Document:

d867882_ex4-9.htm

    Exhibit 4.9

    

    Dated     May
2007

    

    DRYSHIPS
INC.

    as
Borrower

    

    - and
-

    

    

    THE
BANKS AND FINANCIAL INSTITUTIONS

    listed
in Schedule 1

    as
Lenders

    

    - and
-

    

    

    HSH
NORDBANK AG

    as Agent
and Security Trustee

    

    - and
-

    

    

    HSH
NORDBANK AG

    as Lead
Arranger and Lead Bookrunner

    

    - and
-

    

    

    THE
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

    as Joint
Bookrunner

    

    - and
-

    

    THE
BANKS AND FINANCIAL INSTITUTIONS

    listed
in Part B of Schedule 1

    as Swap
Banks

    

                                                                                                                           

     

    AMENDING
AND RESTATING AGREEMENT

                                                                                                                           

    

    relating
to a term loan and short-term credit facilities of up to
US$138,335,751.40

    in
aggregate to refinance certain existing indebtedness, to provide
working

    capital
and to finance part of the purchase price of certain additional
vessels

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

     

    

    INDEX

    

    

    Clause Page

     

    

      
        	
                1

              	
                INTERPRETATION

              	
                2

              
	
                2

              	
                AGREEMENT
      OF ALL PARTIES TO THE AMENDMENT OF THE LOAN AGREEMENT, MASTER AGREEMENTS
      AND EXISTING FINANCE DOCUMENTS

              	
                2

              
	
                3

              	
                CONDITIONS
      PRECEDENT

              	
                3

              
	
                4

              	
                REPRESENTATIONS
      AND WARRANTIES

              	
                3

              
	
                5

              	
                AMENDMENT
      OF LOAN AGREEMENT, MASTER AGREEMENTS AND EXISTING FINANCE
      DOCUMENTS

              	
                4

              
	
                6

              	
                FURTHER
      ASSURANCES

              	
                5

              
	
                7

              	
                FEES
      AND EXPENSES

              	
                5

              
	
                8

              	
                NOTICES

              	
                5

              
	
                9

              	
                SUPPLEMENTAL

              	
                5

              
	
                10

              	
                LAW
      AND JURISDICTION

              	
                6

              
	
                SCHEDULE
      1

              	 
      	
                7

              
	
                PART
      A

              	 
      	
                7

              
	
                LENDERS
      AND COMMITMENTS

              	 
      	
                7

              
	
                PART
      B

              	 
      	
                7

              
	
                SWAP
      BANKS

              	 
      	
                7

              
	
                EXECUTION
      PAGES

              	 
      	
                8

              
	
                SECURITY
      PARTIES’ CONFIRMATION

              	 
      	
                10

              
	
                APPENDIX   FORM
      OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE AMENDMENTS TO
      THE LOAN AGREEMENT

              	 
      	
                13

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    THIS AGREEMENT is made
on         May 2007

     

    BETWEEN

     

    
      	
              (1)

            	
              DRYSHIPS INC. a
      corporation incorporated in the Marshall Islands whose registered office
      is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The
      Marshall Islands MH 96960 as Borrower;

            

    

     

    
      	
              (2)

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

            

    

     

    
      	
              (3)

            	
              HSH NORDBANK AG acting
      through its office at Gerhart-Hauptmann-Platz 50, D-20095, Hamburg,
      Germany, as Agent;

            

    

     

    
      	
              (4)

            	
              HSH NORDBANK AG acting
      through its office at Gerhart-Hauptmann-Platz 50, D-20095, Hamburg,
      Germany, as Security Trustee;

            

    

     

    
      	
              (5)

            	
              HSH NORDBANK AG acting
      through its office at Gerhart-Hauptmann-Platz 50, D-20092, Germany, as
      Lead Arranger and
      as Lead
      Bookrunner;

            

    

     

    
      	
              (6)

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

            

    

     

    
      	
              (7)

            	
              HSH NORDBANK AG acting
      through its office at Gerhart-Hauptmann-Platz 50, D-20095, Hamburg,
      Germany and THE GOVERNOR
      AND COMPANY OF THE BANK OF SCOTLAND acting through its office at
      Pentland House, 8 Lochside Avenue, Edinburgh EH12 9DJ, Scotland, as Joint Underwriters;
      and

            

    

     

    
      	
              (8)

            	
              THE BANKS AND FINANCIAL
      INSTITUTIONS  listed in Part B of Schedule 1, as Swap
    Banks.

            

    

     

     

    BACKGROUND

     

    
      	
              (A)

            	
              By
      a loan agreement dated 31 March 2006 (as supplemented and amended by a
      supplemental letter dated 15 May 2006 and as further amended and
      supplemented by a supplemental agreement dated 29 November 2006, the
      “Loan
      Agreement”) and made between
      (i) the Borrower, (ii) the Lenders, (iii) the Agent, (iv) the Security
      Trustee, (v) the Lead Arranger, (vi) the Lead Bookrunner, (vii) the Joint
      Bookrunner, (vii) the Joint Underwriters and (ix) the Swap Banks, the
      Lenders agreed to make available to the Borrower both term loan and
      short-term credit facilities of up to US$112,587,543 in
      aggregate.

            

    

     

    
      	
              (B)

            	
              The
      aggregate principal amount outstanding under the Loan Agreement as at the
      date of this Agreement is
US$96,448,713.

            

    

     

    
      	
              (C)

            	
              By
      two ISDA master agreements (each on the 1992 ISDA Master Agreement
      (Multicurrency-crossborder) form) and each dated 31 March 2006 (the “Master Agreement”) made
      between the Borrower and a Swap Bank, the Borrower has entered into or
      will enter into certain Designated Transactions (as such term is defined
      in the said Loan Agreement) pursuant to separate Confirmations (as such
      term is defined in the said Loan
Agreement).

            

    

     

    
      	
              (D)

            	
              Subject
      to the terms and conditions of this Agreement, the Lenders have
      agreed:

            

    

     

    

    
      
         

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              (i)

            	
              to
      an increase in the Credit Facility of up to $28,960,000 in order to assist
      the Borrower in part-financing the purchase price of certain Additional
      Ships and certain Identified Ships;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              to
      grant an option to the Borrower allowing mandatory prepayment amounts of
      up to $34,400,000 (of which an amount of $12,927,038.40 represents the
      aggregate mandatory prepayment amounts made on or prior to the date of
      this Agreement) in aggregate (which amounts are due and payable upon the
      sale of any Existing Ship) to be
re-borrowed.

            

    

     

     

    IT IS AGREED as
follows:

     

    
      	
              1

            	
              INTERPRETATION

            

    

     

    
      	
              1.1

            	
              Defined
      expressions.  Words and expressions defined in the Loan
      Agreement shall have the same meanings when used in this Agreement unless
      the context otherwise requires.

            

    

     

    
      	
              1.2

            	
              Definitions.  In
      this Agreement, unless the contrary intention
  appears:

            

    

     

    “Amended and Restated Loan
Agreement”  means the Loan Agreement as amended and restated by
this Agreement in the form set out in the Appendix;

     

    “Effective
Date”  means the date on which the Agent notifies the Borrower
and the Creditor Parties that the conditions precedent in Clause 3 have been
fulfilled;

     

    “Existing Finance
Documents”  means the Finance Documents to which the Borrower
is a party which have been executed prior to the date hereof;

     

    “Loan
Agreement”  means the loan agreement dated 31 March 2006 (as
supplemented and amended by a supplemental letter dated 15 May 2006 and as
further amended and supplemented by a supplemental agreement dated 29 November
2006) referred to in Recital (A);

     

    “Mortgage
Amendment”  means, in relation to each Existing Ship which is
the subject of a Mortgage as at the date of this Agreement, the amendment to the
Mortgage relating to that Existing Ship, executed or to be executed by the
relevant Owner in favour of the Security Trustee in such form as the Lenders may
approve or require; and

     

    “Security Parties’
Confirmation”  means the confirmation set out at the end of
this Agreement executed or to be executed by the Security Parties.

     

    
      	
              1.3

            	
              Application of construction and
      interpretation provisions of Loan Agreement.  Clauses
      1.2, 1.5 and 1.6 of the Loan Agreement apply, with any necessary
      modifications, to this Agreement.

            

    

     

    
      	
              2

            	
              AGREEMENT
      OF ALL PARTIES TO THE AMENDMENT OF THE LOAN AGREEMENT, MASTER AGREEMENTS
      AND EXISTING FINANCE DOCUMENTS

            

    

     

    
      	
              2.1

            	
              Agreement of the parties to
      this Agreement.  The parties to this Agreement agree,
      subject to and upon the terms and conditions of this Agreement, to the
      amendment of the Loan Agreement, the Master Agreements and the Existing
      Finance Documents to be made pursuant to Clauses 5.1, 5.2, 5.3 and
      5.4.

            

    

     

    
      	
              2.2

            	
              Effective Date. The
      agreement of the parties to this Agreement contained in Clause 2.1 shall
      have effect on and from the Effective
Date.

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              3

            	
              CONDITIONS
      precedent

            

    

     

    
      	
              3.1

            	
              General.  The
      agreement of the parties to this Agreement contained in Clause 2.1 is
      subject to the fulfilment of the conditions precedent in Clause
      3.2.

            

    

     

    
      	
              3.2

            	
              Conditions
      precedent.  The conditions referred to in Clause 3.1 are
      that the Agent shall have received the following documents and evidence in
      all respects in form and substance satisfactory to the Agent and its
      lawyers on or before 15 April 2007 or such later date as the Joint
      Underwriters may agree with the
Borrower:

            

    

     

    
      	
              (a)

            	
              in
      relation to the Borrower and each Owner of an Existing Ship, documents of
      the kind specified in paragraphs 2, 3, 4 and 5 of Part A of Schedule 5 of
      the Loan Agreement with appropriate modifications to refer to this
      Agreement, the Security Parties’ Confirmation and each Mortgage Amendment
      insofar as each is a party thereto;

            

    

     

    
      	
              (b)

            	
              a
      duly executed original of this Agreement duly executed by the parties to
      it;

            

    

     

    
      	
              (c)

            	
              evidence
      that an amount of not less than $5,000,000 is standing to the credit of
      the Debt Service Reserve Account;

            

    

     

    
      	
              (d)

            	
              all
      documentation required by each Creditor Party in relation to the Borrower
      and any Security Party pursuant to that Creditor Party’s “know your
      customer” requirements;

            

    

     

    
      	
              (e)

            	
              documentary
      evidence that the agent for service of process named in Clause 30 of the
      Loan Agreement has accepted its appointment under this Agreement and the
      other Finance Documents;

            

    

     

    
      	
              (f)

            	
              favourable
      legal opinions from lawyers appointed by the Agent on such matters
      concerning the laws of the Marshall Islands, Malta, England, Germany and
      such other relevant jurisdictions as the Agent may
  require;

            

    

     

    
      	
              (g)

            	
              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;

            

    

     

    
      	
              (h)

            	
              a
      duly executed original of each Mortgage
  Amendment;

            

    

     

    
      	
              (i)

            	
              documentary
      evidence that each Mortgage Amendment has been duly registered against the
      relevant Existing Ship as a valid amendment to the Mortgage over that
      Existing Ship according to the laws of
Malta;

            

    

     

    
      	
              (j)

            	
              a
      duly executed original of the Security Parties’
    Confirmation;

            

    

     

    
      	
              (k)

            	
              any
      further opinions, consents, agreements and documents in connection with
      this Agreement and the Finance Documents which the Lender may request by
      notice to the Borrower prior to the Effective Date;
  and

            

    

     

    
      	
              (l)

            	
              evidence
      that the Agent has received the fees payable under Clause
    7.1.

            

    

     

    
      	
              4

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    
      	
              4.1

            	
              Repetition of Loan Agreement
      representations and warranties.  The Borrower represents
      and warrants to the Agent that the representations and warranties in
      Clause 10 of the Loan Agreement, as amended and restated by this Agreement
      and updated with appropriate modifications to refer to this Agreement and,
      where appropriate, each Mortgage Amendment, remain true and not misleading
      if repeated on the date of this Agreement with reference to the
      circumstances now existing.

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              4.2

            	
              Repetition of representations
      and warranties under Existing Finance Documents.  The
      Borrower represents and warrants to the Agent that the representations and
      warranties in the Existing Finance Documents to which it is a party, as
      amended and restated by this Agreement and updated with appropriate
      modifications to refer to this Agreement and, where appropriate, each
      Mortgage Amendment, remain true and not misleading if repeated on the date
      of this Agreement with reference to the circumstances now
      existing.

            

    

     

    
      	
              5

            	
              AMENDMENT
      OF LOAN AGREEMENT, MASTER AGREEMENTS AND EXISTING FINANCE
      DOCUMENTS

            

    

     

    
      	
              5.1

            	
              Amendments
      to Loan Agreement.

            

    

     

    
      	
              (a)

            	
              With
      effect on and from the Effective Date the Loan Agreement shall be, and
      shall be deemed by this Agreement to be, amended and restated in the form
      of the Amended and Restated Loan
Agreement.

            

    

     

    
      	
              (b)

            	
              As
      so amended and restated pursuant to (a) above, the Loan Agreement shall
      continue to be binding on each of the parties to it in accordance with its
      terms as so amended and restated.

            

    

     

    
      	
              5.2

            	
              Amendments to the agreed form
      of Finance Documents yet to be executed.  With effect on
      and from the Effective Date any agreed form Finance Documents shall be
      amended with such logical changes as are necessary to reflect the
      arrangements hereunder.

            

    

     

    
      	
              5.3

            	
              Amendments to Master
      Agreements.  With effect on and from the Effective Date
      each Master Agreement shall be, and shall be deemed by this Agreement to
      be, amended so that the definition of, and references throughout to, the
      Loan Facility and the Credit Support Documents shall be construed as if
      the same referred to the Loan Agreement and those Credit Support Documents
      as amended and restated or supplemented by this Agreement and each
      Mortgage Amendment.

            

    

     

    
      	
              5.4

            	
              Amendments to Existing Finance
      Documents.  With effect on and from the Effective Date
      each of the Existing Finance Documents (other than the Mortgage on each
      Existing Ship which shall be amended and supplemented by the relevant
      Mortgage Amendment) shall be, and shall be deemed by this Agreement to be,
      amended as follows:

            

    

     

    
      	
              (a)

            	
              the
      definition of, and references throughout each of the Existing Finance
      Documents to, the Loan Agreement, the Master Agreements and any of the
      Existing Finance Documents shall be construed as if the same referred to
      the Loan Agreement, the Master Agreements and those Existing Finance
      Documents as amended and restated or supplemented by this
      Agreement;

            

    

     

    
      	
              (b)

            	
              the
      definition of, and references throughout each of the Existing Finance
      Documents to, each Mortgage, shall be construed as if the same referred to
      each such Mortgage as amended and supplemented by the relevant Mortgage
      Amendment; and

            

    

     

    
      	
              (c)

            	
              by
      construing references throughout each of the Existing Finance Documents to
      “this Agreement”, “this Deed”, “hereunder” and other
      like expressions as if the same referred to such Existing Finance
      Documents as amended and supplemented by this
  Agreement.

            

    

     

    
      	
              5.5

            	
              The Master Agreements and the
      Existing Finance Documents to remain in full force and
      effect.  Each Master Agreement and the Existing Finance
      Documents shall remain in full force and effect, as amended
      by:

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              (a)

            	
              the
      amendments contained or referred to in Clause 5.3 and 5.4 and each
      Mortgage Amendment; and

            

    

     

    
      	
              (b)

            	
              such
      further or consequential modifications as may be necessary to give full
      effect to the terms of this
Agreement.

            

    

     

    
      	
              6

            	
              FURTHER
      ASSURANCES

            

    

     

    
      	
              6.1

            	
              Borrower’s obligations to
      execute further documents etc.  The Borrower
      shall:

            

    

     

    
      	
              (a)

            	
              execute
      and deliver to the Agent (or as it may direct) any assignment, mortgage,
      power of attorney, proxy or other document, governed by the law of England
      or such other country as the Agent may, in any particular case,
      specify;

            

    

     

    
      	
              (b)

            	
              effect
      any registration or notarisation, give any notice or take any other
      step;

            

    

     

    which the
Agent may, by notice to the Borrower, specify for any of the purposes described
in Clause 6.2 or for any similar or related
purpose.

