;

 

(b)                                any Master Agreement;

 

(c)                                 any policy or contract of insurance contemplated by or referred to
in Clause 13 or any other provision of this Agreement or another Finance
Document;

 

(d)                                any other document contemplated by or referred to in any Finance
Document or in any Master Agreement; and

 

(e)                                 any document which has been or is at any time sent by or to a
Servicing Bank in contemplation of or in connection with any Finance Document,
any Master Agreement or any policy, contract or document falling within
paragraphs (b) or (c);

 

“Pertinent Jurisdiction”,
in relation to a company, means:

 

(a)                                 England and Wales;

 

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

 

11

 

(c)                                 a country in which the company has the centre of its main interests
or 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 branch or 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, whether as main
or territorial or ancillary proceedings or which would have such jurisdiction
if their assistance were requested by the courts of a country referred to in
paragraphs (b) or (c);

 

“Pertinent Matter”  means:

 

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

 

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

 

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

 

“Pledge of Mortgage”  means, in relation to the “BREGNINGE II”, “TROENSE
II”, “VINDEBY II”, “HJORTOE II”, “SKAROE II”, “SIOE II”, “DREJOE II” and “IHOLM
II”, a first priority pledge of the Danish fleet mortgage on those Ships to be
executed by Britannia Bulk DS A/S in favour of the Creditor Parties in the
Agreed Form,

 

“Potential Event of Default”  means an event or circumstance which, with
the giving of any notice or the lapse of time, would constitute an Event of
Default;

 

“Quotation Date”  means, in relation to any period for which an
interest rate is to be determined under any provision of a Finance Document,
the day which is 2 Business Days before the first day of that period, unless
market practice differs in the London Interbank Market for a currency, in which
case the Quotation Date will be determined by the Agent in accordance with
market practice in the London Interbank Market (and if quotations would
normally be given by leading banks in the London Interbank Market on more than
one day, the Quotation Date will be the last of those days);

 

“Reference Banks”  means, subject to Clause 26.16, the London
branch of Nordea Bank Finland Plc, Lloyds TSB Bank plc and up to 2 other prime
international banks from time to time selected by the Agent;

 

“Relevant Person”  has the meaning given in Clause 19.9;

 

“Remaining Bonds”  has the meaning given to it in paragraph 3 of
Part B of Schedule 3;

 

“Repayment
Date”  means a date on which a
repayment is required to be made under Clause 8;

 

“Replacement
Ship” means:

 

12

 

(a)                                 in relation to a Facility Ship, one or more other ships of
comparable age (or newer) and comparable type and with an aggregate Fair Market
Value of at least the same amount as the Facility Ship sold or which was
subject to a Total Loss and which has been approved by the Agent acting
reasonably; and

 

(b)                                in relation to a Collateral Ship, another ship with a Fair Market
Value of at least equal to 50 per cent. of the net sale proceeds and/or
insurance proceeds of the Collateral Ship sold or which was subject to a Total
Loss;

 

and, in each case, which is registered on
Danish, Maltese or Panama flag or any other flag acceptable to the Agent
(acting reasonably);

 

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

 

“Screen
Rate”  means, in relation to
any period for which an interest rate is to be determined under any provision
of a Finance Document, the British Bankers’ Association Interest Settlement
Rate for the relevant currency and period displayed on the appropriate page of
the Reuters screen. If the agreed page is replaced or service ceases to be
available, the Agent may specify another page or service displaying the
appropriate rate after consultation with the Borrower and the Lenders;

 

“Secured Liabilities”  means all liabilities which the Borrower, the
Security Parties or any of them have, at the date of this Agreement or at any
later time or times, under or in connection with any Finance Document or any
Master Agreement or any judgment relating to any Finance Document or any Master
Agreement; 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 (other than a
right of set-off or combination of accounts conferred by the standard terms of
business of a bank or financial institution);

 

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

 

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

 

“Security Party”  means each Owner and the Shareholder
Guarantor and any other person (except a Creditor Party) who, as a surety or
mortgagor, as a party to any subordination or priorities arrangement, or in any
similar capacity, executes a document falling within the last paragraph of the
definition of “Finance Documents”;

 

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

 

(a)                                 all amounts which have become due for payment by the Borrower or any
Security Party under the Finance Documents and the Master Agreements have been
paid;

 

13

 

(b)                                no amount is owing or has accrued (without yet having become due for
payment) under any Finance Document or any Master Agreement; and

 

(c)                                 neither the Borrower nor any Security Party has any future or
contingent liability with respect to any known or asserted claim under Clause
20, 21 or 22 or any other provision of this Agreement or another Finance
Document or a Master Agreement;

 

“Security Trustee”  means Nordea Bank Danmark A/S, acting in such
capacity through its office at Christiansbro, Strandgade 3, PO Box 850,
DK-0900, Copenhagen, Denmark, or any successor of it appointed under clause 5
of the Agency and Trust Deed;

 

“Servicing Bank”  means the Agent or the Security Trustee;

 

“Shareholder
Guarantor”  means Britannia
Bulk Holdings Inc., a corporation incorporated in the Marshall Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, MH96960, Marshall Islands;

 

“Ships”  means the Facility Ships and the Collateral
Ships;

 

“Swap Bank”  means a bank or financial institution listed
in Part B of Schedule 1 and acting through its branch indicated in Part B
of Schedule 1 or its transferee, successor or assign;

 

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

 

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

 

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

 

(b)                                any abandonment or condemnation of that Ship by any government or
official authority or by any person or persons claiming to be or to represent a
government or official authority;

 

(c)                                 any expropriation, confiscation, requisition or acquisition of that
Ship, whether for full consideration, a consideration less than its proper
value, a nominal consideration or without any consideration, which is effected
by any government or official authority or by any person or persons claiming to
be or to represent a government or official authority (excluding a requisition
for hire for a fixed period not exceeding 1 year without the right of an
entension provided that this exclusion should only apply to 1 Ship at any time)
whether de jure or de facto unless it is within 1 month
redelivered to the full control of the Owner of that Ship; and

 

(d)                                any arrest, capture, seizure or detention of that Ship (including
piracy or theft) unless it is within 1 month redelivered to the full control of
the Owner of that Ship;

 

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

 

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

 

14

 

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

 

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

 

(ii)                                 the date of any compromise, arrangement or agreement made by or on
behalf of the relevant Owner with that Ship’s insurers in which the insurers
agree to treat that 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 Agent that the event constituting
the total loss occurred;

 

“Transaction”  has the meaning given in the Master
Agreements;

 

“Transfer Certificate”  has the meaning given in Clause 26.2; and

 

“Trust Property”  has the meaning given in clause 3.1 of the
Agency and Trust Deed.

 

1.2                              Construction
of certain terms. In
this Agreement:

 

“administration notice”  means a notice appointing an administrator, a notice
of intended appointment and any other notice which is required by law
(generally or in the case concerned) to be filed with the court or given to a
person prior to, or in connection with, the appointment of an administrator;

 

“approved”  means, for the purposes of Clause 13,
approved in writing by the Agent;

 

“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 or fax;

 

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

 

“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 order or decree, any form of
delegated legislation, 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;

 

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

 

15

 

“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 is obliged to procure are effected, under
Clause 13 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 in them of clause 6 of the
International Hull Clauses (1/11/02 or 1/11/03) or clause 8 of the Institute
Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute Time Clauses
(Hulls) (1/10/83) 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 generally followed by reputable operators in the industry 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;

 

“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 29 of the International Hull Clauses (1/11/02 or 1/11/03),
clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the
Institute Time Clauses (Hulls) (1/11/95).

 

1.3                              Meaning of “month”. A
period of 1 or more “months”
ends on the day in the relevant calendar month numerically corresponding to the
day of the calendar month on which the period started (“the numerically corresponding day”), but:

 

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

 

16

 

(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
or indirectly owned by P; or

 

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

 

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

 

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

 

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

 

1.5                              General Interpretation. In
this Agreement:

 

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

 

(b)                                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;

 

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

 

(d)                                Clauses
1.1 to 1.5 apply unless the contrary intention appears.

 

1.6                              Headings. In interpreting a Finance
Document or any provision of a Finance Document, all clause, sub-clause and
other headings in that and any other Finance Document shall be entirely
disregarded.

 

2                                        FACILITY

 

2.1                              Amount of facility. Subject
to the other provisions of this Agreement, the Lenders shall make available to
the Borrower a term loan facility not exceeding $170,000,000 provided that if
the Drawdown Date has not occurred by 30 June 2008 the amount made
available to the Borrower under this Agreement shall be the lower of (a) $170,000,000,
(b) 65 per cent. of the Fair Market Value (based on valuations dated no
earlier than 30 days before the Drawdown Date) of NAVIGATOR II, ENDEAVOUR II,
ENDURANCE II, ICE TRADER II and ICE POWER II, and (c) 50 per cent. of the
Fair Market Value (based on valuations dated no earlier than 30 days before the
Drawdown Date) of the Facility Ships.

 

2.2                              Lenders’ participations. Subject
to the other provisions of this Agreement, each Lender shall participate in the
Loan in the proportion which, as at the Drawdown Date, its Commitment bears to
the Total Commitments.

 

2.3                              Purpose of Loan. The
Borrower undertakes with each Creditor Party to use the Loan only for the
purpose stated in the preamble to this Agreement.

 

3                                        POSITION OF THE LENDERS AND SWAP
BANKS

 

3.1                              Interests several. The
rights of the Lenders and of the Swap Banks under this Agreement and under the
Master Agreements are several.

 

3.2                              Individual right of action. Each
Lender and each Swap Bank shall be entitled to sue for any amount which has
become due and payable by the Borrower to it under this Agreement or under any
Master Agreement without joining the Agent, the Security

 

17

 

Trustee, the Arrangers, any other Lender or the Swap Banks
as additional parties in the proceedings.

 

3.3                              Proceedings requiring Majority Lender consent. Except
as provided in Clause 3.2, neither any Lender nor any Swap Bank may commence
proceedings against the Borrower or any Security Party in connection with a
Finance Document or a Master Agreement without the prior consent of the
Majority Lenders.

 

3.4                              Obligations several. The
obligations of the Lenders under this Agreement and of each Swap Bank under the
Master Agreement to which it is a party are several; and a failure of a Lender
to perform its obligations under this Agreement or a failure by a Swap Bank to
perform its obligations under the Master Agreement to which it is a party shall
not result in:

 

(a)                                 the
obligations of the other Lenders or of the other Swap Banks being increased;
nor

 

(b)                                the
Borrower, any Security Party, any other Lender or any other Swap Bank being
discharged (in whole or in part) from its obligations under any Finance
Document or under any Master Agreement;

 

and in no circumstances shall a Lender or a Swap
Bank have any responsibility for a failure of another Lender or a Swap Bank to
perform its obligations under this Agreement or (in the case of a Swap Bank)
under the Master Agreement to which it is a party.

 

4                                        DRAWDOWN

 

4.1                              Request for advance of Loan. Subject
to the following conditions, the Borrower may request that the Loan be made by
ensuring that the Agent receives a completed Drawdown Notice not later than
10.00 a.m. (Copenhagen time) 3 Business Days prior to the intended
Drawdown Date.

 

4.2                              Availability. The conditions referred to in
Clause 4.1 are that:

 

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

 

(b)                                the
amount of the Loan shall not exceed the Total Commitments.

 

4.3                              Notification to Lenders of receipt of a Drawdown Notice. The
Agent shall promptly notify the Lenders that it has received the Drawdown
Notice and shall inform each Lender of:

 

(a)                                 the
amount of the Loan and the Drawdown Date;

 

(b)                                the
amount of that Lender’s participation in the Loan; and

 

(c)                                 the
duration of the Interest Period.

 

4.4                              Drawdown Notice irrevocable. The
Drawdown Notice must be signed by a director or other duly authorised person on
behalf of the Borrower; and once served, the Drawdown Notice cannot be revoked
without the prior consent of the Agent, acting with the authorisation of the
Majority Lenders.

 

4.5                              Lenders to make available Contributions. Subject
to the provisions of this Agreement, each Lender shall, on and with value on
the Drawdown Date, make available to the Agent for the account of the Borrower
the amount due from that Lender on that Drawdown Date under Clause 2.2.

 

18

 

4.6                              Disbursement of Loan. Subject
to the provisions of this Agreement, the Agent shall on the Drawdown Date pay
to the Borrower the amounts which the Agent receives from the Lenders under
Clause 4.5; and that payment to the Borrower shall be made to the accounts
which the Borrower specifies in the Drawdown Notice.

 

4.7                              Disbursement of Loan to third party. The
payment by the Agent under Clause 4.6 shall constitute the making of the Loan
and the Borrower shall thereupon become indebted, as principal and direct
obligor, to each Lender in an amount equal to that Lender’s Contribution.

 

5                                        INTEREST

 

5.1                              Payment of normal interest. Subject
to the provisions of this Agreement, interest on the Loan in respect of each
Interest Period shall be paid by the Borrower on the last day of that Interest
Period.

 

5.2                              Normal rate of interest. Subject
to the provisions of this Agreement, the rate of interest on the Loan in
respect of an Interest Period shall be the aggregate of the Margin and LIBOR
for that Interest Period.

 

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

 

5.4                              Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:

 

(a)                                 each
rate of interest; and

 

(b)                                the
duration of each Interest Period,

 

as soon as practicable after each is determined but
no later than 2 Business Days prior to the commencement of the next Interest
Period.

 

5.5                              Obligation of Reference Banks to quote. A
Lender which is a Reference Bank shall use all reasonable efforts to supply any
quotation required of it for the purposes of fixing a rate of interest under
this Agreement.

 

5.6                              Absence of quotations by Reference Banks. If
any Reference Bank fails to supply a quotation when required, the Agent shall
determine the relevant LIBOR on the basis of the quotations supplied by the
other Reference Bank or Banks; but if 2 or more of the Reference Banks fail to
provide a quotation, the relevant rate of interest shall be set in accordance
with the following provisions of this Clause 5.

 

5.7                              Market disruption. The
following provisions of this Clause 5 apply if:

 

(a)                                 no
Screen Rate is available for an Interest Period and 2 or more of the Reference
Banks do not, before 12.00 p.m. (Copenhagen time) on the Quotation Date
for an Interest Period, provide quotations to the Agent in order to fix LIBOR;
or

 

(b)                                at
least 1 Business Day before the start of an Interest Period, Lenders having
Commitments amounting to more than 50 per cent. of the Total Commitments notify
the Agent that LIBOR fixed by the Agent would not accurately reflect the cost
to those Lenders of funding their respective Contributions (or any part of
them) during the Interest Period in the London Interbank Market at or about
10.00 a.m. (Copenhagen time) on the Quotation Date for the Interest
Period; or

 

19

 

(c)                                 at least 1 Business Day before the start
of an Interest Period, the Agent is notified by a Lender (the “Affected Lender”) that for any reason it is
unable to obtain Dollars in the London Interbank Market in order to fund its
Contribution (or any part of it) during that Interest Period.

 

5.8                              Notification of market disruption. The
Agent shall promptly notify the Borrower and each of the Lenders stating the
circumstances falling within Clause 5.7 which have caused its notice to be
given.

 

5.9                              Suspension of drawdown. If the
Agent’s notice under Clause 5.8 is served before the Loan is made:

 

(a)                                 in
a case falling within Clauses 5.7(a) or 5.7(b), the Lenders’ obligations
to make the Loan; and

 

(b)                                in
a case falling within Clause 5.7(c), the Affected Lender’s obligation to
participate in the Loan,

 

shall be suspended while the circumstances referred to
in the Agent’s notice continue.

 

5.10                       Negotiation of alternative rate of interest. If
the Agent’s notice under Clause 5.8 is served after the Loan is made, the
Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender
shall use reasonable endeavours to agree, within the 30 days after the date on
which the Agent serves its notice under Clause 5.8 (the “Negotiation Period”), an alternative
interest rate or (as the case may be) an alternative basis for the Lenders or
(as the case may be) the Affected Lender to fund or continue to fund their or
its Contribution during the Interest Period concerned.

 

5.11                       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.

 

5.12                       Alternative rate of interest in absence of agreement. If
an alternative interest rate or alternative basis is not agreed within the
Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Agent shall, with the agreement of each Lender
or (as the case may be) the Affected Lender, set an interest period and
interest rate representing the cost of funding of the Lenders or (as the case
may be) the Affected Lender in Dollars or in any available currency of their or
its Contribution plus the Margin; and the procedure provided for by this Clause
5.12 shall be repeated if the relevant circumstances are continuing at the end
of the interest period so set by the Agent.

 

5.13                       Notice of prepayment. If the
Borrower does not agree with an interest rate set by the Agent under Clause
5.12, the Borrower may give the Agent not less than 15 Business Days’ notice of
its intention to prepay at the end of the interest period set by the Agent.

 

5.14                       Prepayment; termination of Commitments. A
notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify
the Lenders or (as the case may require) the Affected Lender of the Borrower’s
notice of intended prepayment; and:

 

(a)                                 on
the date on which the Agent serves that notice, the Total Commitments or (as
the case may require) the Commitment of the Affected Lender shall be cancelled;
and

 

(b)                                on
the last Business Day of the interest period set by the Agent, the Borrower
shall prepay (without premium or penalty) the Loan or, as the case may be, the
Affected Lender’s Contribution, together with accrued interest thereon at the
applicable rate plus the Margin.

 

20

 

5.15                       Application of prepayment. The
provisions of Clause 8 shall apply in relation to the prepayment.

 

5.16                       Designated Transactions under a Master Agreement.
At any time the Borrower may request the Swap Banks to conclude Designated
Transactions for the purpose of swapping its interest payment obligations under
this Agreement in respect of an aggregate amount of up to the Loan. The
Borrower shall do this by advising the Agent of its desire to do so and also of
the proportions in which it wishes to invite each Swap Bank to participate
provided that Lloyds TSB Bank plc shall only be requested to participate in up
to 60 per cent. of the Loan at any relevant time unless it has obtained
approval to participate for a greater amount. Promptly after receipt of such
request from the Borrower, the Agent shall notify the Swap Banks thereof and,
within 3 Business Days following the Borrower’s notice, the Swap Banks shall
provide quotes for their portions of the proposed Transaction. The Borrower
shall be under no obligation to accept any such quotes but may do so in its
discretion.

 

6                                        INTEREST PERIODS

 

6.1                              Commencement of Interest Periods. The
first Interest Period shall commence on the Drawdown Date and each subsequent
Interest Period shall commence on the expiry of the preceding Interest Period.

 

6.2                              Duration of normal Interest Periods. Subject
to Clause 6.3, each Interest Period shall be:

 

(a)                                 1
(subject to a maximum of 3 Interest Periods of 1 month in any year), 3, 6, 9 or
12 months as notified by the Borrower to the Agent not later than 10.00 a.m.
(Copenhagen time) 3 Business Days before the commencement of the Interest
Period; or

 

(b)                                3
months, if the Borrower fails to notify the Agent by the time specified in
paragraph (a); or

 

(c)                                 such
other period as the Agent may, with the authorisation of all the Lenders, agree
with the Borrower,

 

Provided that while a Designated Transaction
continues, Interest Periods must be selected either (i) of the same
duration as the periods for which floating rates are determined under that
Designated Transaction as notified by the Borrower to the Agent prior to the
expiry of the preceding Interest Period or (ii) so that the notional
principal amount of a Designated Transaction will not at any time (taking into
account the scheduled amortisation) exceed the Loan as reducing from time to
time pursuant to Clause 8.1.

 

6.3                              Duration of Interest Periods for repayment instalments. In
respect of any scheduled payment due to be repaid under Clause 8 on a
particular Repayment Date, an Interest Period shall end on that Repayment Date.

 

7                                        DEFAULT INTEREST

 

7.1                              Payment of default interest on overdue amounts. The
Borrower shall pay interest in accordance with the following provisions of this
Clause 7 on any amount payable by the Borrower under any Finance Document which
the Agent, the Security Trustee 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

 

21

 

(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 19.4, the date
on which it became immediately due and payable.