     

    
      	
              6.2

            	
              Purposes of further
      assurances.  Those purposes
  are:

            

    

     

    
      	
              (a)

            	
              validly
      and effectively to create any Security Interest or right of any kind which
      the Agent intended should be created by or pursuant to the Loan Agreement
      or any other Finance Document, each as amended and restated or
      supplemented by this Agreement, or by the relevant Mortgage Amendment;
      and

            

    

     

    
      	
              (b)

            	
              implementing
      the terms and provisions of this
Agreement.

            

    

     

    
      	
              6.3

            	
              Terms of further
      assurances.  The Agent may specify the terms of any
      document to be executed by the Borrower under Clause 6.1, and those terms may include any covenants,
      powers and provisions which the Agent considers appropriate to protect its
      interests.

            

    

     

    
      	
              7

            	
              FEES
      AND EXPENSES

            

    

     

    
      	
              7.1

            	
              Facility
      fees.  The Borrower shall pay to the Agent any fees
      previously agreed in writing between the Agent and the
      Borrower.

            

    

     

    
      	
              7.2

            	
              Expenses.  The
      Borrower shall reimburse to the Agent on demand all costs, fees and
      expenses (including, but not limited to, legal fees and expenses) and
      taxes thereon incurred by the Agent or any other Creditor Party in
      connection with the negotiation, preparation and execution of this
      Agreement, each Mortgage Amendment and the Security Parties’
      Confirmation.

            

    

     

    
      	
              8

            	
              NOTICES

            

    

     

    
      	
              8.1

            	
              General.  The
      provisions of Clause 28 (Notices) of the Loan Agreement, as amended and
      restated by this Agreement, shall apply to this Agreement as if they were
      expressly incorporated in this Agreement with any necessary
      modifications.

            

    

     

    
      	
              9

            	
              SUPPLEMENTAL

            

    

     

    
      	
              9.1

            	
              Counterparts.  This
      Agreement may be executed in any number of
  counterparts.

            

    

     

    
      	
              9.2

            	
              Third party
      rights.  Other than a Creditor Party, no person who is
      not a party to this Agreement has any right under the Contracts (Rights of
      Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of
      this Agreement.

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              10

            	
              law
      and jurisdiction

            

    

     

    
      	
              10.1

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

            

    

     

    
      	
              10.2

            	
              Incorporation of the Loan
      Agreement provisions.  The provisions of clause 30 (Law
      and Jurisdiction) of the Loan Agreement, as amended and restated by this
      Agreement, shall apply to this Agreement as if they were expressly
      incorporated in this Agreement with any necessary
      modifications.

            

    

     

    

    THIS AGREEMENT has been duly
executed as a Deed on the date stated at the beginning of this
Agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
1

     

    

     

    PART
A

     

    

     

    LENDERS
AND COMMITMENTS

     

    

    
      	
              Lender

            	
              Lending
      Office

            	
              Term
      Loan

              Commitment

              (US
      Dollars)

            	
              Re-borrowing
      Commitment (in addition to Term Loan Commitment) (US
    Dollars)

            	
              Credit
      Facility Commitment (US Dollars)

               

            
	
              HSH
      Nordbank AG

            	
              Gerhart-Hauptmann-Platz
      50

              D-20095
      Hamburg

              Germany

               

            	
              48,224,356.50

            	
              6,463,519.20

            	
              14,480,000

            
	
              The
      Governor and Company

              of
      the Bank of Scotland

            	
              Pentland
      House

              8
      Lochside Avenue

              Edinburgh
      EH12 9DJ

              Scotland

               

            	
              48,224,356.50

            	
              6,463,519.20

            	
              14,480,000

            

    

    

    

    

    PART
B

     

    SWAP
BANKS

     

    

    
      	
              HSH
      Nordbank AG

            	
              Martensdamm
      6

              D-24103
      Kiel

              Germany

               

            	 
      	 
      
	
              HBOS
      Treasury Services Plc

            	
              33
      Old Broad Street

              London
      EC2N 1HZ

              England

            	 
      	 
      

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    EXECUTION
PAGES

     

    

    BORROWER

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    DRYSHIPS
INC.                                                                  

    

    

    

    

    LENDERS

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    HSH
NORDBANK
AG                                                       )

    

    

    

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    THE GOVERNOR AND COMPANY
OF                         )

    THE BANK OF
SCOTLAND                                             )

    

    

    

    

    AGENT

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    HSH NORDBANK
AG                                                       )

    

    

    

    

    SECURITY
TRUSTEE

    

    SIGNED
by                                                                           )

    for and
on behalf
of                                                                 )

    HSH NORDBANK
AG                                                       )

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    LEAD
ARRANGER/LEAD BOOKRUNNER

    

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    HSH NORDBANK
AG                                                       )

    

    

    

    

    JOINT
BOOKRUNNNER

    

    

    SIGNED
by                                                                          )

    for and
on behalf
of                                                                 )

    THE GOVERNOR AND
COMPANY                               )

    OF THE BANK OF
SCOTLAND                                       )

    

    

    

    

    SWAP
BANKS

    

    

    SIGNED
by                                                                           )

    for and
on behalf
of                                                                 )

    HSH NORDBANK
AG                                                       )

    

    

    SIGNED
by                                                                           )

    for and
on behalf
of                                                                 )

    HBOS TREASURY SERVICES
PLC                                )

    

    

    

    Witness
to all
the                                                                     )

    above
signatures                                                                      )

    

    Name:

    Address:

    

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SECURITY
PARTIES’ CONFIRMATION

    

    

    COUNTERSIGNED  this
day      of May 2007 for and on behalf of the
below companies each of which, by its execution hereof, confirms and
acknowledges that it has read and understood the terms and conditions of this
Amendment and Restatement Agreement, that it agrees in all respects to the same
and that the Finance Documents to which it is a party shall remain in full force
and effect and shall continue to stand as security for the obligations of the
Borrower under the Loan Agreement.

    

    

    
      	 
      	 
      
	 _________________________________	 __________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              WEALTH
      MANAGEMENT INC.

            	
              CELINE
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	 __________________________________	
              __________________________________

            
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              HYDROGEN
      SHIPPING COMPANY LIMITED

               

            	
              TEMPO
      MARINE CO.

            
	 
      	 
      
	 
      	 
      
	 __________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              ANNAPOLIS
      SHIPPING COMPANY LIMITED

            	
              LANCAT
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              TOLAN
      SHIPPING COMPANY LIMITED

            	
              MALVINA
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              ARLETA
      NAVIGATION COMPANY LIMITED

            	
              SELMA
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	 __________________________________	 __________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              ROYERTON
      SHIPPING COMPANY LIMITED

            	
              SAMSARA
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              LANSAT
      SHIPPING COMPANY LIMITED

            	
              FARAT
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              MADRAS
      SHIPPING COMPANY LIMITED

            	
              IGUANA
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              BORSARI
      SHIPPING COMPANY LIMITED

            	
              FELICIA
      NAVIGATION COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              ZATAC
      SHIPPING COMPANY LIMITED

            	
              ONIL
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________	__________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              FAGO
      SHIPPING COMPANY LIMITED

            	
              KARMEN
      SHIPPING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	 _________________________________	 _________________________________
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              FABIANA NAVIGATION COMPANY
      LIMITED

            	
              ARGO
      OWNING COMPANY LIMITED

            
	 
      	 
      
	_________________________________	 _________________________________
      
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              THELMA
      SHIPPING COMPANY LIMITED

            	
              PATERNAL
      OWNING COMPANY LIMITED

            
	 
      	 
      
	 
      	 
      
	 __________________________________ 
      	__________________________________
      
	
              for
      and on behalf of

            	
              for
      and on behalf of

            
	 
      	 
      
	
              MATERNAL
      OWNING COMPANY LIMITED

            	
              SEAVENTURE SHIPPING INC.
      LIMITED

            
	 
      	 
      
	 
      	 
      
	__________________________________
      	 
      
	
              for
      and on behalf of

            	 
      
	 
      	 
      
	
              STAR
      RECORD OWNING COMPANY LIMITED

            	 
      

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    APPENDIX

    

    FORM
OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE AMENDMENTS TO THE LOAN
AGREEMENT

    

    

    

    Amendments
are indicated as follows:

     

    
      	
              1

            	
              additions
      are indicated by underlined text;
and

            

    

     

    
      	
              2

            	
              deletions
      are shown by the relevant text being struck
out.

            

    

     

    

    

    SK 23113
0002 868650d867882_ex4-10.htm

    Exhibit
4.10

    

    DATED                                                            2007

    

    

    

    

    IOLI
OWNING COMPANY LIMITED

    (as
Borrower)

    

    -
and -

    

    DEUTSCHE
SCHIFFSBANK AKTIENGESELLSCHAFT

    (as
Lender)

    

    

    

    

    

    

    

    

    

    ___________________________________

    

    US$35,000,000
SECURED

    LOAN
AGREEMENT

    ___________________________________

    

    

    

    

    

    

    

    

    

    

    

    
      	
              STEPHENSON
      HARWOOD

            
	
              One
      St. Paul’s Churchyard

            
	
              London
      EC4M 8SH

            
	
              Tel:
      020 7329 4422

            
	
              Fax:
      020 7329 7100

            
	
              Ref:
      09.195

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONTENTS

     

    Page

    
      	
              1

            	
              Definitions
      and Interpretation

            	
              1

            
	
              2

            	
              The
      Loan and its Purpose

            	
              11

            
	
              3

            	
              Conditions
      of Utilisation

            	
              11

            
	
              4

            	
              Advance

            	
              12

            
	
              5

            	
              Repayment

            	
              12

            
	
              6

            	
              Prepayment

            	
              13

            
	
              7

            	
              Interest

            	
              14

            
	
              8

            	
              Indemnities

            	
              16

            
	
              9

            	
              Fees  .

            	
              20

            
	
              10

            	
              Security
      and Application of Moneys

            	
              20

            
	
              11

            	
              Representations

            	
              22

            
	
              12

            	
              Undertakings
      and Covenants

            	
              25

            
	
              13

            	
              Events
      of Default

            	
              33

            
	
              14

            	
              Assignment
      and Sub-Participation

            	
              37

            
	
              15

            	
              The
      Master Agreement

            	
              38

            
	
              16

            	
              Set-Off

            	
              39

            
	
              17

            	
              Payments

            	
              40

            
	
              18

            	
              Notices

            	
              41

            
	
              19

            	
              Partial
      Invalidity

            	
              43

            
	
              20

            	
              Remedies
      and Waivers

            	
              43

            
	
              21

            	
              Miscellaneous

            	
              43

            
	
              22

            	
              Law
      and Jurisdiction

            	
              44

            
	 	 
	
              SCHEDULE
      1: Conditions Precedent and Subsequent

            	
              46

            
	
              Part
      I:  Conditions precedent

            	
              46

            
	
              Part
      II: Conditions subsequent

            	
              51

            
	 
      	 
      	 
      
	
              SCHEDULE
      2: Form of Drawdown Notice

            	
              53

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    LOAN
AGREEMENT

     

    
      	
              Dated:

            	
              2007

            

    

     

    BETWEEN:

     

    
      	
              (1)

            	
              IOLI OWNING COMPANY
      LIMITED, a company incorporated under the laws of the Marshall
      Islands whose registered office is at Trust Company Complex, Ajeltake
      Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the ”Borrower”);
      and

            

    

     

    
      	
              (2)

            	
              DEUTSCHE SCHIFFSBANK
      AKTIENGESELLSCHAFT acting through its office at 17, Domshof, 28195,
      Bremen, Federal Republic of Germany (the “Lender”).

            

    

     

    
      	
               
      

            	
              WHEREAS:

            

    

     

    
      	
              (A)

            	
              The
      Borrower has agreed to purchase the Vessel from the Seller on the terms of
      the MOA and intends to register the Vessel under the flag of
      Malta.

            

    

     

    
      	
              (B)

            	
              The
      Lender has agreed to advance to the Borrower an amount not exceeding the
      lesser of (i) seventy per cent (70%) of the Purchase Price and (ii) thirty
      five million Dollars ($35,000,000) in order to assist the Borrower to
      finance part of the Purchase Price of the
  Vessel.

            

    

     

    
      	
              (C)

            	
              Upon
      acquisition of the Vessel, the Borrower would bareboat charter the Vessel
      to the Bareboat Charterer, who would bareboat register the Vessel under
      the flag of Antigua, following the expiry of which the Borrower would
      redeliver the Vessel to the
Borrower.

            

    

     

    IT IS AGREED  as
follows:

     

    
      	
              1  

            	
              Definitions
      and Interpretation

            

    

     

    1.1       In
this Agreement:

     

    “Administration” has the
meaning given to it in paragraph 1.1.3 of the ISM Code.

     

    “Annex VI” means Annex VI
(Regulations for the Prevention of Air Pollution from Ships) to the
International Convention for the Prevention of Pollution from Ships 1973 (as
modified in 1978 and 1997).

     

    “Assignments” means the deed or
deeds of assignment from the Borrower, the Bareboat Charterer and any Charterer
referred to in Clause 10.1.2 (Security
Documents).

     

    “Availability Termination Date”
means 31 October 2007 or such later date as the Lender may in its discretion
agree.

     

    “Bareboat Charter” means the
bareboat charter dated 8 June 2007 on the terms and subject to the conditions of
which the Borrower will bareboat charter the Vessel to the Bareboat Charterer
for a period scheduled to expire in January 2009 at a daily net rate of hire of
not less than twenty six thousand Dollars ($26,000), as amended and/or
supplemented from time to time.

     

    “Bareboat Charterer” means MIT
Maritime or its nominee, Harpa, or Harpa’s sub-charterer, Pamini, in its
capacity as bareboat charterer or any other bareboat charterer
proposed by the Borrower and accepted by the Lender in its absolute
discretion.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Break Costs” means all sums
payable by the Borrower from time to time under Clause 8.3 (Break Costs).

     

    “Business Day” means a day
(other than a Saturday or Sunday) on which banks are open for general business
in New York, London, Bremen, Hamburg and Piraeus.

     

    “Cardiff” means Cardiff Marine
Inc. of 80 Broad Street, Monrovia, Republic of Liberia.

     

    “Charter” means any
charterparty or any contract of employment other than the Bareboat Charter in
respect of the Vessel.

     

    “Charterer” means any charterer
other than the Bareboat Charterer who shall at any time during the Facility
Period enter into a Charter.

     

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

     

    “Credit Support Document” means
any document providing security for the obligations of the Borrower under the
Master Agreement and, where the context permits, any other document referred to
in any Credit Support Document which has the effect of creating an Encumbrance
in favour of the Lender.

     

    “Credit Support Provider” means
any person (other than the Borrower) providing security for the obligations of
the Borrower under the Master Agreement.

     

    “Currency of Account” means, in
relation to any payment to be made to the Lender under a Finance Document, the
currency in which that payment is required to be made by the terms of that
Finance Document.

     

    “Deed of Covenants” means the
deed of covenants referred to in Clause 10.1.1
(Security
Documents).

     

    “Default” means an Event of
Default or any event or circumstance specified in Clause 13.1 (Events of Default) which would (with the
expiry of a grace period, the giving of notice, the making of any determination
under the Finance Documents or any combination of any of the foregoing) be an
Event of Default.

     

    “DOC” means, in relation to the
ISM Company, a valid Document of Compliance issued for the ISM Company by the
Administration under paragraph 13.2 of the ISM Code.

     

    “Dollars” and “$” each means available and
freely transferable and convertible funds in lawful currency of the United
States of America.

     

    “Drawdown Date” means the date
on which the Loan is advanced under Clause 4 (Advance).