 

7.2                              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 Agent to be 2.5 per cent. above:

 

(a)                                 in
the case of an overdue amount of principal, the higher of the rates set out at
Clauses 7.3(a) and 7.3(b); or

 

(b)                                in
the case of any other overdue amount, the rate set out at Clause 7.3(b).

 

7.3                              Calculation of default rate of interest. The
rates referred to in Clause 7.2 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); and

 

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

 

(i)                                    LIBOR; or

 

(ii)                                 if the Agent (after consultation with the
Reference Banks) determines that Dollar deposits for any such period are not
being made available to any Reference Bank by leading banks in the London
Interbank Market in the ordinary course of business, a rate from time to time
determined by the Agent by reference to the cost of funds to the Reference
Banks from such other sources as the Agent (after consultation with the
Reference Banks) may from time to time determine.

 

7.4                              Notification of interest periods and default rates. The
Agent shall promptly notify the Lenders, the Swap Banks and the Borrower of
each interest rate determined by the Agent under Clause 7.3 and of each period
selected by the Agent for the purposes of paragraph (b) of that Clause;
but this shall not be taken to imply that the Borrower is liable to pay such
interest only with effect from the date of the Agent’s notification.

 

7.5                              Payment of accrued default interest. Subject
to the other provisions of this Agreement, any interest due under this Clause
shall be paid on the last day of the period by reference to which it was
determined; and the payment shall be made to the Agent for the account of the
Creditor Party to which the overdue amount is due.

 

7.6                              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.

 

7.7                              Application to Master Agreements. For
the avoidance of doubt, this Clause 7 does not apply to any amount payable
under any Master Agreement in respect of any continuing Designated Transaction
as to which section 2(e) (Default Interest; Other Amounts) of the relevant
Master Agreement shall apply.

 

8                                        REPAYMENT, PREPAYMENT AND
CANCELLATION

 

8.1                              Amount of repayment instalments. The
Borrower shall repay the Loan by 20 consecutive quarterly instalments the first
4 such instalments to be in an amount of $12,000,000 each, the next 4 such
instalments to be in an amount of $10,000,000 each, the next 11 such
instalments to be in an amount of $6,000,000 each and a final instalment

 

22

 

to be in an amount
of $16,000,000; provided, that each such instalment is subject to reduction as
provided in Clause 8.11 hereof.

 

8.2                              Repayment Dates. The first instalment shall be
repaid on the date falling 3 months after the Drawdown Date and the last
instalment shall be repaid on the Maturity Date.

 

8.3                              Maturity Date. On the Maturity Date, the
Borrower shall additionally pay to the Agent for the account of the Creditor
Parties all other sums then accrued or owing under any Finance Document and any
Master Agreement.

 

8.4                              Voluntary prepayment. Subject
to the following conditions in Clauses 8.5 and 8.6, the Borrower may prepay the
whole or any part of the Loan at any time.

 

8.5                              Conditions for voluntary prepayment. The
conditions referred to in Clause 8.4 are that:

 

(a)                                 a
partial prepayment shall be $5,000,000 or a higher integral multiple of
$1,000,000;

 

(b)                                the
Agent has received from the Borrower at least 5 Business Days’ prior written
notice specifying the amount to be prepaid and the date on which the prepayment
is to be made;

 

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

 

(d)                                the
Borrower has complied with Clause 8.12 on or prior to the date of prepayment.

 

8.6                              Effect of notice of prepayment. A
prepayment notice may not be withdrawn or amended without the consent of the
Agent, given with the authorisation of the Majority Lenders, and the amount
specified in the prepayment notice shall become due and payable by the Borrower
on the date for prepayment specified in the prepayment notice.

 

8.7                              Notification of notice of prepayment. The
Agent shall notify the Lenders promptly upon receiving a prepayment notice, and
shall provide any Lender which so requests with a copy of any document
delivered by the Borrower under Clause 8.5(c).

 

8.8                              Mandatory prepayment and cancellation on sale or Total Loss. The
Borrower shall be obliged to prepay the relevant proportion (as defined below)
of the Loan if a Ship is sold or becomes a Total Loss:

 

(a)                                 in
the case of a sale, on or before the date on which the sale is completed by
delivery of the Ship to the buyer, or if the Borrower elects to exercise the
option referred to below, on or before the date falling 180 days after the date
on which the sale is completed by delivery of the Ship to the buyer; or

 

(b)                                in
the case of a Total Loss, on the earlier of the date falling 120 days after the
Total Loss Date and the date of receipt by the Security Trustee of the proceeds
of insurance relating to such Total Loss or, if the Borrower elects to exercise
the option referred to below, on or before the date falling 180 days after the
Total Loss Date.

 

The Borrower may, provided that no Potential Event
of Default or Event of Default has occurred and is continuing, elect to delay
the prepayment referred to in paragraphs (a) and (b) above from in
the case of (a) the date on which the sale is completed by delivery of the
Ship to the buyer or in the case of (b) the date falling 120 days after
the Total Loss Date by 180 days following the date on which the sale is
completed by delivery of the Ship to the buyer or 180 days following the Total
Loss Date (as the context requires) by providing, in the case of a sale,
written notice to the Agent at least 10 Business Days prior

 

23

 

to such sale and, in the case of a Total Loss
written notice to the Agent within 30 days following the occurrence of a Total
Loss.

 

If the Borrower elects to delay prepayment as set
out above, the relevant proportion (as defined below) of the sale proceeds or
insurance proceeds in relation to the sale or Total Loss of a Ship received
during the 180 day period following the date on which the sale is completed or
the Total Loss Date shall be paid to the Deposit Account (the “Pledged Cash”) and shall not be available to
the Borrower during the 180 days following the date on which the sale is
completed or Total Loss Date unless:

 

(i)                                    the Borrower requests in writing that the
Pledged Cash be applied to the next repayment instalment or instalments
specified in Clause 8.1 (in which case it will be so applied); or

 

(ii)                                 the Borrower requests in writing that the
Pledged Cash be applied in accordance with this Clause and Clause 8.11 (in
which case it will be so applied); or

 

(iii)                              the Borrower proposes a Replacement Ship
which (if the sold Ship or Ship which was the subject of a Total Loss was a
Facility Ship) is accepted by the Agent in writing and the Borrower and the
owner of the Replacement Ship have executed documents equivalent to the Finance
Documents relating to the Ship which was sold or which is subject to a Total
Loss in a form acceptable to the Agent and the Agent has received the necessary
legal opinions in respect of the new documents relating to the Replacement Ship
in which case the Pledged Cash will be released to the Borrower or to its
direction.

 

If the Ship being replaced by a Replacement Ship is
a Facility Ship, upon such replacement the Finance Documents shall be amended
so that the relevant Facility Ship is replaced by the Replacement Ship and if
the Ship being replaced by a Replacement Ship is a Collateral Ship, upon such
replacement the Finance Documents shall be amended so that the relevant
Collateral Ship is replaced by the Replacement Ship.

 

In this Clause 8.8, “relevant
proportion” means:

 

(A)                             if no Event of Default or Potential Event of
Default has occurred and is continuing, an amount equal to the Allocated Ship
Outstanding Amount as determined immediately prior to the sale or immediately
following the occurrence of the Total Loss in relation to the Ship which is
being sold or which is subject to a Total Loss; and

 

(B)                               if an Event of Default or Potential Event of
Default has occurred and is continuing, all sale proceeds and/or insurance
proceeds in relation to the Ship which is being sold or which is subject to a
Total Loss.

 

This Clause 8.8 is without prejudice to the
provisions of Clause 15.1 and for the avoidance of doubt, in the event that
paragraph (a) of the definition of relevant proportion applies the
difference between the sale proceeds and/or insurance proceeds in relation to
the sale or Total Loss of a Ship and the relevant proportion of the Loan shall
be freely available to the Borrower and upon the prepayment being made or the
relevant proportion of the Loan being paid to the Deposit Account in accordance
with this Clause any Security Interest in respect of the relevant Ship shall be
released.

 

In the event that the Borrower causes a Replacement
Ship to be provided and satisfies the conditions of paragraph (iii) above
with respect to such Replacement Ship, no mandatory prepayment will be required
under this Clause 8.8 in respect of the sale or Total Loss of the original
Ship.

 

24

 

8.9                              Amounts payable on prepayment. A
prepayment shall be made together with accrued interest (and any other amount
payable under Clause 21 or otherwise) in respect of the amount prepaid and, if
the prepayment is not made on the last day of an Interest Period, together with
any sums payable under Clause 21.2 but without further premium or penalty.

 

8.10                       No reborrowing. No amount repaid or prepaid may
be reborrowed.

 

8.11                       Application of partial prepayment. Any
partial voluntary prepayment made pursuant to Clause 8.4, shall be applied to
reduce the repayment instalments specified in Clause 8.1 in inverse order of
maturity or, in such other order as the Borrower and the Agent (acting with the
authorisation of the Majority Lenders) shall agree and any partial mandatory
prepayment made pursuant to Clause 8.8 (excluding paragraph (i) thereof)
shall be applied to reduce the repayment instalments specified in Clause 8.1
pro rata.

 

8.12                       Unwinding of Transactions. On or
prior to any partial repayment or prepayment of the Loan under this Clause 8 or
any other provision of this Agreement, the Borrower shall wholly or partially
reverse, offset, unwind or otherwise terminate one or more of the continuing
Transactions so that the notional principal aggregate amount of the continuing
Transactions thereafter remaining does not and will not in the future (taking
into account the scheduled amortisation) exceed the amount of the Loan as
reducing from time to time thereafter pursuant to Clause 8.1.

 

9                                        CONDITIONS PRECEDENT

 

9.1                              Documents, fees and no default. Each
Lender’s obligation to contribute to the Loan is subject to the following
conditions precedent:

 

(a)                                 that,
on or before the service of the Drawdown Notice, the Agent receives the
documents described in Part A of Schedule 3 in form and substance
satisfactory to the Agent and its lawyers;

 

(b)                                that,
on or before the Drawdown Date, the Agent receives all fees pursuant to the fee
letter or letters separately agreed between the Borrower and the Agent;

 

(c)                                 that,
on or before the Drawdown Date, the Agent receives or is satisfied that it will
receive the documents described in Part B of Schedule 3 in form and
substance satisfactory to the Lenders and their lawyers;

 

(d)                                that
both at the date of the Drawdown Notice and at the 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
10 and those of the Borrower or any Security Party which are set out in the
other Finance Documents would be true and not misleading if repeated on each of
those dates with reference to the circumstances then existing; and

 

(iii)                              none of the circumstances contemplated by
Clause 5.7 has occurred and is continuing.

 

9.2                              Waiver of conditions precedent. If the
Majority Lenders, at their discretion, permit the Loan to be borrowed before
certain of the conditions referred to in Clause 9.1 are satisfied and prior to
the disbursement of the Loan the Agent notifies the Borrower in writing which
conditions are not satisfied, the Borrower shall ensure that those conditions
are satisfied within 5 Business Days after the Drawdown Date (or such longer
period as the Agent may, with the authorisation of the Majority Lenders,
specify).

 

25

 

10                                 REPRESENTATIONS
AND WARRANTIES

 

10.1                       General.  The Borrower represents and warrants to each
Creditor Party as follows.

 

10.2                       Status.  The Borrower is duly incorporated and validly
existing under the laws of, and has the centre of its main interests in,
England.

 

10.3                       Share capital
and ownership.  The Borrower has an
authorised share capital of £10,000,000 divided into 10,000,000 ordinary shares
of £1 each, 8,204,314 of which shares have been issued fully paid in registered
form, and the beneficial ownership of all those issued shares is held by
Britannia Bulk Holdings plc, free of any Security Interest other than a pledge
in favour of Goldman Sachs Credit Partners, L.P. as security trustee pursuant
to a debenture dated 16 November 2007 and a shares charge dated 13 February 2008,
each of which will be discharged on the Drawdown Date.

 

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

 

(a)                                 to execute the
Finance Documents to which the Borrower is a party and the Master Agreements;
and

 

(b)                                to borrow under this
Agreement, to enter into Designated Transactions under the Master Agreements
and to make all the payments contemplated by, and to comply with, those Finance
Documents to which the Borrower is a party and the Master Agreements.

 

10.5                       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.

 

10.6                       Legal
validity; effective Security Interests. 
The Finance Documents to which the Borrower is a party and the Master
Agreements, 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 the
Borrower’s legal, valid and binding obligations enforceable against the
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 purport to create a Security Interest;

 

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

 

10.7                       No
third party Security Interests.  Without limiting the
generality of Clause 10.6, at the time of the execution and delivery of each
Finance Document purporting to grant a Security Interest:

 

(a)                                 the 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) in any
asset over which such Finance Document purports to grant a Security Interest.

 

10.8                       No
conflicts.  The execution by the Borrower of each Finance
Document to which it is a party and the Master Agreements, and the borrowing by
the Borrower of the Loan on the Drawdown Date to repay Existing Loans, and its
compliance with each Finance Document to which it is a party and the Master
Agreements will not involve or lead to a contravention of:

 

(a)                                 any law or
regulation; or

 

26

 

(b)                                the constitutional
documents of the Borrower; or

 

(c)                                 any contractual or
other obligation or restriction which is binding on the Borrower or any of its
assets (provided that the Existing Loans are paid in full on or before the
Drawdown Date).

 

10.9                       No withholding
tax.  All payments which the Borrower is liable to
make under the Finance Documents and the Master Agreements may be made without
deduction or withholding for or on account of any tax payable under any law of
any Pertinent Jurisdiction.

 

10.10                No
default.  No Event of Default or Potential Event of
Default has occurred which is continuing.

 

10.11                Information.  All material factual information which has
been provided in writing by or on behalf of the Borrower or any Security Party
to the Arrangers or any other Creditor Party in connection with any Finance
Document satisfied the requirements of Clause 11.5; all audited and unaudited
accounts which have been so provided satisfied the requirements of Clause 11.7;
and there has been no Material Adverse Change since the latest of those
accounts.

 

10.12                No
litigation.  No litigation, arbitration or administrative
proceedings involving the Borrower has been commenced or taken or, to the
Borrower’s knowledge, is likely to be commenced or taken which, in any case,
would be likely to result in a Material Adverse Change.

 

10.13                Compliance
with certain undertakings.  At the date of this
Agreement, the Borrower is in compliance with Clauses 11.4, 11.9 and 11.12.

 

10.14                Taxes
paid.  The Borrower has paid all taxes due and
payable that are applicable to, or imposed on or in relation to, the Borrower
and its business.

 

10.15                No money
laundering.  Without prejudice to the generality of Clause
2.3, in relation to the borrowing by the Borrower of the Loan, the performance
and discharge of its obligations and liabilities under the Finance Documents,
and the transactions and other arrangements affected or contemplated by the
Finance Documents to which it is a party, the Borrower confirms (i) that
it is acting for its own account and for that of the Owners; (ii) that it
will use the proceeds of the Loan for its own benefit and for that of the
Owners, under its full responsibility and exclusively for the purposes
specified in this Agreement; and (iii) that the foregoing will not involve
or lead to contravention of any law, official requirement or other regulatory
measure or procedure implemented to combat “money laundering” (as defined in Article 1
of the Directive (91/308/EEC) of the Council of the European Communities).

 

10.16                ISM Code and
ISPS Code compliance.  All requirements of
the ISM Code and the ISPS Code as they relate to the Borrower, the Owners, the
Approved Manager and the Ships have been, or will be, complied with at the time
of the Drawdown Date.

 

10.17                No immunity.  The Borrower is not, nor is any of its assets
entitled to immunity on the grounds of sovereignty or otherwise from any legal
action or proceeding (which shall include, without limitation, suit, attachment
prior to judgement, execution or other enforcement).

 

10.18                Filings.  Save for such registrations and filings as are referred to
in this Agreement and the Finance Documents it is not necessary for the
legality, validity, enforceability or admissibility in evidence of this
Agreement and the Finance Documents that any of them or any document relating
thereto be registered, filed, recorded or enrolled with any court

 

27

 

or authority in any
relevant jurisdiction or that stamp, registration or similar taxes be paid on
or in relation to this Agreement or any of the Finance Documents.

 

10.19                Conditions
precedent documentation.  All documents
provided or to be provided by the Borrower or any Security Party to any
Creditor Party pursuant to Schedule 3 are, or when provided shall be, true and
complete copies of such documents.

 

10.20                Solvency.  The Borrower is not insolvent or in liquidation or
administration or subject to any other insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous
officer has been appointed in respect of the Borrower or any part of its
assets.

 

10.21                Validity
and admissibility in evidence.  All authorisations, approvals,
submissions, consents, licences, exemptions, filings, notices, certifications or
registrations which are required or desirable:

 

(a)                                 to
enable the Borrower and each Owner lawfully to enter into, exercise its rights
and comply with its obligations in each Finance Document and each Master
Agreement to which it is a party;

 

(b)                                to make
each Finance Document and each Master Agreement to which the Borrower and each
Owner is a party admissible in evidence in its jurisdiction of incorporation,

 

have
been obtained or effected and are in full force and effect.

 

10.22                Tax
residence.  The Borrower is a resident, for
corporate tax purposes, in England.

 

11                                 GENERAL
UNDERTAKINGS

 

11.1                       General.  The Borrower undertakes with each Creditor
Party to comply with the following provisions of this Clause 11 at all times
during the Security Period except as the Agent may, with the authorisation of
the Majority Lenders, otherwise permit (such permission not to be unreasonably
withheld or delayed where relating to Clause 11.3).

 

11.2                       Title;
negative pledge.  The Borrower shall:

 

(a)                                 procure from and
after the Drawdown Date and unless a Ship is sold in compliance with this
Agreement that each Owner shall hold the legal title to, and own the entire
beneficial interest in the Ship or Ships (as the case may be) owned by that
Owner, its Earnings and Insurances, free from all Security Interests and other
interests and rights of every kind, except for (i) those created by the
Finance Documents and the effect of assignments contained in the Finance
Documents, (ii) Permitted Security Interests, (iii) the ENFORCER II
Purchase Option, (iv) those of a purchaser under a MOA regarding the
purchase of a Ship, and (v) those of a charter party under charter
arrangements permitted under the Finance Documents; and

 

(b)                                procure that its
liabilities under the Finance Documents and the Master Agreements to which it is a
party do and will rank at least pari passu with all its other present and
future unsecured liabilities, except for liabilities which are mandatorily
preferred by law.

 

11.3                       Disposal
of assets.  The Borrower will not transfer, lease or
otherwise dispose of all or substantially all of its assets, whether by one
transaction or a number of transactions, whether related or not except in the
usual course of its business and for fair market value payable in cash on
completion of the relevant transaction(s).

 

11.4                       Maintenance
of ownership of Owners.  The Borrower shall
remain the legal and direct beneficial owner of the entire issued and allotted
share capital of each Owner free of any Security Interest.

 

28

 

11.5                       Information
provided to be accurate.  All factual
information (other than information under Clause 11.7) which is provided in
writing by or on behalf of the Borrower or any Security Party under or in
connection with any Finance Document will be true in all material respects and
not misleading in any material respect and will not omit any material fact
necessary to make the statements therein not misleading.

 

11.6                       Provision
of financial statements.  The Borrower will
send to the Agent:

 

(a)                                 as soon as possible,
but in no event later than 45 days after the end of each of the first 3
financial quarters of the Borrower’s financial year and in no event later than
90 days after the fourth financial quarter of the Borrower, the unaudited
individual balance sheets and statements of income and loss of the Borrower;

 

(b)                                if requested, on a
monthly basis, a report in a form satisfactory to the Agent and signed by the
chief financial officer of the Borrower detailing exposures between forward
freight agreements, cargo contracts and vessels on time charter in relation to
vessels owned by the Borrower or any of its subsidiaries.

 

11.7                       Form of
financial statements.  All accounts
delivered under Clause 11.6(a) will:

 

(a)                                 be prepared in
accordance with all applicable laws and GAAP consistently applied (subject to
the absence of footnotes on interim statements);

 

(b)                                fairly present in all
material respects the financial condition of the Borrower at the date of those
accounts and of its income or loss for the period to which those accounts
relate (subject to year end adjustments in the case of interim statements); and

 

(c)                                 fully disclose or
provide for all significant liabilities of the Borrower required to be
disclosed in such accounts in accordance with GAAP (subject to year end
adjustments in the case of interim statements).