     

    “Drawdown Notice” means a
notice substantially in the form set out in Schedule 2 (Form of Drawdown
Notice).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Earnings” means all hires,
freights, pool income and other sums payable to or for the account of the
Borrower, the Bareboat Charterer and/or any Charterer in respect of the Vessel
including (without limitation) all remuneration for salvage and towage services,
demurrage and detention moneys, contributions in general average, compensation
in respect of any requisition for hire, and damages and other payments (whether
awarded by any court or arbitral tribunal or by agreement or otherwise) for
breach, termination or variation of any contract for the operation, employment
or use of the Vessel and the benefit of the Performance Guarantees.

     

    “Encumbrance” means a mortgage,
charge, assignment, pledge, lien, or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect.

     

    “Event of Default” means any of
the events or circumstances set out in Clause 13.1 (Events of
Default).

     

    “Facility Period” means the
period beginning on the date of this Agreement and ending on the date when the
whole of the Indebtedness has been paid in full and the Security Parties and the
Bareboat Charterer have ceased to be under any further actual or contingent
liability to the Lender under or in connection with the Finance
Documents.

     

    “Finance Documents” means this
Agreement, the Master Agreement, the
Security Documents and any other document designated as such by the Lender and
the Borrower and “Finance
Document” means any one of them.

     

    “Financial Indebtedness” means
any obligation for the payment or repayment of money, whether present or future,
actual or contingent, in respect of:

     

    (a)        moneys
borrowed;

     

    (b)        any
acceptance credit;

     

    (c)        any
bond, note, debenture, loan stock or similar instrument;

     

    (d)        any
finance or capital lease;

     

    (e)        receivables
sold or discounted (other than on a non-recourse basis);

     

    (f)         deferred
payments for assets or services;

     

    
      	
               
      

            	
              (g)

            	
              any
      derivative transaction protecting against or benefiting from fluctuations
      in any rate or price (and, when calculating the value of any derivative
      transaction, only the marked to market value shall be taken into
      account);

            

    

     

    
      	
               
      

            	
              (h)

            	
              any
      amount raised under any other transaction (including any forward sale or
      purchase agreement) having the commercial effect of a
      borrowing;

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      counter-indemnity obligation in respect of a guarantee, indemnity, bond,
      standby or documentary letter of credit or any other instrument issued by
      a bank or financial institution;
and

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (j)

            	
              the
      amount of any liability in respect of any guarantee or indemnity for any
      of the items referred to in paragraphs (a) to (i)
  above.

            

    

     

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

     

    “Guarantee” means the guarantee
and indemnity referred to in Clause 10.1.3 (Security
Documents).

     

    “Guarantor” means DryShips Inc.
of the Marshall Islands and/or (where the context permits) any other person who
shall at any time during the Facility Period give to the Lender a guarantee
and/or indemnity for the repayment of all or part of the
Indebtedness.

     

    “Harpa” means Harpa Shipping
& Chartering GmbH & CO. Kommanditgesellschaft of the Federal Republic of
Germany.

     

    “Hedging Transaction” means a
Transaction entered into between the Lender and the Borrower pursuant to the
Master Agreement for the express purpose of hedging all or part of the
Borrower’s interest rate risk under this Agreement.

     

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

     

    “Indebtedness” means the
aggregate from time to time of: the amount of the Loan outstanding; all accrued
and unpaid interest on the Loan; and all other sums of any nature (together with
all accrued and unpaid interest on any of those sums) payable to the Lender
under all or any of the Finance Documents.

     

    “Insurances” means all policies
and contracts of insurance (including all entries in protection and indemnity or
war risks associations) which are from time to time taken out or entered into in
respect of or in connection with the Vessel or her increased value or the
Earnings and (where the context permits) all benefits under such contracts and
policies, including all claims of any nature and returns of
premium.

     

    “Interest Period” means each
period for the determination and payment of interest selected by the Borrower or
agreed or selected by the Lender pursuant to Clause 7 (Interest).

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “ISM Code” means the
International Management Code for the Safe Operation of Ships and for Pollution
Prevention.

     

    “ISM Company” means, at any
given time, the company responsible for the Vessel’s compliance with the ISM
Code under paragraph 1.1.2 of the ISM Code.

     

    “ISPS Code” means the International
Ship and Port Facility Security Code.

     

    “ISPS Company” means, at any
given time, the company responsible for the Vessel’s compliance with the ISPS
Code.

     

    “ISSC” means a valid
international ship security certificate for the Vessel issued under the ISPS
Code.

     

    “LIBOR” means:

     

    (a)        the
applicable Screen Rate; or

     

    
      	
               
      

            	
              (b)

            	
              (if
      no Screen Rate is available for any Interest Period) the arithmetic mean
      of the rates (rounded upwards to four decimal places) quoted to the Lender
      in the London interbank market,

            

    

     

    at
11.00 a.m. two (2) Business Days before the first day of the relevant Interest
Period for the offering of deposits in Dollars in an amount comparable to the
Loan (or any relevant part of the Loan) and for a period comparable to the
relevant Interest Period.

     

    “Loan” means the aggregate
amount advanced or to be advanced by the Lender to the Borrower under Clause 4 (Advance) or, where the
context permits, the amount advanced and for the time being
outstanding.

     

    “Management Agreement” means
the agreement(s) for the commercial and/or technical management of the Vessel
(during the period in which the Bareboat Charter is in force) between the
Bareboat Charterer and the relevant Managers and the agreement(s) for the
commercial and/or technical management of the Vessel (during the remainder of
the Facility Period when the Bareboat Charter is not in force) dated 24
September 2007 between the Borrower and the relevant Managers.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Managers” means Harren &
Partner Ship Management GmbH & Co. KG, Haren (Ems), Federal Republic of
Germany during the period that the Bareboat Charter is in force and Cardiff
during the remainder of the Facility Period or such other commercial and/or
technical managers of the Vessel nominated by the Borrower as the Lender may
approve.

     

    “Margin” means zero point nine
per cent (0.9%) per annum.

     

    “Master Agreement” means any
master agreement in Deutscher Rahmenvertrag (Rahmenvertrag Für
Finanztermingeschäfte) form (or any other form of master agreement relating to
interest or currency exchange transactions agreed between the parties hereto)
entered into between the Lender and the Borrower during the Facility Period,
including each Schedule to any Master Agreement and each Confirmation exchanged
pursuant to any Master Agreement.

     

    “Maximum Loan Amount” means
thirty five million Dollars ($35,000,000).

     

    “MIT Maritime” means MIT Maritime Investment
& Trading GmbH & Co. KG, Haren/Ems, a company incorporated under the
laws of Germany with its place of business at Garten Str. 2 49733
Haren/EMS, Germany.

     

    “MOA” means the memorandum of
agreement dated 8 June 2007 on the terms and subject to the conditions of which
the Seller will sell the Vessel to the Borrower for the Purchase Price (as
amended and/or novated and/or supplemented from time to time).

     

    “Mortgage” means the statutory
mortgage referred to in Clause 10.1.1 (Security Documents) together
with the Deed of Covenants.

     

    “Mortgagee’s Insurances” means
all policies and contracts of mortgagee’s interest insurance, mortgagee’s
additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Lender in relation to the
Vessel.

     

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

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Original Financial Statements”
means the audited consolidated financial statements of the Borrower, Cardiff and
the Guarantor for the financial year ended 2006.

     

    “Pamini” means Pamini Shipping
Limited of Antigua and Barbuda.

     

    “Performance Guarantees” means
the guarantee to be granted in favour of the Borrower by MIT Marine in respect
of Harpa’s performance and obligations under the Bareboat Charter, including but
not limited to payment obligations and redelivery obligations of Harpa, and the
guarantee to be granted in favour of the Borrower by Harpa in respect of
Pamini’s performance and obligations under the Bareboat Charter and any
sub-charter agreements, including but not limiting to payment obligations and
redelivery obligations of Pamini.

     

    “Purchase Price” means the
amount of fifty million one hundred and sixty one thousand eight hundred and
fifty six Dollars ($50,161,856).

     

    “Relevant Documents” means the
Finance Documents, the MOA, the Bareboat Charter, any Charter, the Performance
Guarantees, the Management Agreement, the Managers’ confirmations specified in
Part I of Schedule 1 (Conditions precedent) and
Part II of Schedule 1 (Conditions
subsequent).

     

    “Repayment Date” means the date
for payment of any Repayment Instalment in accordance with Clause 5.1 (Repayment of
Loan).

     

    “Repayment Instalment” means
any instalment of the Loan to be repaid by the Borrower under Clause 5.1 (Repayment of
Loan).

     

    “Requisition Compensation”
means all compensation or other money which may from time to time be payable to
the Borrower, the Bareboat Charterer and/or any Charterer as a result of the
Vessel being requisitioned for title or in any other way compulsorily acquired
(other than by way of requisition for hire).

     

    
      	 	
              “Screen Rate” means in
      relation to LIBOR, the British Bankers’ Association Interest Settlement
      Rate for the relevant currency and period displayed on the appropriate page of the Reuters
      screen.  If the agreed page is replaced or the service ceases to
      be available, the Lender may specify another page or service displaying
      the appropriate rate after consultation with the
      Borrower. 

            

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              “Security Documents”
      means the Mortgage, the Deed of Covenants, the Assignments, the Guarantee,
      any other Credit Support Documents or (where the context permits) any
      one or more of them and any other agreement or document which may at any
      time be executed by any person as security for the payment of all or any
      part of the Indebtedness and “Security Document” means
      any one of them. 

            

    

     

    “Security Parties” means the
Borrower, the Guarantor, any other Credit Support Provider and any other person
who may at any time during the Facility Period be liable
for, or provide security for, all or any part of the Indebtedness, and “Security Party” means any one
of them.

     

    “Seller” means MIT Maritime in
its capacity as seller.

     

    “SMC” means a valid safety
management certificate issued for the Vessel by or on behalf of the
Administration under paragraph 13.7 of the ISM Code.

     

    “SMS” means a safety management
system for the Vessel developed and implemented in accordance with the ISM
Code.

     

    “Tax” means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
penalty or interest payable in connection with any failure to pay or any delay
in paying any of the same).

     

    “Total Loss”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      requisition for title or compulsory acquisition of the Vessel by any
      government or other competent authority (other than by way of requisition
      for hire); or

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      capture, seizure, arrest, detention or confiscation of the Vessel by any
      government or by persons acting or purporting to act on behalf of any
      government, unless the Vessel is released and returned to the possession
      of the Borrower, the Bareboat Charterer and/or any Charterer within one
      month after the capture, seizure, arrest, detention or confiscation in
      question.

            

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    “Vessel” means the dry cargo
bulk carrier vessel m.v. “CLIPPER GEMINI” of approximately 51,201 dwt, built in
2003, currently registered under the flag of Antigua in the ownership of the
Seller and intended to be sold by the Seller to the Borrower on the terms of the
MOA, and everything now or in the future belonging to her on board and
ashore.

     

    1.2       In
this Agreement:

     

    
      	
               
      

            	
              1.2.1

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

            

    

     

    
      	
               
      

            	
              1.2.2

            	
              words
      denoting persons include corporations, partnerships, associations of
      persons (whether incorporated or not) or governmental or
      quasi-governmental bodies or authorities and vice
  versa;

            

    

     

    
      	
               
      

            	
              1.2.3

            	
              references
      to Recitals, Clauses and Schedules are references to recitals, clauses and
      schedules to or of this Agreement;

            

    

     

    
      	
               
      

            	
              1.2.4

            	
              references
      to this Agreement include the Recitals and the
  Schedules;

            

    

     

    
      	
               
      

            	
              1.2.5

            	
              the
      headings and contents page(s) are for the purpose of reference only, have
      no legal or other significance, and shall be ignored in the interpretation
      of this Agreement;

            

    

     

    
      	
               
      

            	
              1.2.6

            	
              references
      to any document (including, without limitation, to all or any of the
      Relevant Documents) are, unless the context otherwise requires, references
      to that document as amended, supplemented, novated or replaced from time
      to time;

            

    

     

    
      	
               
      

            	
              1.2.7

            	
              references
      to statutes or provisions of statutes are references to those statutes, or
      those provisions, as from time to time amended, replaced or
      re-enacted;

            

    

     

    
      	
               
      

            	
              1.2.8

            	
              references
      to the Lender include its successors, transferees and
      assignees;

            

    

     

    
      	
               
      

            	
              1.2.9

            	
              a
      time of day (unless otherwise specified) is a reference to London time;
      and

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              1.2.10

            	
              words
      and expressions defined in the Master Agreement, unless the context
      otherwise requires, have the same
meaning.

            

    

     

    1.3       Offer letter

     

    This
Agreement supersedes the terms and conditions contained in any correspondence
relating to the subject matter of this Agreement exchanged between the Lender
and the Borrower or their representatives prior to the date of this
Agreement.

     

    
      	
              2  

            	
              The
      Loan and its Purpose

            

    

     

    
      	
               
      

            	
              2.1

            	
              Amount   Subject
      to the terms of this Agreement, the Lender agrees to make available to the
      Borrower a term loan not exceeding the Maximum Loan
  Amount.

            

    

     

    
      	
               
      

            	
              2.2

            	
              Purpose   The
      Borrower shall apply the Loan for the purposes referred to in Recital
      (B).

            

    

     

    
      	
               
      

            	
              2.3

            	
              Monitoring   The
      Lender shall not be bound to monitor or verify the application of any
      amount borrowed under this
Agreement.

            

    

     

    
      	
              3  

            	
              Conditions
      of Utilisation

            

    

     

    
      	
               
      

            	
              3.1

            	
              Conditions
      precedent   The Borrower is not entitled to have the
      Loan advanced unless the Lender has received all of the documents and
      other evidence listed in Part I of Schedule 1 (Conditions
      precedent).

            

    

     

    
      	
               
      

            	
              3.2

            	
              Further conditions
      precedent   The Lender will only be obliged to
      advance the Loan if on the date of the Drawdown Notice and on the proposed
      Drawdown Date:

            

    

     

    
      	
               
      

            	
              3.2.1

            	
              no
      Default is continuing or would result from the advance of the Loan;
      and

            

    

     

    
      	
               
      

            	
              3.2.2

            	
              the
      representations made by the Borrower under Clause 11 (Representations) are
      true in all material respects.

            

    

     

    
      	
               
      

            	
              3.3

            	
              Conditions
      subsequent   The Borrower undertakes to deliver or
      to cause to be delivered to the Lender on, or as soon as practicable
      after, the Drawdown Date the additional documents and other evidence
      listed in Part II of Schedule 1 (Conditions
      subsequent).

            

    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              3.4

            	
              No
      Waiver   If the Lender in its sole discretion agrees
      to advance all or any part of the Loan to the Borrower before all of the
      documents and evidence required by Clause 3.1
      (Conditions
      precedent) have been
      delivered to or to the order of the Lender, the Borrower undertakes to
      deliver all outstanding documents and evidence to or to the order of the
      Lender no later than the date specified by the
  Lender.

            

    

     

    The
advance of all or any part of the Loan under this Clause 3.4 shall not be taken as a waiver of the Lender’s
right to require production of all the documents and evidence required by Clause
3.1 (Conditions
precedent).

     

    
      	
               
      

            	
              3.5

            	
              Form and
      content   All documents and evidence delivered to
      the Lender under this Clause 3
      shall:

            

    

     

    3.5.1    be
in form and substance acceptable to the Lender; and

     

    
      	
               
      

            	
              3.5.2

            	
              if
      required by the Lender, be certified, notarised, legalised or attested in
      a manner acceptable to the Lender.

            

    

     

    
      	
              4  

            	
              Advance

            

    

     

    
      	
               
      

            	
              The
      Borrower may request the Loan to be advanced in one amount on any Business
      Day prior to the Availability Termination Date by delivering to the Lender
      a duly completed Drawdown Notice not more than ten (10) and not fewer than
      three (3) Business Day (or fewer than three (3) Business Days subject to
      the Lender’s prior written consent) before the proposed Drawdown
      Date.