 

11.8                       Creditor
notices.  The Borrower will send the Agent, at the same
time as they are despatched, copies of all material communications which are
despatched to all of the Borrower’s creditors or to the whole of any class of
them.

 

11.9                       Consents.  The Borrower will (or procure that the
relevant Owner shall in the case of paragraph (c)) maintain in force and
promptly obtain or renew, and will promptly send certified copies to the Agent
of, all consents required:

 

(a)                                 for the Borrower to
perform its obligations under any Finance Document to which it is a party or
the Master Agreements;

 

(b)                                for the validity or
enforceability of any Finance Document to which it is a party or the Master
Agreements;

 

(c)                                 for each Owner to
continue to own and operate the Ship or Ships owned by it;

 

and the Borrower
will comply (or procure compliance) with the terms of all such consents.

 

11.10                Maintenance
of Security Interests.  The Borrower will:

 

(a)                                 at its own cost, do
all that it reasonably can to ensure that any Finance Document to which it is a
party validly creates the obligations which it purports to create; and

 

(b)                                without limiting the
generality of paragraph (a), at its own cost, promptly register, file, record
or enrol any Finance Document to which it is a party with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or similar
tax in all Pertinent

 

29

 

Jurisdictions in
respect of any Finance Document to which it is a party, give any notice or take
any other step which, in the opinion of the Majority Lenders, is or has become
necessary or desirable for any Finance Document to which it is a party to be
valid, enforceable or admissible in evidence or to ensure or protect the
priority of any Security Interest which it creates.

 

11.11                Notification
of litigation.  The Borrower will provide the Agent with
details of any legal or administrative action involving the Borrower, any
Security Party, the Approved Manager or any Ship or the Earnings or the
Insurances as soon as such action is instituted or it becomes apparent to the
Borrower that it is likely to be instituted, unless the legal or administrative
action could not reasonably be considered material in the context of any
Finance Document or any Master Agreement.

 

11.12                Principal
place of business.  The Borrower will maintain its principal
place of business, and keep its corporate documents and records, at the address
stated in Clause 28.2; provided, that the Borrower may change such address with
30 days prior written notice to the Agent. 
The Borrower will not establish, or do anything as a result of which it
would be deemed to have, a place of business in any country other than England
and Denmark.

 

11.13                Confirmation of
no default.  The Borrower will, within 2 Business Days
after service by the Agent of a written request, serve on the Agent a notice
which is signed by 2 directors (in their capacity as directors and not in a
personal capacity) of the Borrower and which:

 

(a)                                 states that such
directors have no knowledge that any Event of Default or Potential Event of
Default has occurred; or

 

(b)                                states that such
directors have no knowledge that any Event of Default or Potential Event of
Default has occurred, except for a specified event or matter, of which all
material details are given.

 

The Agent may serve requests under this
Clause 11.13 from time to time but only if asked to do so by a Lender or
Lenders having Contributions exceeding 20 per cent. of the Loan or (if the Loan
has not been made) Commitments exceeding 20 per cent of the Total Commitments;
and this Clause 11.13 does not affect the Borrower’s obligations under Clause
11.14.

 

11.14                Notification
of default.  The Borrower will notify the Agent as soon as
the Borrower becomes aware of:

 

(a)                                 the occurrence of an
Event of Default or 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 keep the
Agent fully up-to-date with all developments.

 

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

 

(a)                                 to the Borrower, any
Owner, the Ships, the Earnings or the Insurances; or

 

(b)                                to any other matter
relevant to, or to any provision of, a Finance Document or a Master Agreement,

 

which may be requested by the Agent
(including, upon request through the Agent, from the Security Trustee, any
Lender or any Swap Bank) acting reasonably at any time and if

 

30

 

reasonably required on a regular basis such
information to be provided at intervals to be agreed at any such time.

 

11.16                Access to books
and records.  The Borrower shall permit one or more
representatives of the Agent, at the request of the Agent, to have reasonable
access to its books and records and to inspect the same during normal business
hours at its offices upon reasonable prior written notice.

 

11.17                Provision
of copies and translation of documents. 
The Borrower will supply the Agent with a sufficient number of copies of
the documents referred to above to provide 1 copy for each Creditor Party
together with, whenever necessary, a certified English translation prepared by
a translator approved by the Agent.

 

11.18                “Know your
customer” checks.  If:

 

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

 

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

 

(c)                                 a proposed assignment
or transfer by a Lender of any of its rights and obligations under this
Agreement to a party that is not a Lender prior to such assignment or transfer,

 

obliges the Agent or any Lender (or, in the case
of paragraph (c)), any prospective new Lender) to comply with “know your
customer” or similar identification procedures in circumstances where the
necessary information is not already available to it, the Borrower shall
promptly upon the request of the Agent or the Lender concerned supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself or on behalf of any Lender) or the Lender
concerned (for itself or, in the case of the event described in paragraph (c),
on behalf of any prospective new Lender) in order for the Agent, the Lender
concerned or, in the case of the event described in paragraph (c), any
prospective new Lender to carry out and be satisfied it has complied with all
necessary “know your customer” or other similar checks under all applicable
laws and regulations pursuant to the transactions contemplated in the Finance
Documents.

 

11.19                Transactions
under the Master Agreements.  The Borrower will not
enter into any Transaction pursuant to a Master Agreement except Designated
Transactions.

 

12                                 CORPORATE
UNDERTAKINGS

 

12.1                       General.  The Borrower also undertakes with each
Creditor Party to comply with the following provisions of this Clause 12 at all
times during the Security Period except as the Agent may, with the
authorisation of the Majority Lenders, otherwise permit (such permission not to
be unreasonably withheld or delayed in the case of Clause 12.3(a)(i) or
12.3(a)(ii)).

 

12.2                       Maintenance of
status.  The Borrower will maintain its separate
corporate existence and remain in good standing under the laws of, and the
centre of its main interests in, England.

 

12.3                       Negative
undertakings.

 

(a)                                 The
Borrower will not (and in the case of paragraph (i) shall procure that its
subsidiaries will not):

 

31

 

(i)                                    engage in any business other than the provision
of drybulk
shipping and maritime logistics services and businesses which are reasonably
related or incidental thereto;

 

(ii)                                 enter into any form of amalgamation, merger or de-merger or any form
of reconstruction or reorganisation unless after giving effect thereto, (A) the
surviving entity is a wholly-owned direct or indirect subsidiary of the
Shareholder Guarantor (or is the Shareholder Guarantor), (B) the surviving
entity (if not the Borrower) has succeeded to all obligations of the Borrower
under the Finance Documents and Master Agreements, and (C) no Event of
Default or Potential Event of Default has occurred which is continuing; or

 

(iii)                              from and after the Drawdown Date pay any dividend or make any other
form of distribution to its shareholders or effect any form of redemption,
purchase or return of share capital if an Event of Default or Potential Event
of Default has occurred and is continuing; and

 

(b)                                The Borrower will
procure that the Owners do not:

 

(i)                                    engage in any business other than (A) the ownership,
chartering, operation and disposition of the Ship or Ships (as the case may
be), (B) execution, delivery and performance of the Finance Documents to
which they are a party, and (C) activities necessary or incidental to the
foregoing;

 

(ii)                                 from and after the Drawdown Date, pay any dividend or make any other
form of distribution to their shareholders or effect any form of redemption,
purchase or return of share capital if an Event of Default or Potential Event
of Default has occurred and is continuing;

 

(iii)                              from and after the Drawdown Date and except for dividends or
distributions permitted by paragraph (ii) above and loans and advances
made if no Event of Default or Potential Event of Default has occurred which is
continuing, provide any form of credit or financial assistance to:

 

(A)                             a person who is directly or indirectly interested in its share or
loan capital; or

 

(B)                               any company in or with which such a person is directly or indirectly
interested or connected,

 

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

 

(iv)                             issue, allot or grant any person other than to the Borrower a right
to any shares in its capital or repurchase or reduce its issued share capital;

 

(v)                                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; or

 

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

 

12.4                       Subordination
of rights of Borrower.  From and after the
Drawdown Date, all rights which the Borrower at any time has (whether in
respect of the on-lending of the Loan or any other transaction) against any
Owner or the Shareholder Guarantor or any of their assets shall be fully
subordinated to the rights of the Creditor Parties under the Finance

 

32

 

Documents and Master
Agreements; and in particular, the Borrower shall not during the Security
Period:

 

(a)                                 claim,
or in a bankruptcy of any Owner of the Shareholder Guarantor prove for, any
amount payable to the Borrower by any Owner or the Shareholder Guarantor,
whether in respect of the on-lending of the Loan or any other transaction;

 

(b)                                take or enforce any
Security Interest for any such amount;

 

(c)                                 claim to set-off any
such amount against any amount payable by the Borrower to any Owner or the
Shareholder Guarantor; or

 

(d)                                claim any subrogation
or other right in respect of any Finance Document or any Master Agreement or
any sum received or recovered by any Creditor Party under a Finance Document or
any Master Agreement,

 

Provided that this Clause 12.4
shall not prohibit the Borrower from receiving payment or performance in
respect of any such right in the absence of any continuing Event of Default or
Potential Event of Default.

 

13                                 INSURANCE

 

13.1                       General.  The Borrower also undertakes with each
Creditor Party to comply with the following provisions of Clause 13 beginning
on the Drawdown Date and continuing at all times during the remainder of the
Security Period and, as applicable, to procure that the Owners shall comply
with the provisions except in each case as the Agent may, with the
authorisation of the Majority Lenders, otherwise permit.

 

13.2                       Maintenance
of obligatory insurances.  The Borrower shall
procure that each Owner shall keep the Ship or Ships (as the case may be) owned
by it, insured at its expense against:

 

(a)                                 fire and usual marine
risks (including hull and machinery and excess risks) but on the basis that the
hull and usual marine risks cover (excluding increased value and freight
interest cover) shall not be less than 80 per cent. of the Fair Market Value of
the Ship;

 

(b)                                war risks (including
the London blocking and trapping addendum or equivalent coverage and including
war and terrorism risks excluded from the protection and indemnity risks
coverage);

 

(c)                                 protection and
indemnity risks (including pollution risks), on “full entry terms” to be in
accordance with the rules of the protection and indemnity association and
the members terms of entry; and

 

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

 

13.3                       Terms
of obligatory insurances.  The Borrower shall
procure that each Owner shall, effect such insurances in respect of the Ship or
Ships (as the case may be) owned by it:

 

(a)                                 in Dollars;

 

(b)                                in the case of fire
and usual marine risks and war risks in relation to the Facility Ships, in an
amount on an agreed value basis at least the greater of (i) when
aggregated with such insurances on the other Facility Ships which are subject
to a Mortgage, 120 per cent. of

 

33

 

the aggregate of the
Allocated Ship Amount and (ii) the Fair Market Value of that Facility
Ship;

 

(c)                                 in the case of fire
and usual marine risks and war risks in relation to each Collateral Ship, in an
amount on an agreed value basis of the Fair Market Value of that Collateral
Ship;

 

(d)                                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 a protection and indemnity association belonging to the
International Group of Protection and Indemnity Associations;

 

(e)                                 in relation to
protection and indemnity risks in respect of the Ship’s full tonnage;

 

(f)                                   on approved terms;
and

 

(g)                                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.

 

13.4                       Further
protections for the Creditor Parties. 
In addition to the terms set out in Clause 13.3, the Borrower shall
procure that the obligatory insurances shall:

 

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

 

(b)                                name the Security
Trustee as loss payee with such directions for payment as the Security Trustee
may specify;

 

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

 

(d)                                provide that such
obligatory insurances shall be primary without right of contribution from other
insurances which may be carried by the Security Trustee or any other Creditor
Party; and

 

(e)                                 provide that the
Security Trustee may make proof of loss if the relevant Owner fails to do so.

 

13.5                       Renewals of
obligatory insurances.  The Borrower shall
ensure that:

 

(a)                                 at least 14 days
before the expiry of any obligatory insurance effected by each Owner:

 

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

 

(ii)                                 obtain the Agent’s approval to the matters referred to in paragraph
(i);

 

(b)                                at least 7 days
before the expiry of any obligatory insurance, renew that obligatory insurance
in accordance with the Agent’s approval pursuant to paragraph (a); and

 

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

 

34

 

13.6                       Copies
of policies; letters of undertaking. 
The Borrower shall ensure that all approved brokers provide the Security
Trustee with pro forma copies of all policies relating to the obligatory
insurances which they are to effect or renew and of a letter or letters of
undertaking in a form required by the Security Trustee 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 13.4;

 

(b)                                they will hold such
policies, and the benefit of such insurances, to the order of the Security
Trustee in accordance with the said loss payable clause;

 

(c)                                 they will advise the
Security Trustee immediately of any material change to the terms of the
obligatory insurances;

 

(d)                                they will notify the
Security Trustee, not less than 7 days before the expiry of the obligatory
insurances, in the event of their not having received notice of renewal
instructions from the relevant Owner or its agents and, in the event of their
receiving instructions to renew, they will promptly notify the Security Trustee
of the terms of the instructions; and

 

(e)                                 they will not set off
against any sum recoverable in respect of a claim relating to a Ship 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 the Ship forthwith
upon being so requested by the Security Trustee.

 

13.7                       Copies
of certificates of entry.  The Borrower shall
ensure that any protection and indemnity and/or war risks as covered by the
protection and indemnity associations club rules in which each Ship is
entered provides the Security Trustee with:

 

(a)                                 a copy of the
certificate of entry for the Ship;

 

(b)                                a letter or letters
of undertaking in such form as may be required by the Security Trustee;

 

(c)                                 where required to be
issued under the terms of insurance/indemnity provided by that Owner’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 Owner in relation to that Ship in accordance with the requirements
of such protection and indemnity association; and

 

(d)                                a 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 the Ship.

 

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

 

13.9                       Payment
of premiums.  The Borrower shall ensure that all premiums
or other sums of money from time to time due in respect of any obligatory
insurances are paid in full and produce all relevant receipts when so required
by the Security Trustee.

 

13.10                Guarantees.  The Borrower shall arrange for the execution
and delivery of all guarantees and indemnities as may from time to time be
required by any Ship’s P&I Club or war

 

35

 

risks association and shall ensure that these
are promptly issued and remain in full force and effect.

 

13.11                Compliance
with terms of insurances.  The Borrower shall
neither do nor omit to do (nor permit to be done or not to be done) any act or
thing which would or might render any obligatory insurance in relation to any
Ship invalid, void, voidable or unenforceable or render any sum payable under
an obligatory insurance repayable in whole or in part; and, in particular:

 

(a)                                 the Borrower shall
procure that each Owner shall (in the case of the Ship or Ships (as the case
may be) owned by it), 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 13.6(c))
ensure that the obligatory insurances are not made subject to any exclusions or
qualifications to which the Security Trustee has not given its prior approval;

 

(b)                                the Borrower shall
procure that no Owner shall (in the case of the Ship or Ships (as the case may
be) owned by it), make any changes relating to the classification or
classification society or manager or operator of the Ship approved by the
underwriters of the obligatory insurances;

 

(c)                                 the Borrower shall
procure that each Owner shall (in the case of the Ship or Ships (as the case
may be) owned by it), make (and promptly supply copies to the Agent of) all
quarterly or other voyage declarations which may be required by the protection
and indemnity risks association in which the Ship 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)                                the Borrower shall
procure that no Owner shall (in the case of the Ship or Ships (as the case may
be) owned by it), employ the Ship, 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.

 

13.12                Alteration
to terms of insurances.  The Borrower will
procure that no Owner shall either make or agree to make any alteration to the
terms of the obligatory insurance nor waive any right relating to any
obligatory insurance.

 

13.13                Settlement
of claims.  The Borrower shall (a) procure that no
Owner shall, in the case of the Ship or Ships (as the case may be) owned by it,
(i) during the continuation of any Potential Event of Default or Event of
Default, settle, compromise or abandon any claim under any obligatory insurance
for a Total Loss or for a Major Casualty, and (ii) in the case of a Total
Loss, settle or compromise any claim under any obligatory insurance for an
amount less than the amount of any mandatory prepayment required in connection
therewith under Clause 8.8, and (b) do all things necessary and provide
all documents, evidence and information to enable the Security Trustee to
receive any moneys which at any time become payable in respect of the
obligatory insurances.

 

13.14                Provision
of copies of communications.  The Borrower shall
procure that each Owner (in respect of the Ship or Ships (as the case may be)
owned by it) shall provide the Security Trustee, at the time of each such
communication, copies of all written communications between that Owner and:

 

(a)                                 the approved brokers;

 

(b)                                the approved
protection and indemnity and/or war risks associations; and

 

36

 

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

 

(i)                                    the relevant Owner’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 the relevant Owner and any of
the persons referred to in paragraphs (a) or (b) relating wholly or
partly to the effecting or maintenance of the obligatory insurances.

 

13.15                Provision
of information.  The Borrower shall promptly provide the
Security Trustee (or any persons which it may designate) with any information
which the Security Trustee (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 13.15
or dealing with or considering any matters relating to any such insurances;

 

and the Borrower shall, within 5 Business
Days following demand, indemnify the Security Trustee in respect of all
reasonable, out-of-pocket fees and other expenses incurred by or for the
account of the Security Trustee in connection with any such report as is referred
to in paragraph (a).

 

13.16                Mortgagee’s
interest and additional perils insurances. 
The Security Trustee shall maintain and renew all or any of the
following insurances in such amounts (but not exceeding 110 per cent. of the
Loan (at the time such insurance is taken out and then annually when any such
insurance is reviewed thereafter) in the case of a mortgagee’s interest marine
insurance and 110 per cent. of the Loan (at the time such insurance is taken
out and then annually when any such insurance is reviewed thereafter) in the
case of a mortgagee’s additional perils policy), on such terms, through such
insurers and generally in such manner as the Security Trustee may from time to
time consider appropriate:

 

(a)                                 a mortgagee’s
interest marine insurance providing for the indemnification of the Creditor
Parties for any losses under or in connection with any Master Agreement or any
Finance Document which directly or indirectly result from loss of or damage to
any Ship or a liability of any Ship or of any Owner, being a loss or damage
which is prima facie covered by an obligatory insurance but in respect of which
there is a non-payment (or reduced payment) by the underwriters by reason of,
or on the basis of an allegation concerning:

 

(i)                                    any act or omission on the part of any Owner, of any operator,
charterer, manager or sub-manager of any Ship or of any officer, employee or
agent of any Owner or of any such person, including any breach of warranty or
condition or any non-disclosure relating to such obligatory insurance;

 

(ii)                                 any act or omission, whether deliberate, negligent or accidental, or
any knowledge or privity of any Owner, any other person referred to in
paragraph (i) above, or of any officer, employee or agent of any Owner or
of such a person, including the casting away or damaging of any Ship and/or any
Ship being unseaworthy; and/or

 

(iii)                              any other matter capable of being insured against under a mortgagee’s
interest marine insurance policy whether or not similar to the foregoing; and

 

37

 

(b)                                a mortgagee’s
interest additional perils policy providing for the indemnification of the
Creditor Parties against, among other things, any possible losses or other
consequences of any Environmental Claim, including the risk of expropriation,
arrest or any form of detention of any Ship, or the imposition of any Security
Interest over any Ship and/or any other matter capable of being insured against
under a mortgagee’s interest additional perils policy;

 

and the Borrower shall upon demand fully
indemnify the Security Trustee in respect of all premiums and other reasonable
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;

 

Provided that any such insurance taken out by the Security Trustee shall be comparable
in coverages and premium with the insurance policies required by the Security
Trustee for other similarly situated borrowers.

 

13.17                Review
of insurance requirements.  The Agent shall be
entitled to review the requirements of this Clause 13 from time to time in
order to take account of any changes in circumstances after the date of this
Agreement which, in the reasonable opinion of the Agent, are significant and
capable of affecting the Owners (or any of them) or the Ships (or any of them)
and its or their insurance (including, without limitation, changes in the
availability or the cost of insurance coverage or the risks to which the Owners
(or any of them) may be subject).