            

    

     

    
      	
              5  

            	
              Repayment

            

    

     

    
      	
               
      

            	
              5.1

            	
              Repayment of
      Loan   The Borrower agrees to repay the Loan to the
      Lender by thirty six (36) consecutive quarterly Repayment
      Instalments.  The first six (6) Repayment Instalments each in
      the amount of one million five hundred thousand Dollars ($1,500,000), the
      next twenty nine (29) Repayment Instalments each in the amount of five
      hundred thousand Dollars ($500,000) and the thirty sixth and final
      Repayment Instalment in the amount of eleven million five hundred thousand
      Dollars ($11,500,000) (comprising an instalment of five hundred thousand
      Dollars ($500,000) and a balloon payment of eleven million Dollars
      ($11,000,000)), the first Repayment Instalment falling due on the date
      which is three (3) calendar months after the Drawdown Date and subsequent
      Repayment Instalments falling due at consecutive intervals of three (3)
      calendar months thereafter.

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              5.2

            	
              Reduction of Repayment
      Instalments   If the aggregate amount advanced to
      the Borrower is less than the Maximum Loan Amount, the amount of each
      Repayment Instalment shall be reduced pro rata to the amount actually
      advanced.

            

    

     

    
      	
               
      

            	
              5.3

            	
              Reborrowing   The
      Borrower may not reborrow any part of the Loan which is repaid or
      prepaid.

            

    

     

    
      	
              6

            	
              Prepayment

            

    

     

    
      	
               
      

            	
              6.1

            	
              Illegality   If
      it becomes unlawful in any jurisdiction for the Lender to perform any of
      its obligations as contemplated by this Agreement or to fund or maintain
      the Loan:

            

    

     

    
      	
               
      

            	
              6.1.1

            	
              the
      Lender shall promptly notify the Borrower of that event;
    and

            

    

     

    
      	
               
      

            	
              6.1.2

            	
              the
      Borrower shall repay the Loan (to the extent already advanced) on the last
      day of the current Interest Period or, if earlier, the date specified by
      the Lender in the notice delivered to the Borrower (being no earlier than
      the last day of any applicable grace period permitted by
    law).

            

    

     

    
      	
               
      

            	
              6.2

            	
              Voluntary prepayment of
      Loan   The Borrower may prepay the whole or any part
      of the Loan (but, if in part, being an amount that reduces the Loan by a
      minimum amount of five hundred thousand Dollars ($500,000)) subject as
      follows:

            

    

     

    
      	
               
      

            	
              6.2.1

            	
              it
      gives the Lender not less than five (5) Business Days’ (or such shorter
      period as the Lender may agree) prior
notice;

            

    

     

    
      	
               
      

            	
              6.2.2

            	
              no
      prepayment may be made until after the Availability Termination Date;
      and

            

    

     

    
      	
               
      

            	
              6.2.3

            	
              any
      prepayment under this Clause 6.2 shall
      satisfy the obligations under Clause 5.1
      (Repayment of
      Loan) in inverse order of
maturity.

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              6.3

            	
              Mandatory prepayment on sale or
      Total Loss   If the Vessel is sold by the Borrower
      or becomes a Total Loss, the Borrower shall, simultaneously with any such
      sale or within one hundred and twenty (120) days after any such Total
      Loss, prepay the whole of the Loan.

            

    

     

    
      	
               
      

            	
              6.4

            	
              Restrictions   Any
      notice of prepayment given under this Clause 6 shall be irrevocable and, unless a contrary
      indication appears in this Agreement, shall specify the date or dates upon
      which the relevant prepayment is to be made and the amount of that
      prepayment.

            

    

     

    Any
prepayment under this Agreement shall be made together with accrued interest on
the amount prepaid and, subject to any Break Costs and subject to Clause 6.2
(Voluntary prepayment of
Loan) and Clause 6.3 (Mandatory prepayment on sale or
Total Loss), without premium or penalty.

     

    
      	
              7  

            	
              Interest

            

    

     

    
      	
               
      

            	
              7.1

            	
              Interest
      Periods   The period during which the Loan shall be
      outstanding under this Agreement shall be divided into consecutive
      Interest Periods of one (1), three (3), six (6) or twelve (12)
      months’ duration, as selected by the Borrower by written notice to the
      Lender not later than 11.00 a.m. on the third Business Day before the
      beginning of the Interest Period in question, or such other duration as
      may be agreed by the Lender.

            

    

     

    
      	
               
      

            	
              7.2

            	
              Beginning and end of Interest
      Periods   Each Interest Period shall start on the
      Drawdown Date or (if the Loan is already made) on the last day of the
      preceding Interest Period and end on the date which numerically
      corresponds to the Drawdown Date or the last day of the preceding Interest
      Period in the relevant calendar month except that, if there is no
      numerically corresponding date in that calendar month, the Interest Period
      shall end on the last Business Day in that
  month.

            

    

     

    
      	
               
      

            	
              7.3

            	
              Interest Periods to meet
      Repayment Dates   If an Interest Period would
      otherwise expire after the next Repayment Date, there shall be a separate
      Interest Period for a part of the Loan equal to the relevant Repayment
      Instalment which shall expire on the next Repayment Date and the Interest
      Period determined shall apply only to the balance of the
    Loan.

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              7.4

            	
              Non-Business
      Days   If an Interest Period would otherwise end on
      a day which is not a Business Day, that Interest Period will instead end
      on the next Business Day in that calendar month (if there is one) or the
      preceding Business Day (if there is
not).

            

    

     

    
      	
               
      

            	
              7.5

            	
              Interest
      rate   During each Interest Period interest shall
      accrue on the Loan at the rate determined by the Lender to be the
      aggregate of (a) the Margin and
  (b) LIBOR.

            

    

     

    
      	
               
      

            	
              7.6

            	
              Failure to select Interest
      Period   If the Borrower at any time fails to select
      or agree an Interest Period in accordance with Clause 7.1 (Interest Periods), the
      interest rate applicable shall be the rate determined by the Lender in
      accordance with Clause 7.5 (Interest rate) for an Interest
      Period of such duration (not exceeding three (3) months) as the
      Lender may select.

            

    

     

    
      	
               
      

            	
              7.7

            	
              Accrual and payment of
      interest   Interest shall accrue from day to day,
      shall be calculated on the basis of a 360 day year and the actual number
      of days elapsed (or, in any circumstance where market practice differs, in
      accordance with the prevailing market practice) and shall be paid by the
      Borrower to the Lender on the last day of each Interest Period and, if the
      Interest Period is longer than three (3) months, on the dates falling
      at three (3) monthly intervals after the first day of that Interest
      Period.

            

    

     

    
      	
               
      

            	
              7.8

            	
              Default
      interest   If the Borrower fails to pay any amount
      payable by it under a Finance Document on its due date, interest shall
      accrue on the overdue amount from the due date up to the date of actual
      payment (both before and after judgment) at a rate which is two per cent
      (2%) higher than the rate which would have been payable if the overdue
      amount had, during the period of non-payment, constituted the Loan in the
      currency of the overdue amount for successive Interest Periods, each
      selected by the Lender (acting reasonably).  Any interest
      accruing under this Clause 7.8 shall be
      immediately payable by the Borrower on demand by the Lender.  If
      unpaid, any such interest will be compounded with the overdue amount at
      the end of each Interest Period applicable to that overdue amount but will
      remain immediately due and payable.

            

    

     

    
      	
               
      

            	
              7.9

            	
              Changes in market
      circumstances   If at any time the Lender determines
      (which determination shall be final and conclusive and binding on the
      Borrower) that, by reason of changes affecting the London interbank
      market, adequate and fair means do not exist for determining the rate of
      interest on the Loan for any Interest
Period:

            

    

     

    
      	
               
      

            	
              7.9.1

            	
              the
      Lender shall give notice to the Borrower of the occurrence of such event;
      and

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              7.9.2

            	
              the
      rate of interest on the Loan for that Interest Period shall be the rate
      per annum which is the sum of:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Margin; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      rate which expresses as a percentage rate per annum the cost to the Lender
      of funding the Loan from whatever source it may reasonably
      select

            

    

     

    PROVIDED
THAT if the resulting rate of interest is not acceptable to the
Borrower:

     

    
      	
               
      

            	
              7.9.3

            	
              the
      Lender will negotiate with the Borrower in good faith with a view to
      modifying this Agreement to provide a substitute basis for determining the
      rate of interest which is financially a substantial equivalent to the
      basis provided for in this
Agreement;

            

    

     

    
      	
               
      

            	
              7.9.4

            	
              any
      substitute basis agreed pursuant to Clause 7.9.3 shall be binding on the parties to this
      Agreement; and

            

    

     

    
      	
               
      

            	
              7.9.5

            	
              if,
      within thirty (30) days of the giving of the notice referred to in
      Clause 7.9.1, the Borrower and the
      Lender fail to agree in writing on a substitute basis for determining the
      rate of interest, the Borrower will immediately prepay the Loan, together
      with any Break Costs.

            

    

     

    
      	
               
      

            	
              7.10

            	
              Determinations
      conclusive   The Lender shall promptly notify the
      Borrower of the determination of a rate of interest under this Clause 7 and each such determination shall (save in the
      case of manifest error) be final and
conclusive.

            

    

     

    
      	
              8  

            	
              Indemnities

            

    

     

    
      	
               
      

            	
              8.1

            	
              Transaction
      expenses   The Borrower will, within fourteen (14)
      days of the Lender’s written demand, pay the Lender the amount of all
      costs and expenses (including legal fees and Value Added Tax or any
      similar or replacement tax if applicable) incurred by the Lender in
      connection with:

            

    

     

    
      	
               
      

            	
              8.1.1

            	
              the
      negotiation, preparation, printing, execution and registration of the
      Finance Documents (whether or not any Finance Document is actually
      executed or registered and whether or not all or any part of the Loan is
      advanced);

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              8.1.2

            	
              any
      amendment, addendum or supplement to any Finance Document (whether or not
      completed); and

            

    

     

    
      	
               
      

            	
              8.1.3

            	
              any
      other document which may at any time be required by the Lender to give
      effect to any Finance Document or which the Lender is entitled to call for
      or obtain under any Finance
Document.

            

    

     

    
      	
               
      

            	
              8.2

            	
              Funding
      costs   The Borrower shall indemnify the Lender on
      the Lender’s written demand against all losses and costs incurred or
      sustained by the Lender if, for any reason, the Loan is not advanced to
      the Borrower after the relevant Drawdown Notice has been given to the
      Lender, or is advanced on a date other than that requested in the Drawdown
      Notice (unless, in either case, as a result of any default by the
      Lender).

            

    

     

    
      	
               
      

            	
              8.3

            	
              Break
      Costs   The Borrower shall indemnify the Lender on
      the Lender’s written demand against all costs, losses, premiums or
      penalties incurred by the Lender as a result of its receiving any
      prepayment of all or any part of the Loan (whether pursuant to Clause 6 (Prepayment) or otherwise) on
      a day other than the last day of an Interest Period for the Loan or
      relevant part of the Loan, or any other payment under or in relation to
      the Finance Documents on a day other than the due date for payment of the
      sum in question, including (without limitation) any losses or costs
      incurred in liquidating or re-employing deposits from third parties
      acquired to effect or maintain all or any part of the Loan, and any
      liabilities, expenses or losses incurred by the Lender in terminating or
      reversing, or otherwise in connection with, any Transaction or any other
      interest rate and/or currency swap, transaction or arrangement entered
      into by the Lender to hedge any exposure arising under this Agreement, or
      in terminating or reversing, or otherwise in connection with, any open
      position arising under this Agreement or the Master
    Agreement.

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              8.4

            	
              Currency
      indemnity   In the event of the Lender receiving or
      recovering any amount payable under a Finance Document in a currency other
      than the Currency of Account, and if the amount received or recovered is
      insufficient when converted into the Currency of Account at the date of
      receipt to satisfy in full the amount due, the Borrower shall, on the
      Lender’s written demand, pay to the Lender such further amount in the
      Currency of Account as is sufficient to satisfy in full the amount due and
      that further amount shall be due to the Lender as a separate debt under
      this Agreement.

            

    

     

    
      	
               
      

            	
              8.5

            	
              Increased costs (subject to
      Clause 8.6 (Exceptions
      to increased costs))   If,
      by reason of the introduction of any law, or any change in any law, or any
      change in the interpretation or administration of any law, or compliance
      with any request or requirement from any central bank or any fiscal,
      monetary or other authority occurring after the date of this
      Agreement:

            

    

     

    
      	
               
      

            	
              8.5.1

            	
              the
      Lender (or the holding company of the Lender) shall be subject to any Tax
      with respect to payment of all or any part of the Indebtedness (other than
      Tax on overall net income); or

            

    

     

    
      	
               
      

            	
              8.5.2

            	
              the
      basis of Taxation of payments to the Lender in respect of all or any part
      of the Indebtedness shall be changed;
or

            

    

     

    
      	
               
      

            	
              8.5.3

            	
              any
      reserve requirements shall be imposed, modified or deemed applicable
      against assets held by or deposits in or for the account of or loans by
      any branch of the Lender; or

            

    

     

    
      	
               
      

            	
              8.5.4

            	
              the
      manner in which the Lender allocates capital resources to its obligations
      under this Agreement and/or the Master Agreement or any ratio (whether
      cash, capital adequacy, liquidity or otherwise) which the Lender is
      required or requested to maintain shall be affected;
  or

            

    

     

    
      	
               
      

            	
              8.5.5

            	
              there
      is imposed on the Lender (or on the holding company of the Lender) any
      other condition in relation to the Indebtedness or the Finance
      Documents;

            

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	 	 	and
      the result of any of the above shall be to increase the cost to the Lender
      (or to the holding company of the Lender) of the Lender making or
      maintaining the Loan, or its obligations under the Master Agreement, or to
      cause the Lender to  suffer (in its opinion) a material
      reduction in the rate of return on its overall capital below the level
      which it reasonably anticipated at the date of this Agreement and which it
      would have been able to achieve but for its entering into this Agreement
      or the Master Agreement, and/or performing its obligations under this
      Agreement or the Master Agreement, then, subject to Clause 8.6 (Exceptions to increased
      costs), the Lender shall notify the Borrower and the Borrower shall
      from time to time pay to the Lender on demand the amount which shall
      compensate the Lender (or the holding company of the Lender) for such
      additional cost or reduced return.  A certificate signed by an
      authorised signatory of the Lender setting out the amount of that payment
      and the basis of its calculation shall be submitted to the Borrower and
      shall be conclusive evidence of such amount save for manifest error or on
      any question of law.

    

     

    
      	
               
      

            	
              8.6

            	
              Exceptions to increased
      costs   Clause 8.5
      (Increased
      costs) does not apply to
      the extent any additional cost or reduced return referred to in that
      Clause is:

            

    

     

    
      	
               
      

            	
              8.6.1

            	
              compensated
      for by a payment made under Clause 8.10
      (Taxes);
      or

            

    

     

    
      	
               
      

            	
              8.6.2

            	
              compensated
      for by a payment made under Clause 17.3
      (Grossing-up);
      or

            

    

     

    
      	
               
      

            	
              8.6.3

            	
              attributable
      to the wilful breach by the Lender (or the holding company of the Lender)
      of any law or regulation.

            

    

     

    
      	
               
      

            	
              8.7

            	
              Events of
      Default   The Borrower shall indemnify the Lender
      from time to time on the Lender’s written demand against all losses, costs
      and liabilities incurred or sustained by the Lender as a consequence of
      any Event of Default.

            

    

     

    
      	
               
      

            	
              8.8

            	
              Enforcement
      costs   The Borrower shall pay to the Lender on the
      Lender’s written demand the amount of all costs and expenses (including
      legal fees) incurred by the Lender in connection with the enforcement of,
      or the preservation of any rights under, any Finance Document including
      (without limitation) any losses, costs and expenses which the Lender may
      from time to time sustain, incur or become liable for by reason of the
      Lender being mortgagee of the Vessel and/or a lender to the Borrower, or
      by reason of the Lender being deemed by any court or authority to be an
      operator or controller, or in any way concerned in the operation or
      control, of the Vessel.

            

    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              8.9

            	
              Other
      costs   The Borrower shall pay to the Lender on the
      Lender’s written demand the amount of all sums which the Lender may pay or
      become actually or contingently liable for on account of the Borrower in
      connection with the Vessel (whether alone or jointly or jointly and
      severally with any other person) including (without limitation) all sums
      which the Lender may pay or guarantees which it may give in respect of the
      Insurances, any expenses incurred by the Lender in connection with the
      maintenance or repair of the Vessel or in discharging any lien, bond or
      other claim relating in any way to the Vessel, and any sums which the
      Lender may pay or guarantees which it may give to procure the release of
      the Vessel from arrest or
detention.