 

13.18                Modification
of insurance requirements.  The Agent shall
notify the Borrower of any proposed modification which the Agent reasonably
considers appropriate in the circumstances and after a review conducted under
Clause 13.18 and, after consultation with the Borrower, such modification shall
take effect on and from the date it is notified in writing to the Borrower as
an amendment to this Clause 13 and shall bind the Borrower accordingly.

 

13.19                Compliance with
mortgagee’s instructions. The Security Trustee shall be entitled (without prejudice
to or limitation of any other rights which it may have or acquire under any
Finance Document) to require any Ship to remain at any safe port or to proceed
to and remain at any safe port designated by the Security Trustee until the
relevant Owner implements any amendments to the terms of the obligatory
insurances and any operational changes required as a result of a notice served
under Clause 13.18 and the Borrower shall procure that the relevant Owner
complies with any such requirement.

 

13.20                Danish Ships.  The insurance provisions in this Clause 13
which relate to the Collateral Ships shall prevail in the case of any
inconsistency with the insurance provisions in the mortgage in respect of the
Collateral Ships which is the subject of the Pledge of Mortgage.

 

14                                 SHIP
COVENANTS

 

14.1                       General.  The Borrower also undertakes with each Creditor Party to
comply with the provisions of this Clause 14 beginning on the Drawdown Date and
continuing at all times during the remainder of the Security Period and, as
applicable, to procure that the Owners shall comply with the provisions of this
Clause 14 in each case except as the Agent may, with the authorisation of the
Majority Lenders, otherwise permit (such permission not to be unreasonably
withheld or delayed in the case of Clauses 14.2, 14.3(b) and 14.13(c),
14.13(e) and 14.13(f)).

 

14.2                       Ship’s
name and registration.  The Borrower shall
procure that each Owner shall keep the Ship or Ships (as the case may be) owned
by it registered in its name on the flag indicated in Schedule 5 and Schedule
6; shall not do, omit to do or allow to be done

 

38

 

anything as a result
of which such registration might be cancelled or imperilled; and shall not
change the name or port of registry of any Ship.

 

14.3                       Repair
and classification.  The Borrower shall
procure that each Owner shall keep the Ship or Ships (as the case may be) 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
that Ship’s class free of overdue recommendations and conditions affecting that
Ship’s class with its Classification Society; and

 

(c)                                 so as to comply with
all laws and regulations applicable to vessels registered in the jurisdiction
in which the Ship is registered, 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.

 

14.4                       Classification
Society undertaking. The Borrower shall procure that each Owner shall instruct
the Classification Society of the Ship or Ships (as the case may be) owned by
it to do all or any of the following at any time after the occurrence of a
Potential Event of Default or an Event of Default which is continuing (and
procure that the Classification Society undertakes with the Agent at such
time):

 

(a)                                 to send to the Agent,
following receipt of a written request from the Agent, certified true copies of
all original class records held by the Classification Society in relation to
that Ship or Ships;

 

(b)                                to allow the Agent
(or its agents), at any time and from time to time, to inspect the original
class and related records of that Owner and that Ship or Ships at the offices
of the Classification Society and to take copies of them;

 

(c)                                 to notify the Agent
immediately in writing if the Classification Society:

 

(i)                                    receives notification from that Owner or any person that that Ship’s
or Ships’ Classification Society is to be changed; or

 

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

 

(d)                                following receipt of
a written request from the Agent:

 

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

 

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

 

14.5                       Modification.  The Borrower shall procure that no Owner
shall (in the case of the Ship or Ships (as the case may be) owned by it), make
any modification or repairs to, or replacement of, the Ship or equipment
installed on it which would or might materially and adversely alter the
structure, type or performance characteristics of the Ship or materially reduce
its value.

 

39

 

14.6                       Removal
of parts.  The Borrower shall procure that no Owner
shall (in the case of the Ship owned by it), remove any material part of the
Ship, or any material item of equipment installed on the Ship, except in the
normal course of maintenance and repair, 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 Security Trustee
and becomes on installation on the Ship the property of the relevant Owner and
subject to the security constituted by the relevant Mortgage (and also the Deed
of Covenant in the case of the “ENFORCER II”) Provided
that an Owner may install equipment owned by a third party if the
equipment can be removed without any risk of damage to the Ship concerned.

 

14.7                       Surveys.  The Borrower shall procure that each Owner
shall (in the case of the Ship owned by it), submit the Ship regularly to such
periodical or other surveys which may be required for that Ship’s
classification purposes and shall comply before the expiry of any grace periods
with all conditions and recommendations affecting that Ship’s class of the
relevant Classification Society in accordance with their terms unless waived
and if so required by the Agent shall provide the Agent with copies of all
survey reports.

 

14.8                       Inspection.  The Borrower shall procure that each Owner
shall permit the Agent (by surveyors or other persons appointed by it for that
purpose) to board the Ship or Ships (as the case may be) owned by it at any time
(but in any event without interfering with the ordinary trading of that Ship or
those Ships), subject to receiving reasonable prior notice from the Agent, to
inspect her or their condition or to satisfy themselves about proposed or
executed repairs and shall afford all proper facilities for such inspections Provided that:

 

(a)                                 so long as no Event
of Default or Potential Event of Default shall have occurred and be continuing;
and

 

(b)                                the relevant Ship is
found to be in a satisfactory condition in accordance with Clause 14.3 of the
terms of this Agreement,

 

the Borrower shall not be obliged to pay any
fees and expenses in respect of more than one inspection of each Ship in any
calendar year.

 

14.9                       Prevention
of and release from arrest.  The Borrower shall
procure that each Owner shall (in the case of the Ship or Ships (as the case
may be) owned by it), promptly discharge before the same becomes overdue
(unless being contested in good faith by appropriate proceedings promptly
instituted and diligently pursued where appropriate reserves have been
established):

 

(a)                                 all liabilities which
give or may give rise to maritime or possessory liens on or claims enforceable
against the Ship, its Earnings or the Insurances in relation to that Ship;

 

(b)                                all taxes, dues and
other amounts charged in respect of the Ship, its Earnings or the Insurances in
relation to that Ship; and

 

(c)                                 all other outgoings
whatsoever in respect of the Ship, its Earnings or the Insurances in relation
to that Ship;

 

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

 

14.10                Compliance
with laws etc.  The Borrower shall procure that each Owner
shall:

 

40

 

(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 or Ships (as the case may be)
owned by it, its ownership, operation and management or to the business of the
Owner;

 

(b)                                not employ the Ship
or Ships (as the case may be) owned by it nor allow its employment in any
manner contrary to any law or regulation in any relevant jurisdiction including
but not limited to the ISM Code or 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 or Ships (as the case may be) owned by it to enter or
trade to any zone which is declared a war zone by any government or by the war
risks insurers of the Ship or Ships (as the case may be) owned by it unless the
Borrower has (at its expense) effected any special, additional or modified
insurance cover.

 

14.11                Provision
of information.  The Borrower shall procure that each Owner
shall (in the case of the Ship or Ships (as the case may be) owned by it),
promptly provide the Agent with any information which it requests regarding:

 

(a)                                 the Ship, its
employment, position and engagements;

 

(b)                                the Earnings and
payments and amounts due to the Ship’s master and crew;

 

(c)                                 any expenses
incurred, or likely to be incurred, in connection with the operation,
maintenance or repair of the Ship and any payments made in respect of the Ship;

 

(d)                                any towages and
salvages;

 

(e)                                 the Owner’s, the
Approved Manager’s or the Ship’s compliance with the ISM Code and/or the ISPS
Code,

 

and, upon the Agent’s request, provide copies
of any current charter relating to the Ship and of any current charter
guarantee and copies of the Ship’s Safety Management Certificate and/or the
relevant Owner’s or the Approved Manager’s Document of Compliance.

 

14.12                Notification
of certain events.  The Borrower (or the relevant Owner as the
case may be) shall promptly upon becoming aware of any of the following notify
the Agent by fax, confirmed forthwith 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 a Ship 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 complied with in accordance with its terms;

 

(d)                                any arrest or
detention of a Ship, any exercise or purported exercise of any lien on any Ship
or its Earnings or any requisition of a Ship for hire;

 

(e)                                 any intended dry
docking of a Ship other than a routine dry docking;

 

(f)                                   any Environmental
Claim made against the Borrower or an Owner or in connection with a Ship, or
any Environmental Incident;

 

(g)                                any claim for breach
of the ISM Code or the ISPS Code being made against an Owner, an Approved
Manager or otherwise in connection with a Ship; or

 

41

 

(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 the Borrower (or the relevant Owner as
the case may be) shall keep the Agent advised in writing on a regular basis and
in such detail as the Agent shall require of the Owner’s, the Approved Manager’s
or any other person’s response to any of those events or matters.

 

14.13                Restrictions
on chartering, appointment of managers etc. 
The Borrower shall procure that no Owner shall (in the case of the Ship
or Ships (as the case may be) owned by it):

 

(a)                                 let the Ship on
demise charter for any period;

 

(b)                                enter into any time
or consecutive voyage charter in respect of the Ship for a term which exceeds,
or which by virtue of any optional extensions may exceed, 24 months;

 

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

 

(d)                                charter the Ship
otherwise than on bona fide arm’s length terms at the time when the Ship is
fixed;

 

(e)                                 charter in any ship;

 

(f)                                   appoint a manager of
the Ship other than the Approved Manager or agree to any alteration to the
terms of the Approved Manager’s appointment;

 

(g)                                deactivate or lay up
the Ship; or

 

(h)                                put the Ship into the
possession of any person for the purpose of work being done upon it in an
amount exceeding or likely to exceed $1,000,000 (or the equivalent in any other
currency) unless either:

 

(i)                                    that person has first given to the Security Trustee and in terms
satisfactory to it a written undertaking not to exercise any lien on that Ship
or its Earnings for the cost of such work or for any other reason; or

 

(ii)                                 the cost of such work is covered by insurances; or

 

(iii)                              the Borrower establishes to the reasonable satisfaction of the Agent
that it has sufficient funds to pay for the cost of such work.

 

14.14                Charter
Assignments.  At any time during
the Security Period, in relation to any charter or other contract of employment
of any Ship which is equal to or exceeds 24 months in duration (excluding those
entered into prior to the date of this Agreement which have a remaining term of
less than 24 months as of the date of this Agreement), the Borrower shall
procure that promptly following the Agent’s request the Owner which owns such
Ship shall execute and deliver to the Security Trustee a Charter Assignment and
shall give notice of such assignment to the charterer concerned and shall
endeavour to procure that an acknowledgement of such notice is signed and
returned to the Security Trustee.

 

14.15                Notice
of Mortgage.  The Borrower shall procure that each Owner
shall (in the case of the Ship or Ships (as the case may be) owned by it), keep
the relevant Mortgage registered against the relevant Ship as a valid first
preferred or priority (as the case may be) mortgage, carry on board the 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 the Ship a framed
printed notice stating that the Ship is mortgaged by the relevant Owner to the
Security Trustee.

 

42

 

14.16                Sharing of
Earnings.  The Borrower will procure that no Owner shall
(in the case of the Ship or Ships (as the case may be) owned by it):

 

(a)                                 enter into any
agreement or arrangement for the sharing of any Earnings; or

 

(b)                                enter into any
agreement or arrangement for the release of, or adverse alternation to, any
guarantee or Security Interest relating to any Earnings.

 

14.17                ISPS Code.  The Borrower shall procure that each Owner
shall (in the case of the Ship or Ships (as the case may be) owned by it)
comply with the ISPS Code and in particular, without limitation, shall:

 

(a)                                 procure that the Ship
and the company responsible for the Ship’s compliance with the ISPS Code comply
with the ISPS Code; and

 

(b)                                maintain for the Ship
an ISSC; and

 

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

 

14.18                Danish Ships.  The Ship covenants in this Clause 14 which
relate to the Collateral Ships shall prevail in the case of any inconsistency
with the provisions in the mortgage in respect of the Collateral Ships which is
the subject of the Pledge of Mortgage.

 

15                                 SECURITY
COVER

 

15.1                       Minimum
required security cover.  Clause 15.2 applies
if the Agent notifies the Borrower that:

 

(a)                                 the aggregate of the
Fair Market Values of each of NAVIGATOR II, ENDEAVOUR II, ENDURANCE II, ICE
TRADER II and ICE POWER II (but excluding any of the foregoing that has been
the subject of a sale or Total Loss and including any Replacement Ship for any
of the foregoing); plus

 

(b)                                the net realisable
value of any additional security previously provided under this Clause 15;

 

is below 140 per cent. of the Adjusted Loan
Amount.

 

15.2                       Provision
of additional security; prepayment. 
If the Agent serves a notice on the Borrower under Clause 15.1, the
Borrower shall, within 1 month after the date on which the Agent’s notice is
served, either:

 

(a)                                 provide, or ensure
that a third party provides, additional security which has a net realisable
value (if such additional security consists of vessels, determined pursuant to
Clause 15.6, and if such additional security is not vessels, determined by the
Majority Lenders acting reasonably) at least equal to the shortfall and is
documented in such terms as the Agent may, with the authorisation of the
Majority Lenders, approve or require; or

 

(b)                                prepay such part of
the Loan as will eliminate the shortfall.

 

15.3                       Meaning of
additional security.  In Clause 15.2, “security” means a Security
Interest over an asset or assets acceptable to the Majority Lenders acting
reasonably (whether securing the Borrower’s liabilities under the Finance
Documents and the Master Agreements or a guarantee in respect of those
liabilities), or a guarantee, letter of credit or other security in respect of
the Borrower’s liabilities under the Finance Documents and the Master
Agreements.

 

43

 

15.4        Requirement for additional
documents.  The Borrower shall not be deemed
to have complied with Clause 15.2(a) until the Agent has confirmed to the
Security Trustee that it has received in connection with the additional
security certified copies of documents of the kind referred to in paragraphs 3,
4 and 5 of Part A of Schedule 3 and such legal opinions in terms
acceptable to the Majority Lenders from such lawyers as they may select.

 

15.5        Valuation of
Ships.  The Fair Market Value of a Ship at any date
is that shown by the average of the 2 most recent valuations obtained pursuant
to this Clause 15.5 and each prepared and addressed to the Agent:

 

(a)           as at the date of the
most recent semi-annual valuations as provided, unless the Agent has obtained
more recent valuations as provided in the last sentence of this Clause below,
in which case as of the date of such more recent valuations;

 

(b)           by an Approved
Shipbroker;

 

(c)           with or without
physical inspection of that Ship (as the Agent may require);

 

(d)           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;

 

(e)           after deducting the
estimated amount of the usual and reasonable expenses which would be incurred
in connection with the sale.

 

The
Borrower shall provide (at its own cost) the valuations of each Ship which are
required to determine its Fair Market Value pursuant to this Clause 15.5 at
semi-annual intervals after the first Drawdown Date throughout the Security
Period and, after the occurrence of an Event of Default which is continuing,
whenever requested by the Agent. The Agent may, at any other time, obtain (at
its own cost) valuations of any Ship in order to determine its Fair Market
Value pursuant to this Clause 15.5

 

15.6        Value of
additional vessel security.  The net realisable
value of any additional security which is provided under Clause 15.2 and which
consists of a Security Interest over a vessel shall be that shown by two (2) valuations
complying with the requirements of Clause 15.5.

 

15.7        Valuations
binding.  Any valuation under Clause 15.2, 15.5 or 15.6
shall be binding and conclusive as regards the Borrower, the Agent and the
Lenders and, in the case of any additional security not constituting a vessel,
shall be the valuation which the Majority Lenders determine acting reasonably.

 

15.8        Provision of
information.  The Borrower shall promptly provide the Agent
and any shipbroker or expert acting under Clause 15.5 or 15.6 with any
information which the Agent or the shipbroker or expert may request for the
purposes of its valuation; and, if the Borrower fails 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 Majority Lenders (or the
expert appointed by them) consider prudent.

 

15.9        Payment of
valuation expenses.  Subject to Clause
15.5 with regard to valuation expenses for the Ships but without prejudice to the
generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the
Borrower shall, on demand, pay the Agent the amount of the fees and expenses of
any shipbroker or expert instructed by the Agent under this Clause and all
reasonable, out-of-pocket legal and other expenses incurred by the Agent and
the Security Trustee in connection with any matter arising out of this Clause.

 

44

 

15.10      Application of
prepayment.  Clause 8 shall apply in relation to any
prepayment pursuant to Clause 15.2(b).

 

16           PAYMENTS AND
CALCULATIONS

 

16.1        Currency and
method of payments.  All payments to be
made by the Lenders or by the Borrower under a Finance Document shall be made
to the Agent or to the Security Trustee, in the case of an amount payable to
it:

 

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

 

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

 

(c)           in the case of an
amount payable by a Lender to the Agent or by the Borrower to the Agent or any
Lender, to such account with such bank as the Agent may from time to time
notify to the Borrower and the other Creditor Parties; and

 

(d)           in the case of an
amount payable to the Security Trustee, to such account as it may from time to
time notify to the Borrower and the other Creditor Parties in writing at least
3 Business Days before the payment is due.

 

16.2        Payment on
non-Business Day.  If any payment by the 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.

 

16.3        Basis for
calculation of periodic payments.  All interest 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.

 

16.4        Distribution of payments to
Creditor Parties.  Subject to Clauses 16.5, 16.6 and 16.7:

 

(a)           any amount received
by the Agent under a Finance Document for distribution or remittance to a
Lender, a Swap Bank or the Security Trustee shall be made available by the
Agent to that Lender, that Swap Bank or, as the case may be, the Security
Trustee by payment, with funds having the same value as the funds received, to
such account as that Lender and that Swap Bank or the Security Trustee may have
notified to the Agent not less than 5 Business Days previously; and

 

(b)           amounts to be applied
in satisfying amounts of a particular category which are due to the Lenders
and/or the Swap Banks generally shall be distributed by the Agent to each
Lender and Swap Bank pro rata to the amount in that category which is due to
it.

 

16.5        Permitted
deductions by Agent.  Notwithstanding any other
provision of this Agreement or any other Finance Document, the Agent may,
before making an amount available to a Lender or a Swap Bank, deduct and
withhold from that amount any sum which is then due and payable to the Agent
from that Lender or that Swap Bank under 

 

45

 

any Finance Document or any sum which the
Agent is then entitled under any Finance Document to require that Lender or
that Swap Bank to pay on demand.

 

16.6        Agent only
obliged to pay when monies received. 
Notwithstanding any other provision of this Agreement or any other
Finance Document, the Agent shall not be obliged to make available to the
Borrower or any Lender or any Swap Bank any sum which the Agent is expecting to
receive for remittance or distribution to the Borrower or that Lender or that
Swap Bank until the Agent has satisfied itself that it has received that sum.

 

16.7        Refund to Agent
of monies not received.  If and to the extent
that the Agent makes available a sum to the Borrower or a Lender or a Swap
Bank, without first having received that sum, the Borrower or (as the case may
be) that Lender or that Swap Bank concerned shall, on demand:

 

(a)           refund the sum in
full to the Agent; and

 

(b)           pay to the Agent the
amount (as certified by the Agent) which will indemnify the Agent against any
funding or other loss, liability or expense incurred by the Agent as a result
of making the sum available before receiving it.

 

16.8        Agent may
assume receipt.  Clause 16.7 shall not affect any claim which
the Agent has under the law of restitution, and applies irrespective of whether
the Agent had any form of notice that it had not received the sum which it made
available.

 

16.9        Creditor Party
accounts.  Each Creditor Party shall maintain accounts
showing the amounts owing to it by the Borrower and each Security Party under
the Finance Documents and all payments in respect of those amounts made by the
Borrower and any Security Party.

 

16.10      Agent’s
memorandum account.  The Agent shall
maintain a memorandum account showing the amounts advanced by the Lenders and
all other sums owing to the Agent, the Security Trustee and each Lender from
the Borrower and each Security Party under the Finance Documents and all
payments in respect of those amounts made by the Borrower and any Security
Party.

 

16.11      Accounts prima
facie evidence.  If any accounts maintained under Clauses 16.9
and 16.10 show an amount to be owing by the Borrower or a Security Party to a
Creditor Party, those accounts shall be prima facie evidence that that amount
is owing to that Creditor Party.