            

    

     

    
      	
               
      

            	
              8.10

            	
              Taxes   The
      Borrower shall pay all Taxes to which all or any part of the Indebtedness
      or any Finance Document may be at any time subject (other than Tax on the
      Lender’s overall net income) and shall indemnify the Lender on the
      Lender’s written demand against all liabilities, costs, claims and
      expenses resulting from any omission to pay or delay in paying any such
      Taxes.

            

    

     

    
      	
              9 
      

            	
              Fees  The
      Borrower shall pay to the Lender an arrangement fee in the amount of zero
      point twenty five per cent (0.25%) of the Maximum Loan Amount on the
      Drawdown Date.

            

    

     

    
      	
              10  

            	
              Security
      and Application of Moneys

            

    

     

    
      	
               
      

            	
              10.1

            	
              Security
      Documents   As security for the payment of the
      Indebtedness, the Borrower shall execute and deliver to the Lender or
      cause to be executed and delivered to the Lender the following documents
      in such forms and containing such terms and conditions as the Lender shall
      require:

            

    

     

    
      	
               
      

            	
              10.1.1

            	
              a
      first statutory mortgage over the Vessel together with a collateral deed
      of covenants;

            

    

     

    
      	
               
      

            	
              10.1.2

            	
              first
      priority deeds of assignment of the Insurances, Earnings, Bareboat Charter
      (or Charter) and Requisition Compensation of the Vessel from the Borrower,
      the Bareboat Charterer (or Charterer) including (in the case of the
      Bareboat Charterer) an agreement whereby the interests of the Bareboat
      Charterer under the Bareboat Charter are subordinated to the interests of
      the Lender under the Mortgage; and

            

    

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.1.3

            	
              a
      guarantee and indemnity from the
Guarantor.

            

    

     

    
      	
               
      

            	
              10.2

            	
              General application of
      moneys   The Borrower, subject to Clause 10.3 (Application of moneys on sale
      or Total Loss), irrevocably authorises the Lender to apply all sums
      which the Lender may receive:

            

    

     

    
      	
               
      

            	
              10.2.1

            	
              pursuant
      to a sale or other disposition of the Vessel or any right, title or
      interest in the Vessel; or

            

    

     

    
      	
               
      

            	
              10.2.2

            	
              by
      way of payment of any sum in respect of the Insurances, Earnings or
      Requisition Compensation; or

            

    

     

    
      	
               
      

            	
              10.2.3

            	
              otherwise
      arising under or in connection with any Security
  Document,

            

    

     

    in
or towards satisfaction, or by way of retention on account, of the Indebtedness,
in such manner as the Lender may in its discretion determine PROVIDED THAT any
part of the Indebtedness arising out of the Master Agreement shall be satisfied,
or retained for, on a pari passu basis with the remainder of the
Indebtedness.

     

    
      	 	
              10.3 

            	
              Application of moneys on sale
      or Total Loss   The Borrower
      irrevocably authorises the Lender to apply all sums which the Lender may
      receive pursuant to a sale by the Borrower of the Vessel or a Total Loss
      in or towards satisfaction of the prepayment due and payable by virtue of
      that sale or Total Loss under Clause 6.3
      (Mandatory prepayment on
      sale or Total Loss), but the Borrower’s obligation to make that
      prepayment shall not be affected if those sums are insufficient to satisfy
      that obligation. 

            

    

     

    
      	
               
      

            	
              10.4

            	
              Additional
      security   If at any time the aggregate of the
      market value of the Vessel (such market value to be conclusively
      determined by a reputable, independent and first class firm of shipbrokers
      appointed by the Lender on the basis of a charter-free sale for prompt
      delivery for cash at arm’s length on normal commercial terms as between a
      willing seller and a willing buyer) and the value of any additional
      security (such value to be the face amount of the deposit (in the case
      of cash), determined conclusively by appropriate advisers appointed by the
      Lender (in the case of other charged assets), and determined by the Lender
      in its discretion (in all other cases) for the time being provided to the
      Lender under this Clause 10.4 is less than one hundred and twenty
      five per cent (125%) of the Loan the Borrower shall, within thirty (30)
      days of the Lender’s request, at the Borrower’s
    option:

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
              10.4.1

            	
              pay
      to the Lender or to its nominee a cash deposit in the amount of the
      shortfall to be secured in favour of the Lender as additional security for
      the payment of the Indebtedness; or

            

    

     

    
      	
               
      

            	
              10.4.2

            	
              give
      to the Lender other additional security in amount and form acceptable to
      the Lender in its discretion; or

            

    

     

    
      	
               
      

            	
              10.4.3

            	
              prepay
      the amount of the Indebtedness which will ensure that the aggregate of the
      market value of the Vessel (determined as stated above) and the value of
      any such additional security is not less than one hundred and twenty five
      per cent (125%) of the Loan.

            

    

     

    
      	 	Clauses 5.3 (Reborrowing),
      6.2 (Voluntary
      prepayment of Loan) and 6.4 (Restrictions)
      shall apply, mutatis
      mutandis, to any prepayment made under this Clause 10.4 and the
      value of any additional security provided shall be determined as
      stated above. 

    

     

    
      	
              11  

            	
              Representations

            

    

     

    
      	
               
      

            	
              11.1

            	
              Representations   The
      Borrower makes the representations and warranties set out in this Clause
      11.1 to the Lender on the date of this
      Agreement.

            

    

     

    
      	
               
      

            	
              11.1.1

            	
              Status   Each
      Security Party (which is not an individual) is a corporation, duly
      incorporated and validly existing under the law of its jurisdiction of
      incorporation and has the power to own its assets and carry on its
      business as it is being conducted.

            

    

     

    
      	
               
      

            	
              11.1.2

            	
              Binding
      obligations   The obligations expressed to be
      assumed by each Security Party in each Finance Document to which it is a
      party are legal, valid, binding and enforceable
    obligations.

            

    

     

    
      	
               
      

            	
              11.1.3

            	
              Non-conflict with other
      obligations   The entry into and performance by each
      Security Party of, and the transactions contemplated by, the Finance
      Documents do not conflict with:

            

    

     

    
      	
               
      

            	
              (a)

            	
              any
      law or regulation applicable to that Security
  Party;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      constitutional documents of that Security Party;
  or

            

    

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              any
      document binding on that Security Party or any of its
    assets,

            

    

     

    
      	
               
      

            	
              and
      in borrowing the Loan, the Borrower is acting for its own
      account.

            

    

     

    
      	
               
      

            	
              11.1.4

            	
              Power and
      authority   Each Security Party has the power to
      enter into, perform and deliver, and has taken all necessary action to
      authorise its entry into, performance and delivery of, the Finance
      Documents to which
      it is a party and the transactions contemplated by those Finance
      Documents.

            

    

     

    
      	
               
      

            	
              11.1.5

            	
              Validity and admissibility in
      evidence   All consents, licences, approvals,
      authorisations, filings and registrations required or
      desirable:

            

    

     

    
      	
               
      

            	
              (a)

            	
              to
      enable each Security Party lawfully to enter into, exercise its rights and
      comply with its obligations in the Finance Documents to which it is a
      party or to enable the Lender to enforce and exercise all its rights under
      the Finance Documents; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      make the Finance Documents to which any Security Party is a party
      admissible in evidence in its jurisdiction of
    incorporation,

            

    

     

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

     

    
      	
               
      

            	
              11.1.6

            	
              Governing law and
      enforcement   The choice of English law as the
      governing law of any Finance Document expressed to be governed by English
      law will be recognised and enforced in the jurisdiction of incorporation
      of each relevant Security Party, and any judgment obtained in England in
      relation to any such Finance Document will be recognised and enforced in
      the jurisdiction of incorporation of each relevant Security
      Party.

            

    

     

    
      	
               
      

            	
              11.1.7

            	
              Deduction of
      Tax   No Security Party is required under the law of
      its jurisdiction of incorporation to make any deduction for or on account
      of Tax from any payment it may make under any Finance
      Document.

            

    

     

    
      	
               
      

            	
              11.1.8

            	
              No filing or stamp
      taxes   Under the law of jurisdiction of
      incorporation of each relevant Security Party it is not necessary that the
      Finance Documents (other than the Security Documents) be filed, recorded
      or enrolled with any court or other authority in that jurisdiction or that
      any stamp, registration or similar tax be paid on or in relation to the
      Finance Documents or the transactions contemplated by the Finance
      Documents.

            

    

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              11.1.9

            	
              No
      default   No Event of Default is continuing or might
      reasonably be expected to result from the advance of the
    Loan.

            

    

     

    
      	
               
      

            	
              11.1.10

            	
              No misleading
      information   Any factual information provided by
      any Security Party to the Lender was true and accurate in all material
      respects as at the date it was
provided.

            

    

     

    
      	
               
      

            	
              11.1.11

            	
              Pari passu
      ranking   The payment obligations of each Security
      Party and the Bareboat Charterer under the Finance Documents to which it
      is a party rank at least pari passu with the claims of all its other
      unsecured and unsubordinated creditors, except for obligations mandatorily
      preferred by law applying to companies
  generally.

            

    

     

    
      	
               
      

            	
              11.1.12

            	
              No proceedings pending or
      threatened   No litigation, arbitration or
      administrative proceedings of or before any court, arbitral body or agency
      have been started or (to the best of the Borrower’s knowledge threatened)
      which, if adversely determined, might reasonably be expected to have a
      materially adverse effect on the business, assets, financial condition or
      credit worthiness of any Security
Party.

            

    

     

    
      	
               
      

            	
              11.1.13

            	
              Disclosure of material
      facts   The Borrower is not aware of any material
      facts or circumstances which have not been disclosed to the Lender and
      which might, if disclosed, have adversely affected the decision of a
      person considering whether or not to make loan facilities of the nature
      contemplated by this Agreement available to the
  Borrower.

            

    

     

    
      	
               
      

            	
              11.1.14

            	
              No established place of
      business in the UK or US   No Security Party (other
      than the Guarantor) has an established place of business in the United
      Kingdom or the United States of
America.

            

    

     

    
      	
               
      

            	
              11.1.15

            	
              Completeness of Relevant
      Documents   The copies of any Relevant Documents
      provided or to be provided by the Borrower to the Lender in accordance
      with Clause 3 (Conditions of
      Utilisation) are, or will be,
      true and accurate copies of the originals and represent, or will
      represent, the full agreement between the parties to those Relevant
      Documents in relation to the subject matter of those Relevant Documents
      and there are no commissions, rebates, premiums or other payments due or
      to become due in connection with the subject matter of those Relevant
      Documents other than in the ordinary course of business or as disclosed
      to, and approved in writing by, the
Lender.

            

    

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              11.1.16

            	
              Indirect subsidiary of the
      Guarantor  The Borrower is and shall remain an indirect
      subsidiary of the Guarantor.

            

    

     

    
      	
               
      

            	
              11.2

            	
              Repetition   Each
      representation and warranty in Clause 11.1
      (Representations)
      is deemed to be repeated by the Borrower by reference to the facts and
      circumstances then existing on the date of the Drawdown Notice and the
      first day of each Interest Period.

            

    

     

    
      	
              12  

            	
              Undertakings
      and Covenants

            

    

     

    The
undertakings and covenants in this Clause 12 remain
in force for the duration of the Facility Period.

     

    12.1    Information
Undertakings

     

    
      	
               
      

            	
              12.1.1

            	
              Financial
      statements   The Borrower shall supply to the
      Lender, and shall procure that Cardiff and the Guarantor supply to the
      Lender, as soon as the same become available, but in any event within one
      hundred and eighty (180) days after the end of each of their respective
      financial years, the audited consolidated financial statements for that
      financial year, containing (amongst other things) the Borrower’s or, as
      the case may be, Cardiff’s and the Guarantor’s profit and loss account
      for, and balance sheet at the end of, each such financial
      year.

            

    

     

    
      	
               
      

            	
              12.1.2

            	
              Requirements as to financial
      statements   Each set of financial statements
      delivered by the Borrower under Clause 12.1.1
      (Financial
      statements):

            

    

     

    
      	
               
      

            	
              (a)

            	
              shall
      be certified by a director or an authorised signatory of the Borrower,
      Cardiff and the Guarantor, respectively, as fairly representing their
      financial condition as at the date as at which those financial statements
      were drawn up; and

            

    

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              shall
      be prepared using GAAP, accounting practices and financial reference
      periods consistent with those applied in the preparation of the Original
      Financial Statements unless, in relation to any set of financial
      statements, the Borrower, Cardiff or the Guarantor notifies the Lender
      that there has been a change in GAAP, the accounting practices or
      reference periods and the Borrower’s, Cardiff’s or the Guarantor’s
      auditors, respectively, deliver to the
Lender:

            

    

     

    
      	
               
      

            	
              (i)

            	
              a
      description of any change necessary for those financial statements to
      reflect the GAAP, accounting practices and reference periods upon which
      the Original Financial Statements were prepared;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              sufficient
      information, in form and substance as may be reasonably required by the
      Lender, to enable the Lender to make an accurate comparison between the
      financial position indicated in those financial statements and that
      indicated in the Original Financial
Statements.

            

    

     

    
      	
               
      

            	
              12.1.3

            	
              Interim financial
      statements   The Borrower shall supply to the
      Lender, and shall procure that Cardiff supply to the Lender, as soon as
      the same become available, but in any event within ninety (90) days after
      the end of each six (6) month period during each of their respective
      financial years, the unaudited semi-annual financial statements and
      management accounts for that six-month
period.

            

    

     

    
      	
               
      

            	
              12.1.4

            	
              Information:
      miscellaneous   The Borrower shall supply to the
      Lender:

            

    

     

    
      	
               
      

            	
              (a)

            	
              all
      documents dispatched by the Borrower to its shareholders (or any class of
      them) or its creditors generally at the same time as they are
      dispatched;

            

    

     

    
      	
               
      

            	
              (b)

            	
              promptly
      upon becoming aware of them, details of any litigation, arbitration or
      administrative proceedings which are current, threatened or pending
      against any Security Party, and which might, if adversely determined, have
      a materially adverse effect on the business, assets, financial condition
      or credit worthiness of that Security Party and/or the Bareboat Charterer;
      and

            

    

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              promptly,
      such further information regarding the financial condition, business and
      operations of any Security Party as the Lender may reasonably request
      including, without limitation, cash flow analyses and details of the
      operating costs of the Vessel.

            

    

     

    
      	
               
      

            	
              12.1.5

            	
              Notification of
      default

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Borrower shall notify the Lender of any Default (and the steps, if any,
      being taken to remedy it) promptly upon becoming aware of its
      occurrence.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Promptly
      upon a request by the Lender, the Borrower shall supply to the Lender a
      certificate signed by two of its directors or senior officers or an
      authorised signatory on its behalf certifying that no Default is
      continuing (or if a Default is continuing, specifying the Default and the
      steps, if any, being taken to remedy
it).

            

    

    
       

      
        	
                 
      

              	
                12.1.6

              	
                “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 after the date of this Agreement;
      or

            

    

     

    
      	
               
      

            	
              (c)

            	
              a
      proposed assignment or transfer by the Lender of any of its rights and
      obligations under this Agreement,

            

    

     

    
      	 	 	obliges
      the Lender (or, in the case of (c) above, 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 Lender supply, or
      procure the supply of, such documentation and other evidence as is
      reasonably requested by the Lender (for itself or, in the case of (c)
      above, on behalf of any prospective new Lender) in order for the Lender
      (or, in the case of (c) above, 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. 

    

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.2

            	
              General
      undertakings

            

    

     

    
    

     

    
      	 	 12.2.1	
              Authorisations   The
      Borrower shall promptly: 

            

    

     

    
      	
               
      

            	
              12.2.1.1

            	
              obtain,
      comply with and do all that is necessary to maintain in full force and
      effect; and

            

    

     

    
      	
               
      

            	
              12.2.1.2

            	
              supply
      certified copies to the Lender of,

            

    

     

    any
consent, licence, approval or authorisation required under any law or regulation
to enable each Security Party to perform its obligations under the Finance
Documents to which it is a party and to ensure the legality, validity,
enforceability or admissibility in evidence in the jurisdiction of incorporation
of each relevant Security Party of any Finance Document.

     

    
      	
               
      

            	
              12.2.2

            	
              Compliance with
      laws   The Borrower shall comply in all respects
      with all laws to which it may be subject, if failure so to comply would
      materially impair its ability to perform its obligations under the Finance
      Documents.

            

    

     

    
      	
               
      

            	
              12.2.3

            	
              Conduct of
      business   The Borrower shall carry on and conduct
      its business in a proper and
      efficient manner, file all requisite tax returns and pay all tax which
      becomes due and payable (except where contested in good
      faith).

            

    

     

    
      	
               
      

            	
              12.2.4

            	
              Evidence of good
      standing   The Borrower will from time to time if
      requested by the Lender provide the Lender with evidence in form and
      substance satisfactory to the Lender that the Security Parties and all
      corporate shareholders of any Security Party remain in good
      standing.

            

    

     

    
      	
               
      

            	
              12.2.5

            	
              Negative pledge and no
      disposals   The Borrower shall not without the prior
      written consent of the Lender create nor permit to subsist any Encumbrance
      or other third party rights over any of its present or future assets or
      undertaking nor dispose of any those assets or of all or part of that
      undertaking.

            

    

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.2.6

            	
              Merger   The
      Borrower shall not without the prior written consent of the Lender enter
      into any amalgamation, demerger, merger or corporate
      reconstruction.

            

    

     

    
      	
               
      

            	
              12.2.7

            	
              Change of
      business   The Borrower shall not without the prior
      written consent of the Lender make any substantial change to the general
      nature of its business from that carried on at the date of this
      Agreement.

            

    

     

    
      	
               
      

            	
              12.2.8

            	
              No other
      business   The Borrower shall not without the prior
      written consent of the Lender engage in any business other than the
      ownership, operation, chartering and management of the
    Vessel.

            

    

     

    
      	
               
      

            	
              12.2.9

            	
              No place of business in UK or
      US   The Borrower shall not have an established
      place of business in the United Kingdom or the United States of America at
      any time during the Facility
Period.

            

    

     

    
      	
               
      

            	
              12.2.10

            	
              No
      borrowings   The Borrower shall not without the
      prior written consent of the Lender borrow any money (except for the Loan
      and unsecured Financial Indebtedness subordinated to the Loan) nor incur
      any obligations under leases.

            

    

     

    
      	
               
      

            	
              12.2.11

            	
              No substantial
      liabilities   Except in the ordinary course of
      business, the Borrower shall not incur any liability to any third party
      which is in the Lender’s opinion of a substantial
  nature.

            

    

     

    
      	
               
      

            	
              12.2.12

            	
              No loans or other financial
      commitments   The Borrower shall not without the
      prior written consent of the Lender make any loan nor enter into any
      guarantee or indemnity or otherwise voluntarily assume any actual or
      contingent liability in respect of any obligation of any other person
      except for loans made in the ordinary course of business in connection
      with the chartering, operation or repair of the
  Vessel.

            

    

     

    
      	
               
      

            	
              12.2.13

            	
              No
      dividends   Upon the occurrence of an Event of
      Default, the
      Borrower shall not without the prior written consent of the Lender pay any
      dividends or make any other distributions to shareholders or issue any new
      shares.

            

    

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.2.14

            	
              Inspection of
      records   The Borrower will permit the inspection of
      its financial records and accounts from time to time by the Lender or its
      nominee.

            

    

     

    
      	
               
      

            	
              12.2.15

            	
              No change in Relevant
      Documents   The Borrower shall procure that, without
      the prior written consent of the Lender, there shall be no termination of,
      alteration to, or waiver of any term of, any of the Relevant Documents
      which are not Finance Documents.

            

    

     

    
      	
               
      

            	
              12.2.16

            	
              No dealings with Master
      Agreement   The Borrower shall not assign, novate or
      encumber or in any other way transfer any of its rights or obligations
      under the Master Agreement, nor enter into any interest rate exchange or
      hedging agreement with anyone other than the
  Lender.

            

    

     

    
      	
               
      

            	
              12.2.17

            	
              No change in
      shareholding  The Borrower shall not, without the
      Lender’s prior written consent, permit any change in its beneficial
      ownership or control.

            

    

     

    
      	
               
      

            	
              12.2.18

            	
              No delivery into Bareboat
      Charter or Charter  The Borrower shall not permit the
      Vessel to be delivered into service under the Bareboat Charter or any
      Charter or other contract of employment until either the Borrower has
      received written confirmation from the Lender that the Mortgage has been
      registered against the Vessel or the Bareboat Charterer or Charterer (as
      applicable) has given to the Lender a subordination letter in a form and
      substance acceptable to the Lender, in its discretion, confirming that the
      Lender’s rights as mortgagee under the Mortgage rank before any maritime
      lien which the Bareboat Charterer or Charterer (as applicable) may have
      for its claims under or in connection with the Bareboat Charter or Charter
      respectively.

            

    

     

    
      	
               
      

            	
              12.3

            	
              Vessel
      undertakings

            

    

     

    
      	
               
      

            	
              12.3.1

            	
              No sale of
      Vessel   The Borrower shall not sell or otherwise
      dispose of the Vessel or any shares in the Vessel nor agree to do so
      without the prior written consent of the
Lender.

            

    

     

    
      	
               
      

            	
              12.3.2

            	
              No chartering after Event of
      Default   Following the occurrence and during the
      continuation of an Event of Default the Borrower shall not without the
      prior written consent of the Lender let the Vessel on charter or renew or
      extend any charter or other contract of employment of the Vessel (nor
      agree to do so).

            

    

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.3.3

            	
              No change in
      management   The Borrower shall procure that,
      without the prior written consent of the Lender, there shall be no
      termination of, alteration to, or waiver of any term of, the Management
      Agreement(s) and
      the Borrower shall not, and shall procure that the Bareboat Charterer does
      not, without the prior written consent of the Lender, permit the Managers
      to sub-contract or delegate the commercial or technical management of the
      Vessel to any third party.

            

    

     

    
      	
               
      

            	
              12.3.4

            	
              Registration of
      Vessel   The Borrower undertakes to maintain the
      registration of the Vessel under the flag stated in Recital (A) for the
      duration of the Facility Period unless the Lender agrees otherwise in
      writing.

            

    

     

    
      	
               
      

            	
              12.3.5

            	
              Evidence of current
      COFR   The Borrower will, if and for so long as the
      Vessel trades in the United States of America and Exclusive Economic Zone
      (as defined in the United States Oil Pollution Act 1990), obtain, retain
      and provide the Lender with a copy of, a valid Certificate of Financial
      Responsibility for the Vessel under that Act and will comply strictly with
      the requirements of that Act.

            

    

     

    
      	
               
      

            	
              12.3.6

            	
              ISM Code
      compliance   The Borrower
  will:

            

    

     

    
      	
               
      

            	
              (a)

            	
              procure
      that the Vessel remains for the duration of the Facility Period subject to
      a SMS;

            

    

     

    
      	
               
      

            	
              (b)

            	
              maintain
      a valid and current SMC for the Vessel throughout the Facility Period and
      provide a copy to the Lender;

            

    

     

    
      	
               
      

            	
              (c)

            	
              procure
      that the ISM Company maintains a valid and current DOC throughout the
      Facility Period and provide a copy to the Lender;
  and

            

    

     

    
      	
               
      

            	
              (d)

            	
              immediately
      notify the Lender in writing of any actual or threatened withdrawal,
      suspension, cancellation or modification of the SMC of the Vessel or of
      the DOC of the ISM Company.

            

    

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.3.7

            	
              ISPS Code
      compliance   The Borrower
  will:

            

    

     

    
      	
               
      

            	
              (a)

            	
              for
      the duration of the Facility Period comply with the ISPS Code in relation
      to the Vessel and procure that the Vessel and the ISPS Company comply with
      the ISPS Code;

            

    

     

    
      	
               
      

            	
              (b)

            	
              maintain
      a valid and current ISSC for the Vessel throughout the Facility Period and
      provide a copy to the Lender; and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              12.3.8

            	
              Annex VI
      compliance   The Borrower
  will:

            

    

     

    
      	
               
      

            	
              (a)

            	
              for
      the duration of the Facility Period comply with Annex VI in relation to
      the Vessel and procure that the Vessel’s master and crew are familiar
      with, and that the Vessel complies with, Annex
  VI;

            

    

     

    
      	
               
      

            	
              (b)

            	
              maintain
      a valid and current IAPPC for the Vessel throughout the Facility Period
      and provide a copy to the Lender;
and

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              12.3.9

            	
              Physical condition
      survey   The Borrower will permit the Lender to
      conduct, and will procure that the Bareboat Charterer and/or any other
      Charterer permits the Lender to conduct, a physical condition survey of
      the Vessel and to conduct a comprehensive inspection of the class and
      other records of the Vessel by a surveyor appointed by the Lender (in its
      discretion) at any reasonable time and from time to time during the
      Facility Period, at the Borrower’s expense and without interruption of the
      operation of the Vessel.

            

    

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.3.10

            	
              Financial
      covenants  The Borrower undertakes to, and shall procure
      that the Guarantor, immediately informs the Lender of any financial
      covenants given to any other bank or financial institution by the
      Guarantor or any financial covenants which evidence, in the opinion of the
      Lender, a stronger financial position in favour of such banks or other
      financial institutions and shall procure that the Guarantor undertakes to
      comply with any such financial
covenants.

            

    

     

    
      	
              13  

            	
              Events
      of Default

            

    

     

    
      	
               
      

            	
              13.1

            	
              Events of
      Default   Each of the events or circumstances set
      out in this Clause 13.1 is an Event of
      Default.

            

    

     

    
      	
               
      

            	
              13.1.1

            	
              Non-payment   The
      Borrower does not pay on the due date any amount payable by it under a
      Finance Document at the place at and in the currency in which it is
      expressed to be payable.

            

    

     

    
      	
               
      

            	
              13.1.2

            	
              Other
      obligations   A Security Party or any other person
      (except the Lender) does not comply with any provision of any of the
      Relevant Documents to which that Security Party or person is a party
      (other than as referred to in Clause 13.1.1
      (Non-payment)).

            

    

     

    
      	
               
      

            	
              No
      Event of Default under this Clause 13.1.2
      will occur if the failure to comply is capable of remedy and is remedied
      within ten (10) Business Days of the Lender giving notice to the Borrower
      or the Borrower becoming aware of the failure to
  comply.

            

    

     

    
      	
               
      

            	
              13.1.3

            	
              Misrepresentation   Any
      representation, warranty or statement made or deemed to be repeated by a
      Security Party in any Finance Document or any other document delivered by
      or on behalf of a Security Party under or in connection with any Finance
      Document is or proves to have been incorrect or misleading in any material
      respect when made or deemed to be
repeated.

            

    

     

    
      	
               
      

            	
              13.1.4

            	
              Cross
      default   Any Financial Indebtedness of a Security
      Party:

            

    

     

    
      	
               
      

            	
              (a)

            	
              is
      not paid when due or within any originally applicable grace period;
      or

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              is
      declared to be, or otherwise becomes, due and payable before its specified
      maturity as a result of an event of default (however described);
      or

            

    

     

    
      	
               
      

            	
              (c)

            	
              is
      capable of being declared by a creditor to be due and payable before its
      specified maturity as a result of such an
event.

            

    

     

    
      	
               
      

            	
              13.1.5

            	
              Insolvency

            

    

     

    
      	
               
      

            	
              (a)

            	
              A
      Security Party is unable or admits inability to pay its debts as they fall
      due, suspends making payments on any of its debts or, by reason of actual
      or anticipated financial difficulties, commences negotiations with one or
      more of its creditors with a view to rescheduling any of its Financial
      Indebtedness.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      value of the assets of a Security Party is less than its liabilities
      (taking into account contingent and prospective
    liabilities).

            

    

     

    
      	
               
      

            	
              (c)

            	
              A
      moratorium is declared in respect of any Financial Indebtedness of a
      Security Party.

            

    

     

    
      	
               
      

            	
              13.1.6

            	
              Insolvency
      proceedings   Any corporate action, legal
      proceedings or other procedure or step is taken
  for:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      suspension of payments, a moratorium of any Financial Indebtedness,
      winding-up, dissolution, administration, bankruptcy or reorganisation (by
      way of voluntary arrangement, scheme of arrangement or otherwise) of a
      Security Party (other than a solvent liquidation or reorganisation of a
      Security Party which is not the
Borrower);

            

    

     

    
      	
               
      

            	
              (b)

            	
              a
      composition, compromise, assignment or arrangement with any creditor of a
      Security Party;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      appointment of a liquidator (other than in respect of a solvent
      liquidation of a Security Party which is not the Borrower), receiver,
      administrative receiver, administrator, compulsory manager, or trustee or
      other similar officer in respect of any Security Party or any of its
      assets; or

            

    

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (d)

            	
              enforcement
      of any Encumbrance over any assets of a Security
  Party,

            

    

     

    
      	 	 	or
      any analogous procedure or step is taken in any
    jurisdiction. 

    

     

    
      	
               
      

            	
              13.1.7

            	
              Creditors’
      process   Any expropriation, attachment,
      sequestration, distress or execution affects any asset or assets of a
      Security Party and is not discharged within fourteen (14)
      days.

            

    

     

    
      	
               
      

            	
              13.1.8

            	
              Change in ownership or control
      of the Borrower   There is any change in the
      beneficial ownership or control of the Borrower from that advised to the
      Lender by the Borrower at the date of this
  Agreement.

            

    

     

    
      	
               
      

            	
              13.1.9

            	
              Repudiation   A
      Security Party or any other person (except the Lender) repudiates any of
      the Relevant Documents to which that Security Party or person is a party
      or evidences an intention to do so.

            

    

     

    
      	
               
      

            	
              13.1.10

            	
              Impossibility or
      illegality   Any event occurs which would, or would with
      the passage of time, render performance of any of the Relevant Documents
      by a Security Party or any other party to any such document impossible,
      unlawful or unenforceable by the Lender or a Security
    Party.

            

    

     

    
      	
               
      

            	
              13.1.11

            	
              Conditions
      subsequent   Any of the conditions referred to in Clause
      3.3 (Conditions
      subsequent) is not satisfied
      within the time reasonably required by the
  Lender.

            

    

     

    
      	
               
      

            	
              13.1.12

            	
              Revocation or modification of
      authorisation   Any consent, licence, approval,
      authorisation, filing, registration or other requirement of any
      governmental, judicial or other public body or authority which is now, or
      which at any time during the Facility Period becomes, necessary to enable
      a Security Party or any other person (except the Lender) to comply with
      any of its obligations under any of the Relevant Documents is not
      obtained, is revoked, suspended, withdrawn or withheld, or is modified in
      a manner which the Lender considers is, or may be, prejudicial to the
      interests of the Lender, or ceases to remain in full force and
      effect.

            

    

     

    
      	
               
      

            	
              13.1.13

            	
              Curtailment of
      business   A Security Party ceases, or threatens to
      cease, to carry on all or a substantial part of its business or, as a
      result of intervention by or under the authority of any government, the
      business of a Security Party is wholly or partially curtailed or
      suspended, or all or a substantial part of the assets or undertaking of a
      Security Party is seized, nationalised, expropriated or compulsorily
      acquired.

            

    

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	 	13.1.14 	
              Reduction of
      capital   A Security Party reduces its authorised or
      issued or subscribed capital. 