 

17           APPLICATION
OF RECEIPTS

 

17.1        Normal order of
application.  Except as any Finance Document may otherwise
provide, any sums which are received or recovered by any Creditor Party 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  and the Master Agreements in
the following order and proportions:

 

(i)            first,
in or towards satisfaction pro rata of all amounts then due and payable to the
Creditor Parties under the Finance Documents other than those amounts referred
to at paragraphs (ii) and (iii) (including, but without limitation,
all amounts payable by the Borrower under Clauses 20, 21 and 22 of this
Agreement or by the Borrower or any Security Party under any corresponding or
similar provision in any other Finance Document or in the Master Agreements);

 

(ii)           second,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Creditor Parties under the Finance Documents
and 

 

46

 

the
Master Agreements (and pro rata as regards each Master Agreement) (and, for
this purpose, the expression “interest”
shall include any net amount which the Borrower shall have become liable to pay
or deliver under Section 2 (Obligations)
of the Master Agreement but shall have failed to pay or deliver to the Swap
Bank at the time of application under this Clause 17), provided, that all
interest and default interest payable in respect of that portion of the
notional amount of the Transactions then outstanding which exceeds 60 per cent.
of the Loan shall be excluded from the operation of this paragraph (ii);

 

(iii)          third,
in or towards satisfaction pro rata of the Loan and the Swap Exposure of the
Swap Banks then due and payable (and pro rata as regards each Swap Bank),
provided, that all Swap Exposure in respect of that portion of the Transactions
then outstanding which exceeds 60 per cent. of the Loan shall be excluded from
the operation of this paragraph (iii); and

 

(iv)          fourth,
in or towards satisfaction of all interest (as defined under paragraph (ii) above)
in respect of the Transactions which has been excluded pursuant to paragraph (ii) above
and the Swap Exposure of the Swap Banks then due and payable which has been
excluded pursuant to paragraph (iii) above (and pro rata as regards each
Swap Bank);

 

(b)           SECONDLY: if an Event
of Default or a Potential Event of Default has occurred which is continuing, in
retention of an amount equal to any amount not then due and payable under any
Finance Document or any Master Agreement (in the case of the latter, calculated
as at the actual Early Termination Date applying to each particular Designated
Transaction, or if no such Early Termination Date shall have occurred,
calculated as if an Early Termination Date occurred on the date of application
or distribution hereunder) but which the Agent acting in good faith, by notice
to the Borrower, the Security Parties and the other Creditor 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 17.1(a) (and for the avoidance of
doubt any application between the Swap Banks shall be in accordance with the
provisions of Clause 17.1(a)); and

 

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

 

18           APPLICATION
OF EARNINGS

 

18.1        Earnings.  Subject to the General Assignments the
Borrower shall procure that from and after the Drawdown Date all the Earnings
of each Ship shall be paid to the relevant Earnings Account maintained with the
Agent and the Earnings shall be available to the Borrower or the relevant Owner
(as the case may be) for use in their sole discretion unless an Event of
Default has occurred and is continuing. 
This Clause 18.1 shall be considered a prior written consent of the Security
Trustee to withdraw, release and transfer amounts from the Earnings Accounts
provided that no Event of Default has occurred and is continuing as set forth
in clause 5.1 of the Accounts Pledge.

 

18.2        Location of
accounts.  The Borrower shall promptly and shall procure
that the Owners shall promptly:

 

(a)           comply with any
requirement of the Agent as to the location or re-location of the Earnings
Accounts and the Deposit Account; and

 

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

 

47

 

18.3        Authorisation to
withdraw funds from the Earnings Accounts. The Agent shall be entitled to
withdraw any amount due and payable to the Lenders or the Swap Banks under the
Finance Documents or the Master Agreements from the Earnings Accounts without
prior approval by or notice to the Borrower or the Owners.

 

19           EVENTS OF
DEFAULT

 

19.1        Events of
Default.  An Event of Default occurs if:

 

(a)           the Borrower or any
Security Party fails to pay when due any sum payable under a Finance Document
or any of the Master Agreements or under any document relating to a Finance
Document or any of the Master Agreements except where such failure to pay is
caused by an administrative or technical error in which case the Borrower or
any Security Party fails to pay any such sum within 3 Business Days of its due
date; or

 

(b)           any breach occurs of
Clause 9.2, 11.2, 11.3, 11.4, 11.5, 12.2, 12.3, 12.4, 13.2, 13.5, 13.9, 13.12,
13.13, 14.12, 14.15 or 15.1 or clause 11.6 and 11.22 of the Guarantee of the
Shareholder Guarantor; or

 

(c)           any breach by the Borrower
or any Security Party occurs of any provision of a Finance Document (subject to
any applicable grace period) (other than a breach covered by paragraphs (a) or
(b)) which is capable of remedy, and such default continues unremedied 15 days
after written notice from the Agent requesting action to remedy the same; or

 

(d)           (subject to any
applicable grace period specified in the Finance Document) any breach by the
Borrower or any Security Party occurs of any provision of a Finance Document
(other than a breach falling within paragraphs (a), (b) or (c)); or

 

(e)           any representation or
warranty made or repeated by, or by an officer of, the 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 in any material
respect when it is made or repeated; or

 

(f)            any of the following
occurs in relation to any Financial Indebtedness of a Relevant Person which
alone or in aggregate exceeds $1,000,000 in the case of an Owner or $5,000,000
in the case of the Shareholder Guarantor and any Relevant Person (or, in any
case, the equivalent in another currency):

 

(i)            any
Financial Indebtedness of a Relevant Person is not paid when due (other than
Financial Indebtedness described in item (a) of the definition of
Financial Indebtedness); 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 except in the case of any Financial
Indebtedness as described in item (a) of the definition of Financial
Indebtedness; or

 

(iii)          any
Financial Indebtedness as described in item (a) of the definition of
Financial Indebtedness of a Relevant Person becomes due and payable and is not
paid within 30 days after any demand for payment by the holder of such
indebtedness following the due date thereof unless being contested in good
faith by appropriate proceedings promptly instituted and diligently pursued and
where appropriate reserves have been established in accordance with GAAP; or

 

(iv)          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

 

48

 

(v)           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 in each case 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

 

(vi)          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:

 

(i)            a Relevant Person becomes 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, $1,000,000 or more in the case of an Owner or
$5,000,000 or more in the case of the Shareholder Guarantor and any Relevant
Person or the equivalent in another currency unless stayed; 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; or

 

(v)           any
formal declaration of bankruptcy or any formal statement to the effect that a
Relevant Person is insolvent or likely to become insolvent is made by a
Relevant Person or by the directors of a Relevant Person or, in any
proceedings, by a lawyer acting for a Relevant Person; or

 

(vi)          a
provisional liquidator is appointed in respect of a Relevant Person, a winding
up order is made in relation to a Relevant Person or a winding up resolution is
passed by a Relevant Person; or

 

(vii)         a
resolution is passed, an administration notice is given or filed, an
application or petition to a court is made or presented or any other step is
taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant
Person, (cc) a holder of Security Interests which together relate to all or
substantially all of the assets of a Relevant Person, or (dd) a government
minister or public or regulatory authority of a Pertinent Jurisdiction for or
with a view to the winding up of that or another Relevant Person or the
appointment of a provisional liquidator or administrator in respect of that or
another Relevant Person, or that or another Relevant Person ceasing or
suspending business operations or payments to creditors, save that this
paragraph does not apply to a fully solvent winding up of a Relevant Person
other than the Borrower or an Owner (other than an Owner which has sold its
Ship or all of its Ships and has been released from all of the Finance
Documents to which it was a party and the necessary mandatory prepayment has
been made pursuant to Clause 8.6) which is, or is to be, effected for the
purposes of an amalgamation or reconstruction previously approved by the
Majority Lenders and effected not later than 3 months after the commencement of
the winding up; or

 

(viii)        an
administration notice is given or filed, an application or petition to a court
is made or presented or any other step is taken by a creditor of a Relevant
Person (other than a holder of Security Interests which together relate to all
or substantially all of the assets of a Relevant Person) for the winding up of
a Relevant Person or the appointment of a provisional liquidator or administrator
in 

 

49

 

respect of a Relevant Person in any Pertinent Jurisdiction, unless the
proposed winding up, appointment of a provisional liquidator or administration
is being contested in good faith, on substantial grounds and not with a view to
some other insolvency law procedure being implemented instead and either (aa)
the application or petition is dismissed or withdrawn within 20 days of being
made or presented, or (bb) within 20 days of the administration notice being
given or filed, or the other relevant steps being taken, other action is taken
which will ensure that there will be no administration and (in both cases (aa)
or (bb)) the Relevant Person will continue to carry on business in the ordinary
way and without being the subject of any actual, interim or pending insolvency
law procedure; or

 

(ix)           a Relevant Person or its directors take any steps (whether by making or
presenting an application or petition to a court, or submitting or presenting a
document setting out a proposal or proposed terms, or otherwise) with a view to
obtaining, in relation to that or another Relevant Person, any form of
moratorium, suspension or deferral of payments, reorganisation
or arrangement with respect to
such Relevant Person’s debt generally or all or a substantial proportion (by
number or value) of creditors or of any class of them or any such moratorium,
suspension or deferral of payments, reorganisation or arrangement is effected by court order, by
the filing of documents with a court, by means of a contract or in any other
way at all; or

 

(x)            any meeting of the members or directors, or of
any committee of the board or senior management, of a Relevant Person is held
or summoned for the purpose of considering a resolution or proposal to authorise or take any
action of a type described in paragraphs (iv) to (ix) or a step
preparatory to such action, or (with or without such a meeting) the members,
directors or such a committee resolve or agree that such an action or step
should be taken or should be taken if certain conditions materialise or fail to materialise; or

 

(xi)           in a Pertinent Jurisdiction other than England,
any event occurs, any proceedings are opened or commenced or any step is taken
which, in the opinion of the Majority Lenders is similar to any of the
foregoing; or

 

(h)           it becomes unlawful
in any Pertinent Jurisdiction or impossible:

 

(i)            for the Borrower or any Security Party to discharge any liability
under a Finance Document or to comply with any other obligation which the
Majority Lenders consider material under a Finance Document; or

 

(ii)           for the Agent, the Security Trustee or the Lenders to exercise or
enforce any right under, or to enforce any Security Interest created by, a
Finance Document; or

 

(i)            a Change of Control
occurs; or

 

(j)            (i) any
provision which the Majority Lenders consider material of a Finance Document
proves to have been or becomes invalid or unenforceable, or (ii) 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 (other than Permitted Security Interests) and, in
either case, is not remedied promptly upon the request of the Agent; or

 

(k)           if there is a
Designated Transaction outstanding and an Event of Default (as defined in Section 14
of the Master Agreement) occurs; or

 

(l)            a Material Adverse
Change occurs; or

 

50

 

(m)          from and after the
IPO, the common shares of the Shareholder Guarantor cease to be listed on the
New York Stock Exchange; or

 

(n)           a Ship is arrested,
captured, seized or detained in exercise or purported exercise of any lien or
claim and the Borrower or any Security Party has not procured its release by
providing bail or otherwise within 30 days of its arrest, capture, seizure or
detention or such longer period as the Agent (with the authorisation of the
Majority Lenders) may agree; or

 

(o)           any payment default
occurs beyond any applicable grace periods in respect of any loan facilities
entered into between any Security Party and any Arranger.

 

19.2        Actions
following an Event of Default.  On, or at any time
after, the occurrence of an Event of Default which is continuing:

 

(a)           the Agent may, and if
so instructed by the Majority Lenders, the Agent shall:

 

(i)            serve on the Borrower a notice stating that the Commitments and all
other obligations of each Lender to the Borrower under this Agreement are
cancelled; and/or

 

(ii)           serve on the Borrower a notice stating that the Loan, all accrued
interest and all other amounts accrued or owing under this Agreement are
immediately due and payable or are due and payable on demand; and/or

 

(iii)          take any other action which, as a result of the Event of Default or
any notice served under paragraph (i) or (ii), the Agent and/or the
Lenders are entitled to take under any Finance Document or any applicable law;
and/or

 

(b)           the Security Trustee
may, and if so instructed by the Agent, acting with the authorisation of the
Majority Lenders, the Security Trustee shall take any action which, as a result
of the Event of Default or any notice served under paragraph (a)(i) or
(ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Bank
are entitled to take under any Finance Document or any applicable law.

 

19.3        Termination of
Commitments.  On the service of a notice under Clause
19.2(a)(i), the Commitments and all other obligations of each Lender to the
Borrower under this Agreement shall terminate.

 

19.4        Acceleration of
Loan.  On the service of a notice under Clause
19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or
owing from the Borrower 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.

 

19.5        Multiple
notices; action without notice.  The Agent may serve
notices under Clauses 19.2(a)(i) and 19.2(a)(ii) simultaneously or on
different dates and it and/or the Security Trustee may take any action referred
to in Clause 19.2 if no such notice is served or simultaneously with or at any
time after the service of both or either of such notices.

 

19.6        Notification of
Creditor Parties and Security Parties. 
The Agent shall send to each Lender, the Swap Bank, the Security Trustee
and each Security Party a copy or the text of any notice which the Agent serves
on the Borrower under Clause 19.2; but the notice shall become effective when
it is served on the Borrower, and no failure or delay by the Agent to send a
copy or the text of the notice to any other person shall invalidate the notice
or provide the Borrower or any Security Party with any form of claim or defence.

 

19.7        Creditor Party
rights unimpaired.  Nothing in this Clause shall be taken to
impair or restrict the exercise of any right given to individual Lenders or the
Swap Bank under a

 

51

 

Finance Document, the Master Agreement or the
general law; and, in particular, this Clause is without prejudice to Clause 3.1.

 

19.8        Exclusion of
Creditor Party liability.  No Creditor Party,
and no receiver or manager appointed by the Security Trustee, shall have any
liability to the Borrower or a Security Party:

 

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

 

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

 

except
that this does not exempt a Creditor Party or a receiver or manager from
liability for losses shown to have been directly and mainly caused by the
dishonesty or the wilful misconduct of such Creditor Party’s own officers and
employees or (as the case may be) such receiver’s or manager’s own partners or
employees.

 

Without
prejudice to the foregoing, in no event shall any Creditor Party be liable on
any theory of liability for any special, indirect, consequential or punitive
damages and the Borrower hereby waives, releases and agrees (for itself and on
behalf of its subsidiaries) not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favour.

 

19.9        Relevant
Persons.  In this Clause 19 a “Relevant Person” means the Borrower or a
Security Party (excluding any former Owner released pursuant to the definition
of Owner).

 

19.10      Interpretation.  In Clause 19.1(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 19.1(g) “petition” includes an
application.

 

19.11      Position of
Swap Banks.  Neither the Agent nor the Security Trustee
shall be obliged, in connection with any action taken or proposed to be taken
under or pursuant to the foregoing provisions of this Clause 19, to have any
regard to the requirements of any Swap Bank except to the extent that that Swap
Bank is also a Lender.

 

20           FEES AND
EXPENSES

 

20.1        Fees.  The Borrower shall pay to the Agent the fees
in amounts and on the dates previously agreed in writing between the Agent and
the Borrower.

 

20.2        Costs of
negotiation, preparation etc.  The Borrower shall
pay to the Agent on its demand the amount of all reasonable, out-of-pocket
expenses incurred by the Agent or the Security Trustee 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.

 

20.3        Costs of
variations, amendments etc.  The Borrower shall
pay to the Agent, on the Agent’s demand, the amount of all reasonable,
out-of-pocket expenses incurred by the Agent and the Security Trustee in
connection with:

 

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

 

52

 

(b)           any consent or waiver
by the Lenders, the Majority Lenders or the Creditor Party concerned under or
in connection with a Finance Document, or any request for such a consent or
waiver; or

 

(c)           subject to Clause
15.5 with regard to valuation expenses for the Ships, the valuation of any
security provided or offered under Clause 15 or any other matter relating to
such security.

 

20.4        Costs of enforcement.  The Borrower shall pay to the Agent, on the Agent’s demand,
for the account of the Creditor Party concerned, the amount of all expenses
incurred by a Creditor Party during the continuance of an Event of Default (Provided that the Borrower shall
pay for all expenses incurred during the continuance of an Event of Default
even if these are demanded at a time when such Event of Default is not
continuing) in connection with any step taken by the Creditor Party 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 the full amount of
all legal expenses, whether or not such as would be allowed under rules of
court or any taxation or other procedure carried out under such rules.

 

20.5        Documentary
taxes.  The Borrower shall promptly pay any tax
payable on or by reference to any Finance Document, and shall, on the Agent’s
demand, fully indemnify each Creditor Party against any claims, expenses,
liabilities and losses resulting from any failure or delay by the Borrower to
pay such a tax.

 

20.6        Financial
Services Authority fees.  The Borrower shall
pay to the Agent, on the Agent’s demand, for the account of the Lender
concerned the amounts which the Agent from time to time notifies the Borrower
that a Lender has notified the Agent to be necessary to compensate it for the
cost attributable to its Contribution resulting from the imposition from time
to time under or pursuant to the Bank of England Act 1998 and/or by the Bank of
England and/or by the Financial Services Authority (or other United Kingdom
governmental authorities or agencies) of a requirement to pay fees to the
Financial Services Authority calculated by reference to liabilities used to
fund its Contribution.

 

20.7        Certification
of amounts.  A notice which is signed by 2 officers of a
Creditor Party, which states that a specified amount, or aggregate amount, is
due to that Creditor Party 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           INDEMNITIES

 

21.1        Indemnities
regarding borrowing and repayment of Loan. 
The Borrower shall fully indemnify the Agent and each Lender on the
Agent’s demand and the Security Trustee on its demand in respect of all claims,
expenses, liabilities and losses (but excluding loss of Margin) which are made
or brought against or incurred by that Creditor Party, or which that Creditor
Party reasonably and with due diligence estimates that it will incur, as a
result of or in connection with:

 

(a)           the Loan not being
borrowed on the date specified in the relevant Drawdown Notice for any reason
other than a default by the Lender claiming the indemnity;

 

(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 Borrower 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 Borrower on the amount concerned
under Clause 7);

 

53

 

(d)                                 the occurrence of an Event of Default
or a Potential Event of Default and/or the acceleration of repayment of the
Loan under Clause 19;

 

and, subject to
Clause 26.17, in respect of any tax (other than tax on its overall net income)
for which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise) under
any Finance Document.

 

21.2                        Breakage costs. 
Without limiting its generality, Clause 21.1 covers any claim, expense,
liability or loss, excluding loss of Margin, incurred by a Lender:

 

(a)                                  in liquidating or employing deposits
from third parties acquired or arranged to fund or maintain all or any part of
its Contribution and/or any overdue amount (or an aggregate amount which
includes its Contribution 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 concerned) to hedge any exposure arising under this
Agreement or that part which the Lender concerned 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.

 

21.3                        Miscellaneous
indemnities.  Subject to Clause 15.5 with regard to
valuation expenses for the Ships, the Borrower shall fully indemnify each
Creditor Party severally on their respective demands in respect of all claims,
expenses, liabilities and losses which may be made or brought against or
incurred by a Creditor Party, in any country, as a result of or in connection
with:

 

(a)                                  any action taken, or omitted or
neglected to be taken, under or in connection with any Finance Document by the
Agent, the Security Trustee or any other Creditor Party or by any receiver
appointed under a Finance Document; or

 

(b)                                 any other Pertinent Matter;

 

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

 

Without prejudice
to its generality, this Clause 21.3 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.

 

21.4                        Currency indemnity. 
If any sum due from the Borrower or any Security Party to a Creditor
Party 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 the 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;

 

54

 

the Borrower
shall indemnify the Creditor Party concerned against the loss arising when the
amount of the payment actually received by that Creditor Party is converted at
the available rate of exchange into the Contractual Currency.

 

In this Clause
21.4, the “available rate of exchange” means
the rate at which the Creditor Party concerned 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 21.4
creates a separate liability of the Borrower 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.

 

21.5                        Application to Master
Agreements.  For the avoidance of doubt, Clause 21.4 does
not apply in respect of sums due from the Borrower to a Swap Bank under or in
connection with a Master Agreement as to which sums the provisions of section 8
(Contractual Currency) of the relevant Master Agreement shall apply.