            

    

     

    
      	
               
      

            	
              13.1.15

            	
              Loss of
      Vessel   The Vessel suffers a Total Loss or is otherwise
      destroyed, abandoned, confiscated, forfeited or condemned as prize, or a
      similar event occurs in relation to any other vessel which may from time
      to time be mortgaged to the Lender as security for the payment of all or
      any part of the Indebtedness, except that a Total Loss, or event similar
      to a Total Loss in relation to any other vessel, shall not be an Event of
      Default if:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Vessel or other vessel is insured in accordance with the Security
      Documents; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              no
      insurer has refused to meet or has disputed the claim for Total Loss and
      it is not apparent to the Lender in its discretion that any such refusal
      or dispute is likely to occur; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              payment
      of all insurance proceeds in respect of the Total Loss is made in full to
      the Lender within one hundred and twenty (120) days of the occurrence of
      the casualty giving rise to the Total Loss
      in question or such longer period as the Lender may in its discretion
      agree.

            

    

     

    
      	
               
      

            	
              13.1.16

            	
              Challenge to
      registration   The registration of the Vessel or the
      Mortgage is contested or becomes void or voidable or liable to
      cancellation or termination, or the validity or priority of the Mortgage
      is contested.

            

    

     

    
      	
               
      

            	
              13.1.17

            	
              War   The
      country of registration of the Vessel becomes involved in war (whether or
      not declared) or civil war or is occupied by any other power and the
      Borrower does not, within thirty (30) days of such war or civil war,
      change the flag of the Vessel to a flag acceptable to the Lender in its
      absolute discretion and the Lender in its discretion considers that, as a
      result, the security conferred by the Security Documents is materially
      prejudiced.

            

    

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              13.1.18

            	
              Master Agreement
      termination   The Master Agreement is for any reason
      terminated, cancelled, suspended, rescinded, revoked or otherwise ceases
      to remain in full force and effect, unless any such event occurs subject
      to an agreement between the Lender and the
  Borrower.

            

    

     

    
      	
               
      

            	
              13.1.19

            	
              Notice of
      termination   The Guarantor gives notice to the
      Lender to determine its obligations under the
  Guarantee.

            

    

     

    
      	
               
      

            	
              13.1.20

            	
              Material adverse
      change   Any event or series of events occurs which,
      in the opinion of the Lender, is likely to have a materially adverse
      effect on the business, assets, financial condition or credit worthiness
      of a Security Party.

            

    

     

    
      	
               
      

            	
              13.2

            	
              Acceleration   If
      an Event of Default is continuing the Lender may by notice to the
      Borrower:

            

    

     

    
      	
               
      

            	
              13.2.1

            	
              declare
      that the Loan, together with accrued interest, and all other amounts
      accrued or outstanding under the Finance Documents are immediately due and
      payable, whereupon they shall become immediately due and payable;
      and/or

            

    

     

    
      	
               
      

            	
              13.2.2

            	
              declare
      that the Loan is payable on demand, whereupon it shall immediately become
      payable on demand by the Lender.

            

    

     

    
      	
              14  

            	
              Assignment and Sub-Participation

            

    

     

    
      	
               
      

            	
              14.1

            	
              Lender’s
      rights   With prior written notice to the Borrower,
      the Lender may assign any of its rights under this Agreement or transfer
      by novation any of its rights and obligations under this Agreement to any
      other branch of the Lender or to any other bank or financial institution,
      and may grant sub-participations in all or any part of the
      Loan.

            

    

     

    
      	
               
      

            	
              14.2

            	
              Borrower’s
      co-operation   The Borrower will co-operate fully
      with the Lender in connection with any assignment, transfer or
      sub-participation; will execute and procure the execution of such
      documents as the Lender may require in that connection; and irrevocably
      authorises the Lender to disclose to any proposed assignee, transferee or
      sub-participant (whether before or after any assignment, transfer
      or sub-participation and whether or not any assignment, transfer or
      sub-participation shall take place) all information relating to the
      Security Parties, the Loan, the Relevant Documents and the Vessel which
      the Lender may in its discretion consider necessary or
      desirable.

            

    

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               

            

    

     

    
      	
               
      

            	
              14.3

            	
              Rights of assignee or
      transferee   Any assignee or transferee of the
      Lender shall (unless limited by the express terms of the assignment or
      novation) take the full benefit of every provision of the Finance
      Documents benefiting the Lender.

            

    

     

    
      	
               
      

            	
              14.4

            	
              No assignment or transfer by
      the Borrower   The Borrower may not assign any of
      its rights or transfer any of its rights or obligations under the Finance
      Documents.

            

    

     

    
      	
              15  

            	
              The
      Master Agreement

            

    

     

    
      	
               
      

            	
              15.1

            	
              Applicability   The
      following provisions of this Clause 15 will apply if the Lender and the
      Borrower have entered, or enter during the Facility Period, at the
      Lender’s discretion, into one or more Transactions to hedge interest rate
      risks in respect of the Loan or any part
  thereof.

            

    

     

    
      	
               
      

            	
              15.2

            	
              Additional
      Termination   If the Loan is for any reason not
      advanced to the Borrower on or before the Availability Termination Date,
      and the Lender and the Borrower have entered into any Transactions on or
      before the Availability Termination Date, these Transactions shall
      terminate on the Availability Termination
Date.

            

    

     

    
      	
               
      

            	
              15.3

            	
              Adjustment of Notional
      Amounts   If:

            

    

     

    
      	
               
      

            	
              15.3.1

            	
              the
      amount of the Loan actually advanced by the Lender to the Borrower is less
      than the Notional Amount (or the aggregate Notional Amounts) of the
      Hedging Transactions entered into on or before the Drawdown Date;
      or

            

    

     

    
      	
               
      

            	
              15.3.2

            	
              the
      Borrower prepays part of the Loan under any provision of this Agreement,
      and the amount of the Loan remaining outstanding after that prepayment is
      less than the Notional Amount (or the aggregate Notional Amounts) of the
      Hedging Transactions then in
effect,

            

    

     

    
      	 	 	the
      Borrower’s obligations under those Hedging Transactions shall (unless
      otherwise agreed by the Lender) be calculated (so far as the Lender
      considers it practicable to do so) by reference to a Notional Amount (or
      aggregate Notional Amounts) equal to the amount of the Loan actually
      advanced or remaining outstanding after that prepayment, as reduced on
      each Repayment Date by the amount of the Repayment Instalment then due,
      and adjusted if necessary in accordance with Clause 5.2 (Reduction of Repayment
      Instalments). 

    

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              15.4

            	
              Authority   In
      order to give effect to Clause 15.3 (Adjustments of Notional
      Amounts), or in the event of voluntary or mandatory prepayment by
      the Borrower of the whole of the Loan, the Borrower irrevocably authorises
      the Lender to amend, restructure, unwind, cancel, net out, terminate,
      liquidate, transfer or assign any of the rights or obligations under any
      Hedging Transaction, and/or to enter into any other interest rate exchange
      and/or hedging transaction or commitment with any other
      counterparty.

            

    

     

    
      	
               
      

            	
              15.5

            	
              Termination of
      Transactions   If the exercise of the Lender’s
      rights under Clause 15.2 (Additional
      Termination) and/or Clause 15.4 (Authority) results in
      the termination of any Transaction, that Transaction shall, for the
      purposes of the Master Agreement (including, without limitation, section
      7.1 of the Master Agreement) be treated as a terminated transaction
      resulting from an Event of Default by the
  Borrower.

            

    

     

    
      	
               
      

            	
              15.6

            	
              Indemnity   The
      Borrower will indemnify the Lender from time to time on demand in respect
      of all liabilities, losses, costs or expenses suffered, incurred or
      sustained by the Lender arising in any way in relation to the exercise by
      the Lender of its rights under this Clause 15, or arising in any way from
      any other termination, cancellation, unwinding or restructuring of any
      Transaction.

            

    

     

    
      	
              16  

            	
              Set-Off

            

    

     

    
      	
               
      

            	
              16.1

            	
              Set-off   The
      Lender may set off any matured obligation due from the Borrower under any
      Finance Document against any matured obligation owed by the Lender to the
      Borrower, regardless of the place of payment, booking branch or currency
      of either obligation.  If the obligations are in different
      currencies, the Lender may convert either obligation at a market rate of
      exchange in its usual course of business for the purpose of the
      set-off.

            

    

     

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              16.2

            	
              Master Agreement rights
        The rights conferred on the Lender by this Clause 16
      shall be in addition to, and without prejudice to or limitation of, the
      rights of netting and set off conferred on the Lender by the Master
      Agreement.

            

    

     

    
      	
              17  

            	
              Payments

            

    

     

    
      	
               
      

            	
              17.1

            	
              Payments   Each
      amount payable by the Borrower under a Finance Document shall be paid to
      such account at such bank as the Lender may from time to time direct to
      the Borrower in the Currency of Account and in such funds as are customary
      at the time for settlement of transactions in the relevant currency in the
      place of payment.  Payment shall be deemed to have been received
      by the Lender on the date on which the Lender receives authenticated
      advice of receipt, unless that advice is received by the Lender on a day
      other than a Business Day or at a time of day (whether on a Business Day
      or not) when the Lender in its discretion considers that it is impossible
      or impracticable for the Lender to utilise the amount received for value
      that same day, in which event the payment in question shall be deemed to
      have been received by the Lender on the Business Day next following the
      date of receipt of advice by the
Lender.

            

    

     

    
      	
               
      

            	
              17.2

            	
              No deductions or
      withholdings   Each payment (whether of principal or
      interest or otherwise) to be made by the Borrower under a Finance Document
      shall, subject only to Clause 17.3 (Grossing-up), be made
      free and clear of and without deduction for or on account of any Taxes or
      other deductions, withholdings, restrictions, conditions or counterclaims
      of any nature.

            

    

     

    
      	
               
      

            	
              17.3

            	
              Grossing-up   If
      at any time any law requires (or is interpreted to require) the Borrower
      to make any deduction or withholding from any payment, or to change the
      rate or manner in which any required deduction or withholding is made, the
      Borrower will promptly notify the Lender and, simultaneously with making
      that payment, will pay to the Lender whatever additional amount (after
      taking into account any additional Taxes on, or deductions or withholdings
      from, or restrictions or conditions on, that additional amount) is
      necessary to ensure that, after
      making the deduction or withholding, the Lender receives a net sum equal
      to the sum which the Lender would have received had no deduction or
      withholding been made.

            

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

     

    
      	
               
      

            	
              17.4

            	
              Evidence of
      deductions   If at any time the Borrower is required
      by law to make any deduction or withholding from any payment to be made by
      it under a Finance Document, the Borrower will pay the amount required to
      be deducted or withheld to the relevant authority within the time allowed
      under the applicable law and will, no later than thirty (30) days after
      making that payment, deliver to the Lender an original receipt issued by
      the relevant authority, or other evidence acceptable to the Lender,
      evidencing the payment to that authority of all amounts required to be
      deducted or withheld.

            

    

     

    
      	
               
      

            	
              17.5

            	
              Adjustment of due
      dates   If any payment or transfer of funds to be
      made under a Finance Document, other than a payment of interest on the
      Loan or a payment under the Master Agreement, shall be due on a day which
      is not a Business Day, that payment shall be made on the next succeeding
      Business Day (unless the next succeeding Business Day falls in the next
      calendar month in which event the payment shall be made on the next
      preceding Business Day).  Any such variation of time shall be
      taken into account in computing any interest in respect of that
      payment.

            

    

     

    
      	
               
      

            	
              17.6

            	
              Control
      Account   The Lender shall open and maintain on its
      books a control account in the name of the Borrower showing the advance of
      the Loan and the computation and payment of interest and all other sums
      due under this Agreement and the Master Agreement.  The
      Borrower’s obligations to repay the Loan and to pay interest and all other
      sums due under this Agreement and the Master Agreement shall
      be evidenced by the entries from time to time made in the control account
      opened and maintained under this Clause 17.6
      and those entries will, in the absence of manifest error, be conclusive
      and binding.

            

    

     

    
      	
              18  

            	
              Notices

            

    

     

    
      	
               
      

            	
              18.1

            	
              Communications in
      writing   Any communication to be made under or in
      connection with this Agreement shall be made in writing and, unless
      otherwise stated, may be made by fax or
letter.

            

    

     

    
      	
               
      

            	
              18.2

            	
              Addresses   The
      address and fax number (and the department or officer, if any, for whose
      attention the communication is to be made) of each party to this Agreement
      for any communication or document to be made or delivered under or in
      connection with this Agreement are:

            

    

     

    
      	
               
      

            	
              18.2.1

            	
              in
      the case of the Borrower, c/o Cardiff Marine Inc. of 80 Kifissias Avenue,
      151 25 Amaroussion, Greece (fax no: +30 210 809 0585) marked for the
      attention of Mr. A. Ioannidis; and

            

    

     

    
      	
               
      

            	
              18.2.2

            	
              in
      the case of the Lender, at the address at the head of this Agreement (fax
      no: +49 40 3333 34118) marked for the attention of Timo
    Kühl;

            

    

     

    
      	 	 or any substitute address, fax number, department or officer as
      either party may notify to the other by not less than five (5) Business
      Days’ notice.

    

     

    
       

      
        	 	18.3 	
                 Delivery   Any
      communication or document made or delivered by one party to this Agreement
      to the other under or in connection this Agreement will only be
      effective: 

              

      

    

     

    
      	
               
      

            	
              18.3.1

            	
              if
      by way of fax, when received in legible form;
or

            

    

     

    
      	
               
      

            	
              18.3.2

            	
              if
      by way of letter, when it has been left at the relevant address or five
      (5) Business Days after being deposited in the post postage prepaid in an
      envelope addressed to it at that
address;

            

    

     

    
      	 	 	and,
      if a particular department or officer is specified as part of its address
      details provided under Clause 18.2 (Addresses), if
      addressed to that department or
officer. 

    

     

    
      	 	 	Any
      communication or document to be made or delivered to the Lender will be
      effective only when actually received by the
  Lender. 

    

     

    
      	
               
      

            	
              18.4

            	
              English
      language   Any notice given under or in connection
      with this Agreement must be in English.  All other documents
      provided under or in connection with this Agreement must
    be:

            

    

     

    
      	
               
      

            	
              18.4.1

            	
              in
      English; or

            

    

     

    
      	
               
      

            	
              18.4.2

            	
              if
      not in English, and if so required by the Lender, accompanied by a
      certified English translation and, in this case, the English translation
      will prevail unless the document is a constitutional, statutory or other
      official document.

            

    

     

    
      	
              19  

            	
              Partial
      Invalidity

            

    

     

    If,
at any time, any provision of a Finance Document is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

     

    
      	
              20  

            	
              Remedies
      and Waivers

            

    

     

    No
failure to exercise, nor any delay in exercising, on the part of the Lender, any
right or remedy under a Finance Document shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy.  The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.

     

    
      	
              21  

            	
              Miscellaneous

            

    

     

    
      	
               
      

            	
              21.1

            	
              No oral
      variations   No variation or amendment of a Finance
      Document shall be valid unless in writing and signed on behalf of the
      Lender.

            

    

     

    
      	
               
      

            	
              21.2

            	
              Further
      Assurance   If any provision of a Finance Document
      shall be invalid or unenforceable in whole or in part by reason of any
      present or future law or any decision of any court, or if the documents at
      any time held by or on behalf of the Lender are considered by the Lender
      for any reason insufficient to carry out the terms of this Agreement, then
      from time to time the Borrower will promptly, on demand by the Lender,
      execute or procure the execution of such further documents
      as in the opinion of the Lender are necessary to provide adequate security
      for the repayment of the
Indebtedness.

            

    

     

    
      	
               
      

            	
              21.3

            	
              Rescission of payments
      etc.   Any discharge, release or reassignment by the
      Lender of any of the security constituted by, or any of the obligations of
      a Security Party and/or the Bareboat Charterer contained in, a Finance
      Document shall be (and be deemed always to have been) void if any act
      (including, without limitation, any payment) as a result of which such
      discharge, release or reassignment was given or made is subsequently
      wholly or partially rescinded or avoided by operation of any
      law.

            

    

     

    
      	
               
      

            	
              21.4

            	
              Certificates   Any
      certificate or statement signed by an authorised signatory of the Lender
      purporting to show the amount of the Indebtedness (or any part of the
      Indebtedness) or any other amount referred to in any Finance Document
      shall, save for manifest error or on any question of law, be conclusive
      evidence as against the Borrower of that
amount.