 

21.6                        Certification of
amounts.  A notice which is signed by 2 officers of a
Creditor Party, which states that a specified amount, or aggregate amount, is
due to that Creditor Party under this Clause 21 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.

 

21.7                        Sums deemed due to a
Lender.  For the purposes of this Clause 21, a sum
payable by the Borrower to the Agent or the Security Trustee for distribution
to a Lender shall be treated as a sum due to that Lender.

 

22                                  NO SET-OFF OR TAX
DEDUCTION

 

22.1                        No deductions. 
All amounts due from the Borrower 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 the Borrower is required by law to make.

 

22.2                        Grossing-up for taxes. 
If the Borrower is required by law to make a tax deduction from any
payment:

 

(a)                                  the Borrower shall notify the Agent as
soon as it becomes aware of the requirement;

 

(b)                                 the Borrower shall pay the tax deducted
to the appropriate taxation authority promptly, and in any event before any
fine or penalty arises; and

 

(c)                                  subject to Clause 26.17, the amount due
in respect of the payment shall be increased by the amount necessary to ensure
that each Creditor Party 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.

 

22.3                        Tax credit. 
A Creditor Party which has obtained (and has derived full use and
benefit, on an affiliated group basis, of) a repayment or credit in respect of
tax on account of which the Borrower has made an increased payment under Clause
22.2 shall pay to the Borrower a sum equal to the proportion of the repayment
or credit which that Creditor Party allocates to the amount due from the
Borrower in respect of which the Borrower made the increased payment Provided that:

 

55

 

(a)                                  the Creditor Party shall not be obliged
to allocate to this transaction any part of a tax repayment or credit which is
referable to a class or number of transactions;

 

(b)                                 nothing in this Clause 22.3 shall oblige
a Creditor Party to arrange its tax affairs in any particular manner, to claim
any type of relief, credit, allowance or deduction instead of, or in priority
to, another or to make any such claim within any particular time;

 

(c)                                  nothing in this Clause 22.3 shall
oblige a Creditor Party to make a payment which would leave it in a worse
position than it would have been in if the Borrower had not been required to
make a tax deduction from a payment;

 

(d)                                 any allocation or determination made by
a Creditor Party under or in connection with this Clause 22.3 shall be
conclusive and binding on the Borrower and the other Creditor Parties;

 

(e)                                  nothing in this Clause 22.3 shall
oblige any Creditor Party to disclose any information relating to its affairs
(tax or otherwise) or those of its ultimate parent company (or any subsidiary
thereof) or any computations in respect of tax; and

 

(f)                                    the Creditor Party’s tax affairs for
its tax year in respect of which such credit or repayment was obtained have
been finally settled.

 

22.4                        Evidence of payment of
taxes.  Within 1 month after making any tax
deduction, the Borrower shall deliver to the Agent for the Creditor Party
entitled to the payment an original receipt (or certified copy thereof)
satisfactory to that Creditor Party evidencing that the tax had been paid to
the appropriate taxation authority.

 

22.5                        Exclusion of tax on
overall net income.  In this Clause 22 “tax deduction” means any deduction or withholding for or on
account of any present or future tax except tax on a Creditor Party’s overall
net income.

 

22.6                        Application to Master
Agreements.  For the avoidance of doubt, Clause 22 does
not apply in respect of sums due from the Borrower to a Swap Bank under or in
connection with a Master Agreement as to which sums the provisions of section 2(d) (Deduction
or Withholding for Tax) of the relevant Master Agreement shall apply.

 

23                                  ILLEGALITY, ETC

 

23.1                        Illegality. 
This Clause 23 applies if a Lender (the “Notifying Lender”) notifies the Agent 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 Notifying
Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this Agreement.

 

23.2                        Notification of
illegality.  The Agent shall promptly notify the Borrower,
the Security Parties, the Security Trustee and the other Lenders of the notice
under Clause 23.1 which the Agent receives from the Notifying Lender.

 

23.3                        Prepayment;
termination of Commitment.  On the Agent notifying the Borrower under
Clause 23.2, the Notifying Lender’s Commitment shall terminate; and thereupon
or, if later, on the date specified in the Notifying Lender’s notice under
Clause 23.1 as the date 

 

56

 

on which the notified event would become effective the
Borrower shall prepay the Notifying Lender’s Contribution in accordance with
Clause 8.

 

23.4                        Mitigation. 
If circumstances arise which would result in a notification under Clause
23.1 then, without in any way limiting the rights of the Notifying Lender under
Clause 23.3, the Notifying Lender shall use reasonable endeavours to transfer
its obligations, liabilities and rights under this Agreement and the Finance
Documents to another office or financial institution not affected by the circumstances
but the Notifying Lender shall not be under any obligation to take any such
action if, in its opinion, to do would or might:

 

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

 

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

 

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

 

24                                  INCREASED COSTS

 

24.1                        Increased costs. 
This Clause 24 applies if a Lender (the “Notifying Lender”) notifies the Agent that the Notifying
Lender 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);

 

(b)                                 complying with any regulation
(including any which relates to capital adequacy or liquidity controls or which
affects the manner in which the Notifying 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; or

 

(c)                                  the continuing application or
compliance with Basel II (as defined in Clause 24.2),

 

the Notifying
Lender (or a parent company of it) has incurred or will incur an “increased cost”.

 

24.2                        Meaning of “increased cost”. 
In this Clause 24, “increased cost”
means, in relation to a Notifying Lender:

 

(a)                                  an additional or increased cost
incurred as a result of, or in connection with, the Notifying 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 its Commitment or
Contribution or performing its obligations under this Agreement, or of having
outstanding all or any part of its Contribution or other unpaid sums;

 

(b)                                 a reduction in the amount of any
payment to the Notifying Lender under this Agreement or in the effective return
which such a payment represents to the Notifying Lender or on its capital;

 

(c)                                  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 Notifying Lender’s Contribution or (as the
case may require) the proportion of that cost attributable to the Contribution;
or

 

(d)                                 a liability to make a payment, or a
return foregone, which is calculated by reference to any amounts received or
receivable by the Notifying Lender under this Agreement;

 

57

 

but not an item
excluded by Clause 26.17 or an item attributable to a change in the rate of tax
on the overall net income of the Notifying Lender (or a parent company of it)
or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or
an item arising directly out of the initial implementation with the “International
Convergence of Capital Measurement and Capital Standards, a Revised Framework”
published by the Basel Committee on Banking Supervision in June 2004, in
the form existing on the date of this Agreement (“Basel II”) or any other law or regulation which implements
Basel II (whether such implementation, application or compliance is by a
government, regulator, Creditor Party or any of its affiliates).

 

For
the purposes of this Clause 24.2 the Notifying Lender may in good faith
allocate or spread costs and/or losses among its assets and liabilities (or any
class of its assets and liabilities) on such basis as it considers appropriate.

 

24.3                        Notification to
Borrower of claim for increased costs.  The Agent shall
promptly notify the Borrower and the Security Parties of the notice which the
Agent received from the Notifying Lender under Clause 24.1.

 

24.4                        Payment of increased
costs.  The Borrower shall pay to the Agent, on the
Agent’s demand, for the account of the Notifying Lender the amounts which the
Agent from time to time notifies the Borrower that the Notifying Lender has
specified to be necessary to compensate the Notifying Lender for the increased
cost.

 

24.5                        Notice of prepayment. 
If the Borrower is not willing to continue to compensate the Notifying
Lender for the increased cost under Clause 24.4, the Borrower may give the
Agent not less than 5 Business Days’ notice of its intention to prepay the
Notifying Lender’s Contribution at the end of an Interest Period.

 

24.6                        Prepayment;
termination of Commitment.  A notice of prepayment under Clause 24.5
shall be irrevocable; the Agent shall promptly notify the Notifying Lender of
the Borrower’s notice of intended prepayment; and:

 

(a)                                  on the date on which the Agent serves
that notice, the Commitment of the Notifying Lender shall be cancelled; and

 

(b)                                 on the date specified in its notice of
intended prepayment, the Borrower shall prepay (without premium or penalty) the
Notifying Lender’s Contribution, together with accrued interest thereon at the
applicable rate plus the Margin.

 

24.7                        Application of
prepayment.  Clause 8 shall apply in relation to the
prepayment.

 

25                                  SET-OFF

 

25.1                        Application of credit
balances.  From and after the Drawdown Date, each
Creditor Party may at any time whilst an Event of Default is continuing, 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
Borrower at any office in any country of that Creditor Party in or towards
satisfaction of any sum then due from the Borrower to that Creditor Party under
any of the Finance Documents or any Master Agreement; and

 

(b)                                 for that purpose:

 

(i)                                     break,
or alter the maturity of, all or any part of a deposit of the Borrower;

 

(ii)                                  convert
or translate all or any part of a deposit or other credit balance into Dollars;

 

58

 

(iii)                               enter
into any other transaction or make any entry with regard to the credit balance
which the Creditor Party concerned considers appropriate.

 

25.2                        Existing rights
unaffected.  No Creditor Party shall be obliged to
exercise any of its rights under Clause 25.1; 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 a Creditor Party is entitled
(whether under the general law or any document).

 

25.3                        Sums deemed due. 
For the purposes of this Clause 25, a sum payable by the Borrower to the
Agent or the Security Trustee for distribution to, or for the account of, a
Lender or a Swap Bank shall be treated as a sum due to that Lender or that Swap
Bank; and each Lender’s or each Swap Bank’s proportion of a sum so payable for
distribution to, or for the account of, the Lenders or the Swap Banks shall be
treated as a sum due to such Lender or such Swap Bank.

 

25.4                        No Security Interest. 
This Clause 25 gives the Creditor Parties a contractual right of set-off
only and does not create any equitable charge or other Security Interest over
any credit balance of the Borrower.

 

26                                  TRANSFERS AND
CHANGES IN LENDING OFFICES

 

26.1                        Transfer by Borrower. 
The Borrower may not, without the consent of the Agent given on the
instructions of all the Lenders, transfer any of its rights, liabilities or
obligations under any Finance Document.

 

26.2                        Transfer by a Lender. 
Subject to Clause 26.4, a Lender (the “Transferor
Lender”) may, at its own cost, with the prior written consent of the
Borrower (not to be unreasonably withheld or delayed) or without the consent of
the Borrower if an Event of Default has occurred and is continuing, cause:

 

(a)                                  its rights in respect of all part of
its Contribution (such amount to be at least $10,000,000 or if at any time its
remaining Contribution is less than $10,000,000 such lower amount); or

 

(b)                                 its obligations in respect of all or
part of its Commitment (such amount to be at least $10,000,000); or

 

(c)                                  a combination of (a) and (b);

 

to be (in the
case of its rights) transferred to, or (in the case of its obligations) assumed
by, another bank or financial institution or a trust, fund or other entity
which is regularly engaged, in or established for the purpose of making,
purchasing or investing in loans, securities or other financial assets (a “Transferee Lender”) by delivering to the Agent a completed
certificate in the form set out in Schedule 4 with any modifications approved
or required by the Agent (a “Transfer Certificate”)
executed by the Transferor Lender and the Transferee Lender Provided that a Lender may make such
transfer to any wholly owned subsidiary of it, to its parent company or to
another subsidiary of its parent company without the consent of the Borrower
and the fee referred to in Clause 26.11 shall not apply in relation to any such
transfer.

 

However any
rights and obligations of the Transferor Lender in its capacity as Agent or
Security Trustee will have to be dealt with separately in accordance with the
Agency and Trust Deed.

 

26.3                        Transfer Certificate,
delivery and notification.  As soon as reasonably practicable after a
Transfer Certificate is delivered to the Agent, it shall (unless it has reason
to believe that the Transfer Certificate may be defective):

 

59

 

(a)                                  sign the Transfer Certificate on behalf
of itself, the Borrower, the Security Parties, the Security Trustee and each of
the other Lenders and each of the Swap Banks;

 

(b)                                 on behalf of the Transferee Lender,
send to the Borrower and each Security Party letters or faxes notifying them of
the Transfer Certificate and attaching a copy of it; and

 

(c)                                  send to the Transferee Lender copies of
the letters or faxes sent under paragraph (b) above.

 

but the Agent
shall only be obliged to execute a Transfer Certificate delivered to it by the
Transferor Lender and the Transferee Lender once it is satisfied it has
complied with all necessary “know your customer” or other similar checks under
all applicable laws and regulations in relation to the transfer to that
Transferee Lender.

 

26.4                        Effective Date of
Transfer Certificate.  A Transfer Certificate becomes effective on
the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent
under Clause 26.3 on or before that date.

 

26.5                        No transfer without
Transfer Certificate.  No assignment or transfer of any right or
obligation of a Lender under any Finance Document is binding on, or effective
in relation to, the Borrower, any Security Party, the Agent or the Security
Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

 

26.6                        Lender
re-organisation; waiver of Transfer Certificate.  However, if a Lender
enters into any merger, de-merger or other reorganisation as a result of which
all its rights or obligations vest in another person (the “successor”), the Agent may, if it sees fit,
by notice to the successor and the Borrower and the Security Trustee waive the
need for the execution and delivery of a Transfer Certificate; and, upon
service of the Agent’s notice, the successor shall become a Lender with the
same Commitment and Contribution as were held by the predecessor Lender.

 

26.7                        Effect of Transfer
Certificate.  A Transfer Certificate takes effect in
accordance with English law as follows:

 

(a)                                  to the extent specified in the Transfer
Certificate, all rights and interests (present, future or contingent) which the
Transferor Lender has under or by virtue of the Finance Documents are assigned
to the Transferee Lender absolutely, free of any defects in the Transferor
Lender’s title and of any rights or equities which the Borrower or any Security
Party had against the Transferor Lender;

 

(b)                                 the Transferor Lender’s Commitment is
discharged to the extent specified in the Transfer Certificate;

 

(c)                                  the Transferee Lender becomes a Lender
with the Contribution previously held by the Transferor Lender and a Commitment
of an amount specified in the Transfer Certificate;

 

(d)                                 the Transferee Lender becomes bound by
all the provisions of the Finance Documents which are applicable to the Lenders
generally, including those about pro-rata sharing and the exclusion of
liability on the part of, and the indemnification of, the Agent and the
Security Trustee and, to the extent that the Transferee Lender becomes bound by
those provisions (other than those relating to exclusion of liability), the
Transferor Lender ceases to be bound by them;

 

(e)                                  any part of the Loan which the
Transferee Lender advances after the Transfer Certificate’s effective date
ranks in point of priority and security in the same way as it would have ranked
had it been advanced by the transferor, assuming that any defects in the
transferor’s title and any rights or equities of the Borrower or any Security
Party against the Transferor Lender had not existed;

 

60

 

(f)                                    the Transferee Lender becomes entitled
to all the rights under the Finance Documents which are applicable to the
Lenders generally, including but not limited to those relating to the Majority
Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee
Lender becomes entitled to such rights, the Transferor Lender ceases to be
entitled to them; and

 

(g)                                 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, the
Transferee Lender shall be entitled to recover damages by reference to the loss
incurred by it as a result of the breach or misrepresentation, irrespective of
whether the original Lender would have incurred a loss of that kind or amount.

 

The rights and
equities of the Borrower or any Security Party referred to above include, but
are not limited to, any right of set off and any other kind of cross-claim.

 

26.8                        Maintenance of register of
Lenders.  During the Security Period the Agent shall
maintain a register in which it shall record the name, Commitment, Contribution
and administrative details (including the lending office) from time to time of
each Lender holding a Transfer Certificate and the effective date (in accordance
with Clause 26.4) of the Transfer Certificate; and the Agent shall make the
register available for inspection by any Lender, the Security Trustee and the
Borrower during normal banking hours, subject to receiving at least 3 Business
Days prior notice.

 

26.9                        Reliance on register
of Lenders.  The entries on that register shall, in the
absence of manifest error, be conclusive in determining the identities of the
Lenders and the amounts of their Commitments and Contributions and the
effective dates of Transfer Certificates and may be relied upon by the Agent
and the other parties to the Finance Documents for all purposes relating to the
Finance Documents.

 

26.10                 Authorisation of Agent
to sign Transfer Certificates.  The Borrower, the Security Trustee, each
Lender, the Arranger and each Swap Bank irrevocably authorise the Agent to sign
Transfer Certificates on its behalf.

 

26.11                 Registration fee. 
In respect of any Transfer Certificate, the Agent shall be entitled to
recover a registration fee of $3,500 from the Transferor Lender or (at the
Agent’s option) the Transferee Lender.

 

26.12                 Sub-participation;
subrogation assignment.  A 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 Borrower, any Security
Party, the Agent or the Security Trustee; and the Lenders may assign, in any
manner and terms agreed by the Majority Lenders, the Agent and the Security
Trustee, all or any part of those rights to an insurer or surety who has become
subrogated to them.

 

26.13                 Disclosure of
information.  A Lender may disclose to a potential
Transferee Lender or sub-participant which has been approved by the
Borrower any information which that Lender has received in relation to the
Borrower, any Security Party or their affairs under or in connection with any
Finance Document, unless the information is of a confidential nature.

 

26.14                 Change of lending
office.  A Lender may change its lending office by
giving notice to the Agent and the change shall become effective on the later
of:

 

(a)                                  the date on which the Agent receives
the notice; and

 

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

 

61

 

26.15                 Notification.  On receiving such a notice, the Agent shall
notify the Borrower and the Security Trustee; and, until the Agent receives
such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.

 

26.16                 Replacement
of Reference Bank.  If any Reference Bank ceases to be a Lender
or is unable on a continuing basis to supply quotations for the purposes of
Clause 5 then, unless the Borrower, the Agent and the Majority Lenders otherwise
agree, the Agent, acting on the instructions of the Majority Lenders, and after
consulting the Borrower, shall appoint another bank (whether or not a Lender)
to be a replacement Reference Bank; and, when that appointment comes into
effect, the first-mentioned Reference Bank’s appointment shall cease to be
effective.

 

26.17                 Tax indemnity,
tax gross-up and increased costs on assignment, transfer and change of lending
office.  If:

 

(a)                                  a Lender assigns or
transfers any rights or obligations under the Finance Documents pursuant to
Clause 26.2 or changes its lending office; and

 

(b)                                 as a result of
circumstances existing at the date the assignment, transfer or change occurs
the Borrower would be obliged to make a payment to the Transferee Lender or
Lender acting through its new lending office under Clause 21.1 in respect of
any tax, Clause 22 or Clause 24,

 

then the Transferee Lender or the Lender
acting through its new lending office is only entitled to receive payment under
those Clauses to the same extent as the Transferor Lender or the Lender acting
through its previous lending office would have been if the assignment, transfer
or change had not occurred.

 

27                                  VARIATIONS
AND WAIVERS

 

27.1                        Variations,
waivers etc. by Majority Lenders.  Subject to Clause
27.2, a document shall be effective to vary, waive, suspend or limit any
provision of a Finance Document, or any Creditor Party’s rights or remedies
under such a provision or the general law, only if the document is signed, or
specifically agreed to by fax, by the Borrower, by the Agent on behalf of the
Majority Lenders, by the Agent and the Security Trustee in their own rights,
and, if the document relates to a Finance Document to which a Security Party is
party, by that Security Party.

 

27.2                        Variations,
waivers etc. requiring agreement of all Lenders. 
However, as regards the following, Clause 27.1 applies as if the words “by
the Agent on behalf of the Majority Lenders” were replaced by the words “by or
on behalf of every Lender and every Swap Bank”:

 

(a)                                  a change in the
Margin or in the definition of LIBOR;

 

(b)                                 a change to the date
for, the amount of, any payment of principal, interest, fees, or other sum
payable under this Agreement;

 

(c)                                  a change to any
Lender’s Commitment;

 

(d)                                 an extension of the
Availability Period;

 

(e)                                  a change to the
definition of “Designated Transaction”, “Master Agreement”, “Secured
Liabilities”, “Swap Bank”, “Swap Exposure”, “Majority Lenders” or “Finance
Documents”;

 

(f)                                    a change to the
preamble or to Clause 2, 3, 4, 5.1, 8.1, 8.5, 8.8, 8.12, 11, 15, 17, 18, 19 or
30;

 

62

 

(g)                                 a change to this
Clause 27;

 

(h)                                 any release of, or
material variation to, a Security Interest, guarantee, indemnity or
subordination arrangement set out in a Finance Document; and

 

(i)                                     any other change or
matter as regards which this Agreement or another Finance Document expressly
provides that each Lender’s consent is required.

 

27.3                        Exclusion
of other or implied variations.  Except for a
document which satisfies the requirements of Clauses 27.1 and 27.2, no
document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person
acting on behalf of any of them) shall result in the Creditor Parties or any of
them (or any person acting on behalf of any of them) 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 the
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.

 

28                                  NOTICES

 

28.1                        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.

 

28.2                        Addresses
for communications.  A notice by letter
or fax shall be sent:

 

	
  (a)

  	
  to the Borrower:

  	
  Britannia Bulk plc

  
	
   

  	
   

  	
  Dexter House

  
	
   

  	
   

  	
  2nd Floor

  
	
   

  	
   

  	
  Royal Mint Court

  
	
   

  	
   

  	
  London

  
	
   

  	
   

  	
  EC3N 4QN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax No:

  	
  + 44 20 7
  264 4949

  
	
   

  	
   

  	
  Attn:

  	
  Fariyal Khanbabi

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  to a Lender:

  	
  At the address
  below its name in Part A of Schedule 1 or (as the case may require) in
  the relevant Transfer Certificate.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  to a Swap Bank:

  	
  Nordea Bank
  Finland plc

  
	
   

  	
   

  	
  C/o Nordea Bank
  Danmark A/S

  
	
   

  	
   

  	
  Christiansbro
  Strandgade 3

  
	
   

  	
   

  	
  PO Box 850

  
	
   

  	
   

  	
  DF-0900 Copenhagen

  
	
   

  	
   

  	
  Denmark

  

 

63

 

	
   

  	
   

  	
  Fax No:  +
  45 33 33 58 20

  
	
   

  	
   

  	
  Attn:  Head of Shipping

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lloyds TSB Bank plc

  
	
   

  	
   

  	
  Faryners House

  
	
   

  	
   

  	
  25 Monument Street

  
	
   

  	
   

  	
  London

  
	
   

  	
   

  	
  EC3R 8BQ

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  +44 20 7158
  3798/9

  
	
   

  	
   

  	
  Attn:

  	
  Corporate
  Markets Division

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  to
  the Agent and

  	
  For
  Administration matters:

  
	
   

  	
  the
  Security Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
  Nordea
  Bank Danmark A/S

  
	
   

  	
   

  	
  Structured
  Loan Operations

  
	
   

  	
   

  	
  Christiansbro,
  Strandgade 3

  
	
   

  	
   

  	
  PO
  Box 850

  
	
   

  	
   

  	
  DK-0900 Copenhagen

  
	
   

  	
   

  	
  Denmark

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax No:

  	
  + 45 33 33
  58 20 

  
	
   

  	
   

  	
  Attn:

  	
  Head of
  Section

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For credit
  matters:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nordea Bank
  Danmark A/S

  
	
   

  	
   

  	
  Shipping,
  Oil Services and International Division

  
	
   

  	
   

  	
  Christiansbro,
  Strandgade 3

  
	
   

  	
   

  	
  PO Box 850

  
	
   

  	
   

  	
  DK-0900
  Copenhagen

  
	
   

  	
   

  	
  Denmark

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax No:

  	
  +45 33 33 55
  09

  
	
   

  	
   

  	
  Attn:

  	
  Head of
  Shipping

  
	
   

  	
   

  	
   

  	
   

  

or
to such other address as the relevant party may notify the Agent or, if the
relevant party is the Agent or the Security Trustee, the Borrower, the Lenders,
the Swap Banks and the Security Parties.

 

28.3                        Effective
date of notices.  Subject to Clauses 28.4 and 28.5:

 

(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; and

 

(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.

 

28.4                        Service
outside business hours.  However, if under
Clause 28.3 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 28.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is such a business day.

 

64

 

28.5                        Illegible
notices.  Clauses 28.3 and 28.4 do not apply if the
recipient of a notice notifies the sender within 1 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.

 

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

 

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

 

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

 

28.7                        Electronic
communication.  Any communication to
be made between the Agent and a Lender under or in connection with the Finance
Documents may be made by electronic mail or other electronic means, if the
Agent and the relevant Lender:

 

(a)                                  agree that, unless
and until notified to the contrary, this is to be an accepted form of
communication;

 

(b)                                 notify each other in
writing of their electronic mail address and/or any other information required
to enable the sending and receipt of information by that means; and

 

(c)                                  notify each other of
any change to their respective addresses or any other such information supplied
to them.

 

Any electronic communication made between the
Agent and a Lender will be effective only when actually received in readable
form and, in the case of any electronic communication made by a Lender to the
Agent, only if it is addressed in such a manner as the Agent shall specify for
this purpose.

 

28.8                        English
language.  Any notice under or in connection with a
Finance Document shall be in English.

 

28.9                        Meaning
of “notice”.  In this Clause 28, “notice” includes any demand, consent,
authorisation, approval, instruction, waiver or other communication.

 

29                                  SUPPLEMENTAL

 

29.1                        Rights
cumulative, non-exclusive.  The rights and
remedies which the Finance Documents give to each Creditor Party are:

 

(a)                                  cumulative;

 

(b)                                 may be exercised as
often as appears expedient; and

 

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

 

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.

 

65

 

29.3                        Counterparts.  A Finance Document may be executed in any
number of counterparts.

 

29.4                        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.

 

29.5                        Confidentiality.  At all times during the Security Period, each of the parties
hereto shall keep confidential and shall not, without the prior written consent
of the other parties, issue any press release in relation to the transactions
evidenced by this Agreement and the other Finance Documents, or disclose to any
other person, the business, financial or other information contained in or
supplied in connection with this Agreement or any other Finance Document and
the transactions contemplated hereby or thereby or any other agreement entered
into after the date hereof by the Borrower and any Security Party or in connection
with this Agreement or any other Finance Document, or release copies or drafts
of any such document which disclose or reveal the identity of the parties (or
any of them) provided that (a) the foregoing provisions of this Clause
29.5 shall not apply to any disclosure of information between one party hereto
to another; and (b) the parties hereto shall be entitled, without any such
consent, to disclose the same:

 

(a)                                  in connection with
any proceedings arising out of or in connection with this Agreement or any of
the other Finance Documents; or

 

(b)                                 to any underwriters
and their officers, directors, employees, counsel, agents and advisors in each
case in connection with the IPO; or

 

(c)                                  if required to do so
by an order or a court of competent jurisdiction whether in pursuance of any
procedure for discovery of documents or otherwise; or

 

(d)                                 pursuant to any law,
regulation or administrative order having the force of law, including in order
for Shareholder Guarantor to comply with securities laws and in order for a
Lender to meet its legal requirements relating to reduction and/or prevention
of money laundering, terrorism or corruption; or

 

(e)                                  to any fiscal,
monetary, tax, governmental or other competent authority; or

 

(f)                                    to the auditors,
legal, insurance or other professional advisors, brokers, insurers or
underwriters of any Creditor Party or any Security Party; or

 

(g)                                 if required to do so
in order to obtain any permits, consents, licences which any Creditor Party or
any Security Party is required to obtain pursuant to the Finance Documents; or

 

(h)                                 if any of the same is
or shall become publicly known otherwise than as a result of a breach by such
party of this Clause 29.5; or

 

(i)                                     in any manner
contemplated by any of the Finance Documents; or

 

(j)                                     in the case of a
Creditor Party to any member of the group of companies of which such Creditor
Party is a member and in the case of a Security Party to any member of the
group of companies of which such Security Party is a member, provided that in
each case the relevant Creditor Party or the relevant Security Party shall
procure that the party to whom such disclosure is made shall comply with the
requirements of this Clause 29.5.

 

Notwithstanding
the foregoing provisions of this Clause 29.5 or any other provisions of this
Agreement or any other Finance Document to the contrary:

 

(i)                                     at an appropriate time after the date of this Agreement, the Agent,
the Security Trustee, the Lenders and the Borrower (each at their own cost) may
place a customary announcement in such newspapers and periodicals as it may
choose or 

 

66

 

disclose
certain details in relation to the transaction for the purposes of distribution
of a “tombstone” and for including such details in any deal listings stating
that it has participated (in its various capacities) in the transactions
contemplated in this Agreement and the other Finance Documents, in each case
subject to the prior approval of the other parties to this Agreement as to the
form and timing of the announcement; and

 

(ii)                                  the Agent, the Security Trustee, the Lenders and the Borrower (each
at their own cost) may disclose generic details of the transaction contemplated
by this Agreement and the other Finance Documents in its annual financial presentations
or other “roadshow” presentations, internal publications, annual reports or
financial or other brochures.

 

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 Creditor Parties.  Clause 30.2 is for the exclusive benefit of
the Creditor Parties, each of 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.

 

The
Borrower shall not 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                        Acceptance
as process agent.  The Borrower hereby accepts its appointment
as agent to receive and accept for and on behalf of each Owner any process or
other document relating to any proceedings in the English Courts which are
connected with any Finance Document.

 

30.5                        Creditor
Party rights unaffected.  Nothing in this
Clause 30 shall exclude or limit any right which any Creditor Party may have
(whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process,
the recognition or enforcement of a judgment or any similar or related matter
in any jurisdiction.

 

30.6                        Meaning
of “proceedings”.  In this Clause 30, “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure.

 

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

 

67

 

SCHEDULE 1

PART A

LENDERS AND COMMITMENTS

 

	
  Lender

  	
   

  	
  Lending Office

  	
   

  	
  Total

  Commitment

  (US$)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nordea Bank Danmark A/S

  	
   

  	
  Christiansbro

  Strandgade 3

  PO Box 850

  DK-0900, Copenhagen

  Denmark

  
 Fax:  +45 33 33 38 20

  Attn: Head of Shipping

  	
   

  	
  85,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lloyds TSB Bank plc

  	
   

  	
  10 Gresham
  Street

  London

  EC2V 7AE

  

  Fax:  +44 20 7158 3271

  Attn: Loan Management

  	
   

  	
  85,000,000

  

 

PART B

SWAP BANKS

 

	
  Lender

  	
   

  	
  Office

  
	
   

  	
   

  	
   

  
	
  Nordea Bank Finland plc

  	
   

  	
  2747
  Settlement Services

  FIN-00020 Nordea

  Helsinki

  Finland

  
	
   

  	
   

  	
   

  
	
  Lloyds TSB Bank plc

  	
   

  	
  Faryners
  House

  25 Monument Street

  London

  EC3R 8BQ

  

  Fax:  +44 20 7158 3298/9

  Attn: Corporate Markets Division

  

 

68

 

SCHEDULE 2

DRAWDOWN NOTICE

 

To:          Nordea Bank Danmark A/S

Christiansbro

Strandgade 3

PO Box 850

DK-0900, Copenhagen

Denmark

 

[·]

 

DRAWDOWN NOTICE

 

1                                         We refer to the loan agreement (the “Loan
Agreement”) dated [·] 2008 and made between ourselves, as Borrower, the Lenders referred
to therein, the Swap Banks referred to therein, yourselves and Lloyds TSB Bank
plc as Arrangers and yourselves as Agent and Security Trustee in connection
with a term loan facility of up to US$170,000,000.  Terms defined in the Loan Agreement have
their defined meanings when used in this Drawdown Notice.

 

2                                         We request to borrow the Loan as follows:

 

(a)                                  Amount: US$[·];

 

(b)                                 Drawdown Date:  [·]
2008;

 

(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 10 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; and

 

(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
Majority Lenders.

 

[Name of Signatory]

for and on behalf of

BRITANNIA BULK PLC

 

69

 

SCHEDULE 3

PART A

CONDITION PRECEDENT DOCUMENTS

 

The following
are the documents referred to in Clause 9.1(a).

 

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

 

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

 

3                                         Copies of resolutions of the directors (and in relation to the
Owners incorporated in Panama, the shareholders) of the Borrower and each
Security Party authorising the execution of each of the Finance Documents to
which it is a party.

 

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

 

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

 

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

 

7                                         A copy of the latest unaudited consolidated accounts of the
Shareholder Guarantor and the latest unaudited individual accounts of the
Borrower and each Owner each certified as to their correctness by the chief
financial officer of the Borrower.

 

8                                         Documentary evidence that each Ship:

 

(a)                                  is definitively and permanently registered in the name of the
relevant Owner under the flag indicated for that Ship in Schedule 5 or 6 as the
case may be;

 

(b)                                 maintains its class with the relevant classification society free of
all overdue recommendations and conditions of such classification society; and

 

(c)                                  it is insured in accordance with the provisions of this Agreement
and all requirements therein in respect of insurances have been complied with.

 

9                                         A favourable opinion from an independent insurance consultant
acceptable to the Agent on such matters relating to the insurances for each
Ship as the agent may require.

 

10                                  Documents establishing that each Ship is managed by the Approved
Manager on terms reasonably acceptable to the Agent, together with:

 

(a)                                  a letter of undertaking executed by the relevant Approved Manager in
favour of the Agent (with a copy of the technical management agreement
attached) on the terms reasonably required by the Agent agreeing certain
matters in relation to the technical management of that Ship and subordinating the
rights of the relevant Approved Manager against that Ship and the relevant
Owner to the rights of the Creditor Parties under the Finance Documents Provided that copies of management
agreements and a manager’s undertaking shall not be required in relation to the
technical management of the Collateral Ships (other than VORNAES II) which are
managed by Britannia Bulk DK A/S; and

 

70

 

(b)           copies of the Approved Manager’s Document of Compliance and of each
Ship’s Safety Management Certificate (together with any other details of the
applicable safety management system which the Agent requires) and ISSC Provided that such certificates shall not
be required for any of the barges and the ISSC shall not be required for the
tugs other than VORNAES II.

 

11           Copies
of the tonnage certificate and certificates of nationality for each Ship.

 

12           If
the Drawdown Date has not occurred by 30 June 2008 and at the request of
the Agent, two valuations in respect of each Ship, addressed to the Agent,
stated to be for the purposes of this Agreement and dated not earlier than 30
days before the Drawdown Date provided in accordance with Clause 15.

 

13           Copies
as requested by each Lender of such documentation required pursuant to Clause 11.18.

 

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

 

71

 

PART B

 

The following
are the documents referred to in Clause 9.1(c).

 

1                                         A duly executed original of each Mortgage, the Pledge of Mortgage,
each Deed of Covenant, each General Assignment, each Charter Assignment (if
applicable), each Guarantee, each Master Agreement, the Master Agreement Assignment
and the Accounts Pledge (and of each document required to be delivered by each
such document).

 

2                                         Documentary evidence that the existing indebtedness of the Borrower
in relation to the Lloyds Facility and the Goldman Sachs Facility will be repaid
upon application of the proceeds of the Loan and any Security Interests created
pursuant to the Lloyds Facility and the Goldman Sachs Facility will be released
or discharged upon such application.

 

3                                         Documentary evidence that (a) the Borrower has repurchased,
redeemed, prepaid or retired, or on the Drawdown Date the Borrower will
repurchase, redeem, prepay or retire (whether in market purchases, pursuant to
a tender offer, contractual prepayment rights or otherwise) all outstanding
Bonds (excluding those to be redeemed as provided in the following clause (b)),
and (b) with respect to any Bonds not repurchased, redeemed, prepaid or
retired on or before the Drawdown Date as contemplated by clause (a) preceding
(“Remaining Bonds”), the Borrower has
delivered, or on the Drawdown Date the Borrower will deliver, to the trustee
under the Indenture (i) notice of redemption of such Remaining Bonds
pursuant to Section 3.07 of the Indenture calling such Bonds for
redemption on or before the 90th day following the Drawdown Date, (ii) cash
sufficient to pay and discharge the entire indebtedness (including all
principal, premium, if any, and accrued interest on such Remaining Bonds, and (iii) notice
to apply such cash to the payment of the Remaining Bonds on their redemption
date (in the case of clause (ii) and (iii) as provided in Section 8.01(b) of
the Indenture).

 

4                                         Documentary evidence that the Shareholder Guarantor has completed an
initial public offering (the “IPO”) of its
shares resulting in minimum proceeds of USD 125,000,000 (with the net proceeds
to be paid to the Shareholder Guarantor not later than the Drawdown Date) and
that the Shareholder Guarantor’s shares have been listed on the NYSE.

 

5                                         Documentary evidence that each Ship:

 

(a)                                  is in the absolute and unencumbered ownership of the relevant Owner
save as contemplated by the Finance Documents; and

 

(b)                                 the Mortgage in relation to it has been duly registered against that
Ship as valid first preferred or priority (as the case may be) ship mortgage in
accordance with the laws of jurisdiction in which that Ship is registered.

 

6                                         Favourable legal opinions from lawyers appointed by the Agent on
such matters concerning the laws of England, Panama, Denmark, Malta, the
Marshall Islands and such other relevant jurisdictions as the Agent may
reasonably require.

 

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

 

Each
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or secretary (or equivalent officer) or an attorney
of the Borrower.

 

72

 

SCHEDULE 4

TRANSFER CERTIFICATE

 

The
Transferor and the Transferee accept exclusive responsibility for ensuring that
this Certificate and the transaction to which it relates comply with all legal
and regulatory requirements applicable to them respectively.

 

To:                              [Name of Agent] for itself and for and on behalf of the Borrower, each
Security Party, the Security Trustee, each Lender, each Swap Bank and the
Arrangers, as defined in the Loan Agreement referred to below.

 

1                                         This Certificate relates to a loan agreement (the “Loan Agreement”) dated [·] 2008 and made between (1) Britannia
Bulk Plc (the “Borrower”), (2) the banks and
financial institutions named therein as Lenders, (3) Nordea Bank Danmark
A/S and Lloyds TSB Bank plc as Arrangers, (4) the banks and financial
institutions named therein as Swap Banks, (5) Nordea Bank Danmark A/S as
Agent and (6) Nordea Bank Danmark A/S as Security Trustee for a term loan
facility of US$170,000,000.

 

2                                         In this Certificate, terms defined in the Loan Agreement shall,
unless the contrary intention appears, have the same meanings and:

 

“Relevant Parties” means the Agent, the Borrower, each
Security Party, the Security Trustee, the Arranger, each Lender and each Swap
Bank;

 

“Transferor” means [full name] of [lending office]; and

 

“Transferee” means [full name] of [lending office].

 

3                                         The effective date of this Certificate is [·] Provided that this
Certificate shall not come into effect unless it is signed by the Agent on or
before that date.

 

4                                         The Transferor assigns to the Transferee absolutely all rights and
interests (present, future or contingent) which the Transferor has as Lender
under or by virtue of the Loan Agreement and every other Finance Document in
relation to [·] per cent. of its Contribution, which percentage represents $[·].

 

5                                         By virtue of this Transfer Certificate and Clause 26 of the Loan
Agreement, the Transferor is discharged [entirely from its Commitment which
amounts to $[·] [from [·] per cent. of its Commitment, which percentage represents $[·]],
and the Transferee acquires a Commitment of $[·].

 

6                                         The Transferee undertakes with the Transferor and each of the
Relevant Parties that the Transferee will observe and perform all the
obligations under the Finance Documents which Clause 26 of the Loan Agreement
provides will become binding on it upon this Certificate taking effect.

 

7                                         The Agent, at the request of the Transferee (which request is hereby
made) accepts, for the Agent itself and for and on behalf of every other
Relevant Party, this Certificate as a Transfer Certificate taking effect in
accordance with Clause 26 of the Loan Agreement.

 

8                                         The Transferor:

 

(a)                                  warrants to the Transferee and each Relevant Party that:

 

73

 

(i)            the Transferor has full capacity
to enter into this transaction and has taken all corporate action and obtained
all consents which are required in connection with this transaction; and

 

(ii)           this Certificate is valid and
binding as regards the Transferor;

 

(b)                                 warrants to the Transferee that the Transferor is absolutely
entitled, free of encumbrances, to all the rights and interests covered by the
assignment in paragraph 4; and

 

(c)                                  undertakes with the Transferee that the Transferor will, at its own
expense, execute any documents which the Transferee reasonably requests for
perfecting in any relevant jurisdiction the Transferee’s title under this
Certificate or for a similar purpose.