            

    

     

    
      	
               
      

            	
              21.5

            	
              Counterparts   This
      Agreement may be executed in any number of counterparts each of which
      shall be original but which shall together constitute the same
      instrument.

            

    

     

    
      	
               
      

            	
              21.6

            	
              Contracts (Rights of Third
      Parties) Act 1999   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.

            

    

     

    
      	
              22  

            	
              Law and Jurisdiction

            

    

     

    
      	
               
      

            	
              22.1

            	
              Governing
      law   This Agreement shall in all respects be
      governed by and interpreted in accordance with English
  law.

            

    

     

    
      	
               
      

            	
              22.2

            	
              Jurisdiction   For
      the exclusive benefit of the Lender, the parties to this Agreement
      irrevocably agree that the courts of England are to have jurisdiction to
      settle any disputes which may arise out of or in connection with this
      Agreement and that any proceedings may be brought in those
      courts.

            

    

     

    
      	
               
      

            	
              22.3

            	
              Alternative
      jurisdictions   Nothing contained in this Clause 22
      shall limit the right of the Lender to commence any proceedings against
      the Borrower in any other court of competent jurisdiction nor shall the
      commencement of any proceedings against the Borrower in one or more
      jurisdictions preclude the commencement of any proceedings in any other
      jurisdiction, whether concurrently or
not.

            

    

     

    
      	
               
      

            	
              22.4

            	
              Waiver of
      objections   The Borrower irrevocably waives any
      objection which it may now or in the future have to the laying of the
      venue of any proceedings in any court referred to in this Clause 22, and any claim that those proceedings have
      been brought in an inconvenient or inappropriate forum, and irrevocably
      agrees that a judgment in any proceedings commenced in any such court
      shall be conclusive and binding on it and may be enforced in the courts of
      any other jurisdiction.

            

    

     

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              22.5

            	
              Service of
      process   Without prejudice to any other mode of
      service allowed under any relevant law, the
  Borrower:

            

    

     

    
      	 	
              22.5.1 

            	
              irrevocably
      appoints Ince & Co. of International House, 1 St. Katharine’s Way,
      London E1W 1AY, United Kingdom, c/o Mr. M. Volikas as its agent for
      service of process in relation to any proceedings before the English
      courts in connection with this Agreement;
  and 

            

    

     

    
      	
               
      

            	
              22.5.2

            	
              agrees
      that failure by a process agent to notify the Borrower of the process will
      not invalidate the proceedings
concerned.

            

    

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    SCHEDULE
1: Conditions Precedent and Subsequent

     

    Part
I: Conditions precedent

     

    
      	
              1  

            	
              Security
      Parties

            

    

     

    
      	
               
      

            	
              (a)

            	
              Constitutional
      Documents   Copies of the constitutional documents
      of each Security Party and/or the relevant Bareboat Charterer and its
      general partner (as applicable) together with such other evidence as the
      Lender may reasonably require that each Security Party and/or the relevant
      Bareboat Charterer (as applicable) is duly incorporated in its country of
      incorporation and remains in existence with power to enter into, and
      perform its obligations under, the Relevant Documents to which it is or is
      to become a party.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Certificates of good
      standing   A certificate of good standing in respect
      of each Security Party.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Board
      resolutions   A copy of a resolution of the board of
      directors of each Security Party and the relevant Bareboat Charterer (if
      applicable):

            

    

     

    
      	
               
      

            	
              (i)

            	
              approving
      the terms of, and the transactions contemplated by, the Relevant Documents
      to which it is a party and resolving that it execute those Relevant
      Documents; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              authorising
      a specified person or persons to execute those Relevant Documents (and all
      documents and notices to be signed and/or despatched under those
      documents) on its behalf.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Shareholder
      resolutions   A copy of a resolution signed by all
      the holders of the issued shares in each Security Party and the relevant
      Bareboat Charterer (if applicable), approving the terms of, and the
      transactions contemplated by, the Relevant Documents to which that
      Security Party and the relevant Bareboat Charterer (if applicable) is a
      party.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Officer’s
      certificates   A certificate of a duly authorised
      officer of each Security Party and the relevant Bareboat Charterer (if
      applicable) certifying that each copy document relating to it specified in
      this Part I of Schedule 1 is correct, complete and in full force and
      effect as at a date no earlier than the date of this Agreement and setting
      out the names of the directors, officers and shareholders of that Security
      Party and the relevant Bareboat Charterer and the proportion of shares
      held by each shareholder.

            

    

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (f)

            	
              Evidence of
      registration   Where such registration is required
      or permitted under the laws of the relevant jurisdiction, evidence that
      the names of the directors, officers and shareholders of each Security
      Party are duly registered in the companies registry or other registry in
      the country of incorporation of that Security Party and certified register
      excerpts of the relevant Bareboat Charterer and its general partner of
      recent date.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Powers of
      attorney   The notarially attested and legalised
      power of attorney of each Security Party and the relevant Bareboat
      Charterer (if applicable) under which any documents are to be executed or
      transactions undertaken by that Security Party and the relevant Bareboat
      Charterer and its general partner (if
  applicable).

            

    

     

    
      	
              
                2 
      

              

            	
               

            	
              Security and related
      documents

            

    

     

    
      	
               
      

            	
              (a)

            	
              Vessel
      documents   Photocopies, certified as true, accurate
      and complete by a director or the secretary or the legal advisers of the
      Borrower, of:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      MOA;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      bill of sale transferring title in the Vessel to the Borrower free of all
      encumbrances, maritime liens or other
debts;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      protocol of delivery and acceptance evidencing the unconditional physical
      delivery of the Vessel by the Seller to the Borrower pursuant to the
      MOA;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              any
      charterparty or other contract of employment of the Vessel which will be
      in force on the Drawdown Date including, without limitation, the Bareboat
      Charter or any Charter (as applicable) together with any addenda
      thereto;

            

    

     

    
      	
               
      

            	
              (v)

            	
              the
      Management Agreements;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Vessel’s current Safety Construction, Safety Equipment, Safety Radio and
      Load Line Certificates;

            

    

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (vii)

            	
              the
      Vessel’s current SMC;

            

    

     

    
      	
               
      

            	
              (viii)

            	
              the
      ISM Company’s current DOC;

            

    

     

    
      	
               
      

            	
              (ix)

            	
              the
      Vessel’s current ISSC;

            

    

     

    
      	
               
      

            	
              (x)

            	
              the
      Vessel’s current IAPPC;

            

    

     

    
      	
               
      

            	
              (xi)

            	
              the
      Vessel’s current Tonnage
Certificate;

            

    

     

    
      	
               
      

            	
              in
      each case together with all addenda, amendments or
      supplements.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Evidence of Seller’s
      title   Certificate of ownership and encumbrance (or
      equivalent) issued by the Registrar of Ships (or equivalent official) of
      the Vessel’s current flag confirming that the Vessel is owned by the
      Seller and free of registered Encumbrances and an undertaking by the
      Seller to delete the Vessel from its current
  flag.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Evidence of Borrower’s
      title   Evidence that on the Drawdown Date (i) the
      Vessel will be at least provisionally registered under the flag stated in
      Recital (A) in the ownership of the Borrower and (ii) the Mortgage will be
      capable of being registered against the Vessel with first
      priority.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Evidence of
      insurance   Evidence that the Vessel is insured in
      the manner required by the Security Documents and that letters of
      undertaking will be issued in the manner required by the Security
      Documents, together with (if required by the
      Lender) the written approval of the Insurances by an insurance adviser
      appointed by the Lender.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Confirmation of
      class   A Certificate of Confirmation of Class for
      hull and machinery confirming that the Vessel is classed with the highest
      class applicable to vessels of her type with Lloyd’s Register or such
      other classification society as may be acceptable to the Lender free of
      overdue recommendations affecting
class.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Survey
      report   A report by a
      surveyor (at the expense of the Borrower) instructed by the Lender to
      inspect the Vessel confirming that the condition of the Vessel is in all
      respects acceptable to the Lender.

            

    

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (g)

            	
              Valuation   A
      valuation of the Vessel addressed to the Lender from a broker acceptable
      to the Lender certifying a value for the Vessel, assessed in such manner
      as the Lender may require, acceptable to the
  Lender.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Security
      Documents   The Security Documents, together with
      all other documents required by any of them, including, without
      limitation, all notices of assignment and/or charge and evidence that
      those notices will be duly acknowledged by the recipients together with an
      acknowledgement in respect of the Vessel containing, inter alia, a
      confirmation that there does not exist any prior notice of assignment in
      respect of the Vessel and stating that the relevant Bareboat Charterer or
      the Charterer (as applicable) fully subordinates its rights in respect of
      the Vessel and the Borrower to the rights of the Lender under the Security
      Documents.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Managers’
      confirmation   The written confirmation of the
      relevant Managers that, throughout the Facility Period during which the
      Bareboat Charter is in effect, unless otherwise agreed by the Lender, they
      will remain the commercial and technical managers of the Vessel and that
      they will not, without the prior written consent of the Lender,
      sub-contract or delegate the commercial or technical management of the
      Vessel to any third party and confirming in terms acceptable to the Lender
      that, following the occurrence of an Event of Default, all claims of the
      Managers against the relevant Bareboat Charterer shall be subordinated to
      the claims of the Lender under the Finance
  Documents.

            

    

     

    
      	
               
      

            	
              (j)

            	
              No
      disputes   The written confirmation of the Borrower
      that there is no dispute under any of the Relevant Documents as between
      the parties to any such document.

            

    

     

    
      	
               
      

            	
              (k)

            	
              Other Relevant
      Documents   Copies of each of the Relevant Documents
      not otherwise comprised in the documents listed in this Part I of Schedule
      1.

            

    

     

    
      	
              3

            	
              Legal
      opinions

            

    

     

    
      	
            	
               

            	
              If
      a Security Party and the Bareboat Charterer is incorporated in a
      jurisdiction other than England and Wales or if any Finance Document is
      governed by the laws of a jurisdiction other than England and Wales, a
      legal opinion of the legal advisers to the Lender in each relevant
      jurisdiction, substantially in the form or forms provided to the Lender
      prior to signing this Agreement or confirmation satisfactory to the Lender
      that such an opinion will be given.

            

    

     

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

     

    
      	
              4

            	
              Other documents and
      evidence

            

    

     

    
      	
               
      

            	
              (a)

            	
              Drawdown
      Notice   A duly completed Drawdown
      Notice.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Process
      agent   Evidence that any process agent referred to
      in Clause 22.5 (Service of process) and
      any process agent appointed under any other Finance Document has accepted
      its appointment.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Other
      authorisations   A copy of any other consent,
      licence, approval, authorisation or other document, opinion or assurance
      which the Lender considers to be necessary or desirable (if it has
      notified the Borrower accordingly) in connection with the entry into and
      performance of the transactions contemplated by any of the Relevant
      Documents or for the validity and enforceability of any of the Relevant
      Documents.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Financial
      statements   Copies of the Original Financial
      Statements.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Fees   Evidence
      that the fees, costs and expenses then due from the Borrower under Clause
      8 (Indemnities) and Clause
      9 (Fees) have been paid or
      will be paid by the Drawdown Date.

            

    

     

    
      	
               
      

            	
              (f)

            	
              “Know your customer”
      documents   Such documentation and other evidence as
      is reasonably requested by the Lender in order for the Lender to comply
      with all necessary “know your customer” or similar identification
      procedures in relation to the transactions contemplated in the Finance
      Documents.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Mortgagee’s Insurances
      Fees Payment to
      the Lender of all fees in relation to inspections, valuations, legal fees
      and premiums for Mortgagee’s Insurances (MII and
  MAP).

            

    

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    Part
II: Conditions subsequent

     

    
      	
              1  

            	
              Evidence of Borrower’s
      title   Certificate of ownership and encumbrance (or
      equivalent) issued by the Registrar of Ships (or equivalent official) of
      the flag stated in Recital (A) confirming that (a) the Vessel is
      permanently registered under that flag in the ownership of the Borrower,
      (b) the Mortgage has been registered with first priority against the
      Vessel and (c) there are no further Encumbrances registered against the
      Vessel.

            

    

     

    
      	
              2

            	
              Deletion by
      Seller   Evidence that the Vessel has been deleted
      from its current flag.

            

    

     

    
      	
              3

            	
              Letters of
      undertaking   Letters of undertaking in respect of
      the Insurances as required by the Security Documents together with copies
      of the relevant policies or cover notes or entry certificates duly
      endorsed with the interest of the
Lender.

            

    

     

    
      	
              4

            	
              Acknowledgements of
      notices   Acknowledgements of all notices of
      assignment and/or charge given pursuant to the Security
      Documents.

            

    

     

    
      	
              5

            	
              Legal
      opinions   Such of the legal opinions specified in
      Part I of this Schedule 1 as have not already been provided to the
      Lender.

            

    

     

    
      	
              6

            	
              Companies Act
      registrations   Evidence that the prescribed
      particulars of the Security Documents have been delivered to the Registrar
      of Companies of England and Wales within the statutory time
      limit.

            

    

     

    
      	
              7

            	
              Managers’
      confirmation   The written confirmation of the
      relevant Managers that, throughout the Facility Period during which any
      other Charter other than the Bareboat Charter is in effect, unless
      otherwise agreed by the Lender, they will remain the commercial and
      technical managers of the Vessel and that they will not, without the prior
      written consent of the Lender, sub-contract or delegate the commercial or
      technical management of the Vessel to any third party and confirming in
      terms acceptable to the Lender that, following the occurrence of an Event
      of Default, all claims of the Managers against the  Owner shall
      be subordinated to the claims of the Lender under the Finance
      Documents.

            

    

     

    
      	
              8

            	
              Certificate of Financial
      Responsibility  A photocopy, certified as true, accurate
      and complete by a director or the secretary or the legal advisers of the
      Borrower of the Vessel’s current Certificate of Financial Responsibility
      issued pursuant to the United States Oil Pollution Act 1990 to be provided
      by the Borrower by 31 October 2007.

            

    

     

    
      	
              9

            	
              Carrier Initiative
      Agreement  A photocopy, certified as true, accurate and
      complete by a director or the secretary or the legal advisers of the
      Borrower of the Borrower’s current Carrier Initiative Agreement with the
      United States’ Customs Service to be provided by the Borrower by 31
      October 2007.

            

    

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              SCHEDULE
      2: Form of Drawdown Notice

            

    

     

    
      	
              To:

            	
              DEUTSCHE SCHIFFSBANK
      AKTIENGESELLSCHAFT

            

    

     

     

     

     

     

    
      	From: 	IOLI OWNING COMPANY
      LIMITED 

    

    

    

                          

    

    [Date]

    

    Dear
Sirs

     

    Drawdown
Notice

     

    We
refer to the Loan Agreement
dated                      200 
made between ourselves and yourselves (the “Agreement”).

     

    Words
and phrases defined in the Agreement have the same meaning when used in this
Drawdown Notice.

     

    Pursuant
to Clause 4 of the Agreement, we irrevocably
request that you advance the sum of
[                                    ]
to us on    
                                   
200  , which is a Business Day, by paying the amount of the advance in
accordance with the MOA.

     

    We
warrant that the representations and warranties contained in Clause 11.1 of the Agreement are true and correct at the date
of this Drawdown Notice and will be true and correct on
             
200 , that no Default has occurred and is continuing, and that no Default will
result from the advance of the sum requested in this Drawdown
Notice.

     

    We
select the period of [       ] months as the
first Interest Period.

     

    Yours
faithfully

    

    

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

    For
and on behalf of

    IOLI OWNING COMPANY
LIMITED

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    IN WITNESS of which the
parties to this Agreement have executed this Agreement the day and year first
before written.

    

    
      	
              SIGNED
by

            	
              )

            
	
              duly
      authorised for and on behalf

            	
              )

            
	
              of
      IOLI OWNING COMPANY
      LIMITED

            	
              )

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              SIGNED
by

            	
              )

            
	
              duly
      authorised for and on behalf

            	
              )

            
	
              of
      DEUTSCHE
      SCHIFFSBANK

            	
              )

            
	
              AKTIENGESELLSCHAFT

            	
              )

            

    

    

    

     

    
      
         

      

      
        
          49

          SK 23113 0002 867882

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]