 

9                                         The Transferee:

 

(a)                                  confirms that it has received a copy of the Loan Agreement and each
other Finance Document;

 

(b)                                 agrees that it will have no rights of recourse on any ground against
either the Transferor, the Agent, the Security Trustee, the Arranger, the Swap
Bank or any Lender in the event that:

 

(i)            any of the Finance Documents
prove to be invalid or ineffective,

 

(ii)           the Borrower or any Security
Party fails to observe or perform its obligations, or to discharge its
liabilities, under any of the Finance Documents;

 

(iii)          it proves impossible to realise
any asset covered by a Security Interest created by a Finance Document, or the
proceeds of such assets are insufficient to discharge the liabilities of the
Borrower or any Security Party under any of the Finance Documents;

 

(c)                                  agrees that it will have no rights of recourse on any ground against
the Agent, the Security Trustee, the Arranger, the Swap Bank or any Lender in
the event that this Certificate proves to be invalid or ineffective;

 

(d)                                 warrants to the Transferor and each Relevant Party that:

 

(i)            it has full capacity to enter
into this transaction and has taken all corporate action and obtained all
consents which it needs to take or obtain in connection with this transaction;
and

 

(ii)           this Certificate is valid and
binding as regards the Transferee; and

 

(e)                                  confirms the accuracy of the administrative details set out below
regarding the Transferee.

 

10                                  The Transferor and the Transferee each undertake with the Agent and
the Security Trustee severally, on demand, fully to indemnify the Agent and/or
the Security Trustee in respect of any claim, proceeding, liability or expense
(including all legal expenses) which they or either of them may incur in
connection with this Certificate or any matter arising out of it, except such
as are shown to have been mainly and directly caused by the gross and culpable
negligence or dishonesty of the Agent’s or the Security Trustee’s own officers
or employees.

 

11                                  The Transferee shall repay to the Transferor on demand so much of
any sum paid by the Transferor under paragraph 10 as exceeds one-half of the
amount demanded by the Agent 

 

74

 

or the Security Trustee in respect of a
claim, proceeding, liability or expense which was not reasonably foreseeable at
the date of this Certificate; but nothing in this paragraph shall affect the
liability of each of the Transferor and the Transferee to the Agent or the
Security Trustee for the full amount demanded by it.

 

 

	
  [Name of
  Transferor]

  	
   

  	
  [Name of
  Transferee]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Date:

  

 

Agent

 

Signed for
itself and for and on behalf of itself

as Agent and
for every other Relevant Party

 

[Name of Agent]

 

By:

 

Date:

 

75

 

Administrative
Details of Transferee

 

Name of
Transferee:

 

Lending
Office:

 

Contact Person

(Loan
Administration Department):

 

Telephone:

 

Telex:

 

Fax:

 

Contact Person

(Credit
Administration Department):

 

Telephone:

 

Telex:

 

Fax:

 

Account for
payments:

 

Note:                  This Transfer Certificate alone may not be sufficient to transfer a
proportionate share of the Transferor’s interest in the security constituted by
the Finance Documents in the Transferor’s or Transferee’s jurisdiction.  It is the responsibility of each Lender to
ascertain whether any other documents are required for this purpose.

 

76

 

SCHEDULE 5

DETAILS OF FACILITY SHIPS AND OWNERS

 

	
   

  	
  Owner

  	
   

  	
  Ship Name

  	
   

  	
  Flag

  	
   

  	
  Year

  built

  	
   

  	
  Ship

  type

  	
   

  	
  Approximate

  Size (dwt)

  	
   

  	
  IMO

  Number

  	
   

  	
  Classification

  Society

  	
   

  	
  Class notation

  	
   

  	
  Weight Share

  of Loan

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
  Flagship
  Maritime SA

  	
   

  	
  EXPLORER II

  	
   

  	
  Panama

  	
   

  	
  1977

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  39,814

  	
   

  	
  7612723

  	
   

  	
  RINA

  	
   

  	
  100 – A – 1.1 – Nav IL ; BC ESP

  	
   

  	
  2 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  Danmar
  Shipping SA

  	
   

  	
  CHALLENGER
  II

  	
   

  	
  Panama

  	
   

  	
  1977

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  39,814

  	
   

  	
  7612735

  	
   

  	
  RINA

  	
   

  	
  100 – A –
  1.1 – NAVIL ; BC ESP

  	
   

  	
  2 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Northern
  Star Navigation SA

  	
   

  	
  ADVENTURE II

  	
   

  	
  Panama

  	
   

  	
  1980

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  38,871

  	
   

  	
  7900261

  	
   

  	
  RINA

  	
   

  	
  C bulk
  carrier ESP – heavycargo –

  nonhomload ; unrestricted 

  navigation

  	
   

  	
  2.5 per
  cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Baltic
  Navigation Company SA

  	
   

  	
  VOYAGER II

  	
   

  	
  Panama

  	
   

  	
  1986

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  33,288

  	
   

  	
  8313972

  	
   

  	
  RINA

  	
   

  	
  C bulk
  carrier ESP – heavycargo –

  nonhomload ; unrestricted 

  navigation ICE CLASS IC

  	
   

  	
  5 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Britannia
  Bulk SA

  	
   

  	
  DISCOVERY II

  	
   

  	
  Panama

  	
   

  	
  1984

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  32,813

  	
   

  	
  8107311

  	
   

  	
  RINA

  	
   

  	
  C bulk
  carrier ESP – heavycargo – 

  nonhomload ; unrestricted 

  navigation ICE CLASS IC

  	
   

  	
  4.5 per
  cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  International
  Bulk Services SA

  	
   

  	
  COMMANDER II

  	
   

  	
  Panama

  	
   

  	
  1983

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  31,000

  	
   

  	
  8208945

  	
   

  	
  NIPPON KAIJI

  KYOKAI

  	
   

  	
  NS (Bulk Carrier) (ESP)
  MNS

  	
   

  	
  4 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Western Bulk
  Services SA

  	
   

  	
  ENFORCER II

  	
   

  	
  Malta

  	
   

  	
  1981

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  23,800

  	
   

  	
  8103171

  	
   

  	
  RINA

  	
   

  	
  100 – A – 1.1 – Nav IL ; BC ESP

  	
   

  	
  3 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  Unity Bulk
  Services S.A.

  	
   

  	
  DEFIANT II

  	
   

  	
  Panama

  	
   

  	
  1978

  	
   

  	
  Bulk 

  carrier

  	
   

  	
  10,000

  	
   

  	
  7531357

  	
   

  	
  LLOYDS

  REGISTER

  	
   

  	
  100A1;
  STRENGTHENED FOR 

  HEAVY CARGOES; ICE 

  CLASS 1A, MAX / MIN 

  DRAUGHTS, FORWARD 8.574 / 

  3.16 M, AFT 8.680/ 4.80 M,

  	
   

  	
  0.45 per
  cent.

  

 

77

 

	
   

  	
  Owner

  	
   

  	
  Ship Name

  	
   

  	
  Flag

  	
   

  	
  Year

  built

  	
   

  	
  Ship

  type

  	
   

  	
  Approximate

  Size (dwt)

  	
   

  	
  IMO

  Number

  	
   

  	
  Classification

  Society

  	
   

  	
  Class notation

  	
   

  	
  Weight Share

  of Loan

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Navigator Bulk Services S.A.

  	
   

  	
  NAVIGATOR II

  	
   

  	
  Panama

  	
   

  	
  1998

  	
   

  	
  Bulk carrier

  	
   

  	
  69,800

  	
   

  	
  9057458

  	
   

  	
  RINA

  	
   

  	
  C bulk carrier ESP ;
  unrestricted navigation AUT-UMS

  	
   

  	
  17.45 per cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Atlantic
  Bulk Services S.A.

  	
   

  	
  ENDEAVOUR II

  	
   

  	
  Panama

  	
   

  	
  1994

  	
   

  	
  Bulk carrier

  	
   

  	
  70,000

  	
   

  	
  9052604

  	
   

  	
  RINA

  	
   

  	
  C bulk
  carrier ESP, strengthened for heavy cargoes, Nos.2,4&6 holds may be empty
  AUT – UMS,

  	
   

  	
  16.10 per
  cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
  Great Belt
  Shipping Company S.A.

  	
   

  	
  ENDURANCE II

  	
   

  	
  Panama

  	
   

  	
  1994

  	
   

  	
  Bulk carrier

  	
   

  	
  70,000

  	
   

  	
  9055620

  	
   

  	
  RINA

  	
   

  	
  C bulk
  carrier ESP – heavycargo – nonhomload ; unrestricted navigation AUT - UMS

  	
   

  	
  16.10 per
  cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Oceanic Bulk
  Services S.A.

  	
   

  	
  ICE TRADER
  II

  	
   

  	
  Panama

  	
   

  	
  1995

  	
   

  	
  Bulk carrier

  	
   

  	
  43,500

  	
   

  	
  9079157

  	
   

  	
  Germanischer
  Lloyd

  	
   

  	
  100 A5 E3
  with freeboard 5,120m G ESP SOLAS-II-2 Reg.19 DBC C2P55 Bulk Carrier. Holds
  2,4 or 3 may be empty

  	
   

  	
  13.45 per
  cent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Enterprise Bulk Services S.A.

  	
   

  	
  ICE POWER II

  	
   

  	
  Panama

  	
   

  	
  1995

  	
   

  	
  Bulk carrier

  	
   

  	
  43,500

  	
   

  	
  9079169

  	
   

  	
  Germanischer
  Lloyd

  	
   

  	
  100 A5 E3
  with freeboard 5,120 m G ESP SOLAS-II-2,Reg.19 C2P55 Bulk Carrier, Holds
  2 & 4 or 3 may be empty

  	
   

  	
  13.45 per
  cent.

  

 

78

 

SCHEDULE 6

DETAILS OF COLLATERAL SHIPS AND OWNERS

 

	
   

  	
   

  	
  Owner

  	
   

  	
  Ship Name

  	
   

  	
  Flag

  	
   

  	
  Year

  built

  	
   

  	
  Ship type

  	
   

  	
  Approximate

  Size (dwt)

  	
   

  	
  IMO

  Number

  	
   

  	
  Classification

  Society

  	
   

  	
  Class notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  BREGNINGE II

  	
   

  	
  Denmark

  	
   

  	
  1984

  	
   

  	
  Tug

  	
   

  	
  N/A

  	
   

  	
  8207379

  	
   

  	
  RINA

  	
   

  	
  C
  Tug AUT – UMS , ICE CLASS IC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  TROENSE II

  	
   

  	
  Denmark

  	
   

  	
  1983

  	
   

  	
  Tug

  	
   

  	
  N/A

  	
   

  	
  8131116

  	
   

  	
  RINA

  	
   

  	
  C Tug AUT – UMS , ICE
  CLASS IC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  VINDEBY II

  	
   

  	
  Denmark

  	
   

  	
  1981

  	
   

  	
  Tug

  	
   

  	
  N/A

  	
   

  	
  7928158

  	
   

  	
  RINA

  	
   

  	
  C Tug AUT – UMS , ICE CLASS IC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Channel Bulk Services S.A.

  	
   

  	
  VORNAES II

  	
   

  	
  Panama

  	
   

  	
  1970

  	
   

  	
  Tug

  	
   

  	
  N/A

  	
   

  	
  7041352

  	
   

  	
  RINA

  	
   

  	
  C Tug ICE CLASS IB

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  HJORTO II

  	
   

  	
  Denmark

  	
   

  	
  1992

  	
   

  	
  Barge

  	
   

  	
  15,800

  	
   

  	
  9043378

  	
   

  	
  RINA

  	
   

  	
  C Barge – general cargo ;
  Unrestricted Navigation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  SKARO II

  	
   

  	
  Denmark

  	
   

  	
  1992

  	
   

  	
  Barge

  	
   

  	
  15,800

  	
   

  	
  9043366

  	
   

  	
  RINA

  	
   

  	
  C Barge – general cargo ;
  Unrestricted Navigation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  SIO II

  	
   

  	
  Denmark

  	
   

  	
  1991

  	
   

  	
  Barge

  	
   

  	
  15,800

  	
   

  	
  9006461

  	
   

  	
  RINA

  	
   

  	
  C Barge – general cargo ;
  Unrestricted Navigation ICE CLASSIC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  DREJO II

  	
   

  	
  Denmark

  	
   

  	
  1991

  	
   

  	
  Barge

  	
   

  	
  15,800

  	
   

  	
  9006473

  	
   

  	
  RINA

  	
   

  	
  C Barge – general cargo ;
  Unrestricted Navigation ICE CLASSIC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Britannia Bulk DK A/S

  	
   

  	
  IHOLM II

  	
   

  	
  Denmark

  	
   

  	
  1979

  	
   

  	
  Barge

  	
   

  	
  9,370

  	
   

  	
  7726768

  	
   

  	
  RINA

  	
   

  	
  C Barge – general cargo ;
  Unrestricted Navigation ICE CLASSIC

  

 

79

 

EXECUTION PAGES

 

	
  BORROWER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  ARVID TAGE

  
	
   

  	
  )

  	
   

  
	
  for and on
  behalf of

  	
  )

  	
  FARIYAL
  KHANBABI

  
	
  BRITANNIA BULK PLC

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  PETER YOUNG

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  VINSON &
  ELKINS, CITYPOINT, ONE 

  
	
   

  	
   

  	
  ROPEMAKER
  STREET, LONDON, EC2

  
	
   

  	
   

  	
   

  
	
  LENDERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  MICHAEL
  O’DONNELL

  
	
   

  	
  )

  	
  (ATTORNEY-IN-
  FACT)

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  NORDEA BANK DANMARK A/S

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NAHEEMA
  WALJI, SOLICITOR

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  LONDON EC2A
  2HB

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  HELEN LEWIS

  
	
   

  	
  )

  	
   

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  LLOYDS TSB BANK PLC

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NADEEM
  SAMAHA

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  22 OAKHILL
  COURT, UPPER RICHMOND 

  
	
   

  	
   

  	
  ROAD,
  PUTNEY, SW15 2QH

  

 

80

 

	
  ARRANGERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  MICHAEL
  O’DONNELL

  
	
   

  	
  )

  	
  (ATTORNEY-IN-
  FACT)

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  NORDEA BANK DANMARK A/S

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NAHEEMA
  WALJI, SOLICITOR

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  LONDON EC2A
  2HB

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  HELEN LEWIS

  
	
   

  	
  )

  	
   

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  LLOYDS TSB BANK PLC

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NADEEM
  SAMAHA

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  22 OAKHILL
  COURT, UPPER RICHMOND 

  
	
   

  	
   

  	
  ROAD,
  PUTNEY, SW15 2QH

  
	
   

  	
   

  	
   

  
	
  SWAP
  BANKS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  MICHAEL
  O’DONNELL

  
	
   

  	
  )

  	
  (ATTORNEY-IN-
  FACT)

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  NORDEA BANK FINLAND PLC

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NAHEEMA
  WALJI, SOLICITOR

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  LONDON EC2A
  2HB

  

 

81

 

	
  SIGNED
  by

  	
  )

  	
  HELEN LEWIS

  
	
   

  	
  )

  	
   

  
	
  for and on behalf
  of

  	
  )

  	
   

  
	
  LLOYDS TSB BANK PLC

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NADEEM
  SAMAHA

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  22 OAKHILL
  COURT, UPPER RICHMOND 

  
	
   

  	
   

  	
  ROAD,
  PUTNEY, SW15 2QH

  
	
   

  	
   

  	
   

  
	
  AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  MICHAEL
  O’DONNELL

  
	
   

  	
  )

  	
  (ATTORNEY-IN-
  FACT)

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  NORDEA BANK DANMARK A/S

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NAHEEMA
  WALJI, SOLICITOR

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  LONDON EC2A
  2HB

  
	
   

  	
   

  	
   

  
	
  SECURITY
  TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by

  	
  )

  	
  MICHAEL
  O’DONNELL

  
	
   

  	
  )

  	
  (ATTORNEY-IN-
  FACT)

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  NORDEA BANK DANMARK A/S

  	
  )

  	
   

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of
  witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of
  witness:

  	
   

  	
  NAHEEMA
  WALJI, SOLICITOR

  
	
   

  	
   

  	
   

  
	
  Address of
  witness:

  	
   

  	
  LONDON EC2A
  2HB

  

 

82Filed by sedaredgar.com  - Exhibit 10.1

	 	LAMPERD Less Lethal 
	 	1200 Michener Road 
	 	Sarnia, Ontario, N7T 7H8 
	 	Canada 

Dear Sirs,

Re: Collaboration between our companies

Further to your request we are pleased to confirm our basic
agreement as to the use of the FN303 in the context of  your video-based
training system.

Please find below the generic principles organizing such use
and the guidelines of our collaboration in this context.

The FNH general objective through this collaboration with
Lamperd ("the Collaboration") is to support the promotion of the FN 303 system
produced and commercialized by FNH through a video-based training system
developed and commercialized by Lamperd.

FNH agrees to have the FN303 in the Lamperd system
provided:

	
    FNH will be consulted on the scenarios displayed by the
      system to ensure they are consistent with FNH appropriate marketing
      messages. 

  
	
    FNH will have the right to add any disclaimer/warning
      messages that seems appropriate, notably for safety or security reasons,
      on the operator manual or elsewhere.  

  
	
    Lamperd agrees to let FNH freely use its system for its
      own product demos and have Lamperd reference used for promotion purposes.
      In this context, FNH will notably have the right to use the system to
      demonstrate its product on shows or at customers training centres.  

  
	Lamperd shall at any time take any action or measure to
    comply with all import and export regulations that may be applicable. 

Both parties agree that in terms of liability:

	
  Any loss, damage or injury of non-nuclear origin suffered by one Party in
  connection with the performance of this Collaboration shall be borne
  exclusively by it. 

  
	
  Each Party shall be exclusively liable for any loss, damage or injury of
  non- nuclear origin caused by its personnel to third parties in their
  facilities, arising out of the performance of the Collaboration. 

  
	
  Each Party shall indemnify the other Party for all liability in respect of
  any action for damages brought by third parties and caused by their respective
  personnel.

All technical and/or commercial data, industrial or commercial
know-how and all information of whatever kind or nature regarding the FN303
system and/or any of  its components ("the Proprietary Information") is and
shall be regarded and treated by Lamperd as strictly confidential and shall not
be used for any purpose other than the purpose of this collaboration nor be
disclosed by Lamperd, its agents and employees to any third party provided,
however, that the said data, know-how and information shall not come into the
public domain through no fault on the part of Lamperd, its agents or employees.
This commitment shall remain in force and binding upon Lamperd, its agents and
employees even for a period of  thirty (30) years after the signing of this
letter.

This Collaboration shall remain valid for an unlimited period
of time, each party being however entitled to terminate it upon a one-month
prior written notice to the other party.

Upon termination of this Collaboration, Lamperd shall
immediately cease to use any FN303 reference or FN303 related reference. lt
shall return to FNH all documents in Lamperd's possession or under its,direct or
indirect, control and/or authority relating to any confidential information,
including any and all copies thereof.

This Collaboration shall be governed by and construed in
accordance with the laws of Belgium. Any controversy or claim arising out of or
relating to this Collaboration, or the breach thereof, shall be settled by
arbitration according to the rules of CEPANI by one or more arbitrators
appointed in accordance with said rules. The language of the arbitration shall
be in English. The place of arbitration shall be Lidge (Belgium).  Any
dispute between the contracting parties shall be subject to prior
conciliation.

Nothing herein shall be interpreted or construed to grant to
Lamperd any licenses or rights of ownership in the Proprietary Information,
which shall at all times remain the property of FNH.

For the sake of good order, could you please send back an
original copy of this document, duly signed for approval by your authorized
representatives.

	Sincerely yours,	 
	  	  
	/s/ P. Renier                        	/s/ Cl. Dello                            
	P. Renier	Cl. Dello
	MarketingDirector 	Head of US Affairs
	 	  
	  	  
	For approval, 	  
	 	 
	/s/ Barry Lamperd                           	  
	Lamperd authorized representative

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