Document:

d895892_ex4-7.htm

     

    
      Private
& Confidential

    

     

    
 

    
      	 
      	
              DATED
      11 JUNE 2008

            	 
      

    

     

     

    
 

     

    
      	
              SUPPLEMENTAL
      AGREEMENT

            
	 
	
               relating to
      a

            
	 
	
               Revolving Credit Facility of
      originally $360,000,000 provided by

            
	 
	
               the
      banks and financial institutions listed in Schedule 1 Part
      (a)

            
	 
      
	 

    

    

    
      	
              BANK
      OF SCOTLAND plc

            	
              (1)

            
	 	 
	
              (formerly
      known as The Governor and Company of the Bank of Scotland)

            	 
      
	 	 
	 	 
	
              and

            	 
      
	 	 
	 	 
	 	 
	
              ARIES
      MARITIME TRANSPORT LIMITED

            	
              (2)

            

    

    

    
      
        
          NORTON
ROSE

        

         

      

      
         

        
          

        

      

      
         

      

    

    Contents

    

     

                                                                                                                                           

     

    
      	Clause	 	 Page
	 	 	 
	
              1

            	
              Definitions 

            	
              2

            

    

     

    
      	
              2

            	
              Agreement
      of Agent 

            	
              3

            

    

     

    
      	
              3

            	
              Amendments
      to Principal Agreement 

            	
              4

            

    

     

    
      	
              4

            	
              Representations
      and warranties 

            	
              6

            

    

     

    
      	
              5

            	
              Conditions 

            	
              8

            

    

     

    
      	
              6

            	
              Security
      Documents 

            	
              9

            

    

     

    
      	
              7

            	
              Fees
      and expenses 

            	
              10

            

    

     

    
      	
              8

            	
              Miscellaneous
      and notices 

            	
              10

            

    

     

    
      	
              9

            	
              Applicable
      Law 

            	
              11

            

    

     

    
      	Schedule
      1	 	
               12

            

    

     

    
      	Part
      (a) The Banks	 	
               12

            

    

     

    
      	Part
      (b) The Co-Arrangers	 	
               14

            

    

     

    
      	Part
      (c) The Swap Banks	 	
               15

            

    

     

    
      	Schedule
      2 Form of Supplemental Letter	 	
               16

            

    

     

    
      	Schedule
      3	 	
               18

            

    

     

    
      	Form
      of Mortgage Addendum	 	
               18

            

    

     

      

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    THIS SUPPLEMENTAL AGREEMENT is
dated 11 June 2008, and made BETWEEN:

     

    
      	
              (1)  

            	
              ARIES MARITIME TRANSPORT
      LIMITED, a company incorporated in Bermuda with its registered
      office at Canon’s Court, 22 Victoria Street, Hamilton, Bermuda HM EX (the
      “Borrower”);

            

    

     

    
      	
              (2)  

            	
              BANK OF SCOTLAND plc
      (formerly The Governor and Company of the Bank of Scotland) acting
      for the purposes of this Agreement through its office at Marine Finance,
      2nd Floor Pentland House, 8 Lochside Avenue, Edinburgh, Scotland EH12 9DJ
      (the “Agent”) in
      its capacity as Agent, security agent and trustee for the Finance
      Parties.

            

    

     

    WHEREAS:

     

    
      	
              (A)  

            	
              this
      Agreement is supplemental to a facility agreement dated 3 April 2006 (the
      “Original Agreement”)
      and made between (1) the Borrower (2) the banks and financial
      institutions as set out in Schedule 1 part (a) of this Agreement and
      Schedule 1 part 1 of the Principal Agreement (the “Banks”), (3) Bank of
      Scotland plc and Nordea Bank Finland plc as joint lead arrangers (the
      “Arrangers”) (4)
      the banks and financial institutions as set out in Schedule 1 part (b) of
      this Agreement and Schedule 1 part 3 to the Principal Agreement in their
      capacity as co-arrangers (the “Co-Arrangers”), (5) the
      banks and financial institutions as set out in Schedule 1 part (c) of this
      Agreement and Schedule 1 part 2 to the Principal Agreement in their
      capacity as swap banks (the “Swap Banks”) and (6)
      the Agent (and together with the Banks, the Arrangers, the Co-Arrangers
      and the Swap Banks, the “Finance Parties” and
      each a “Finance Party”)
      as agent, security agent and trustee on behalf of the Finance
      Parties, pursuant to which the Banks agreed to make available to the
      Borrower upon the terms and conditions therein the aggregate sum of up to
      three hundred and sixty million Dollars ($360,000,000) (the “Loan”) as supplemented
      and amended by a first supplemental agreement dated 24 August 2006 (the
      “First Supplemental
      Agreement”), a second supplemental agreement dated 23 January 2007
      (the “Second Supplemental
      Agreement”), a third supplemental agreement dated 2 March 2007 (the
      “Third Supplemental
      Agreement”), a fourth supplemental agreement dated 1 August 2007
      (the “Fourth Supplemental
      Agreement”) and a side letter dated 3 August 2007 (the “Side Letter”) each made
      between the Borrower and the Agent (acting as Agent, security agent and
      trustee for the Finance Parties) (the Original Agreement as supplemented
      and amended by the First Supplemental Agreement, the Second Supplemental
      Agreement, the Third Supplemental Agreement, the Fourth Supplemental
      Agreement and the Side Letter, the “Principal
      Agreement”);

            

    

     

    
      	
              (B)  

            	
              the
      Borrower has requested that:

            

    

     

    
      	 	
              (i)  

            	
              there
      be a further relaxation of the interest coverage ratio set out at clause
      8.7.4 of the Principal Agreement (as previously amended pursuant to the
      Third Supplemental Agreement and the Side Letter dated 3 August 2007);
      and

            

    

     

    
      	 	
              (ii)  

            	
              the
      Agent confirms its approval to the execution
by:

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	 	
              (a)  

            	
              Olympic
      Galaxy Shipping Ltd. of a Memorandum of Agreement dated 8 March 2008
      pursuant to which it has agreed to sell its Marshall Islands flag vessel
      m.v. “ENERGY 1” to Blunt Capital Corp.;
and

            

    

     

    
      	 	
              (b)  

            	
              Dynamic
      Maritime Company of a Memorandum of Agreement dated 8 March 2008 pursuant
      to which it has agreed to sell its Marshall Islands flag vessel m.v. “MSC
      OSLO” to Tal Overseas S.A.; and

            

    

     

    
      	 	
              (iii)  

            	
              the
      Agent consents to the sale by Vintage Marine S.A. of its Marshall Islands
      flag vessel m.t. “ARIUS” to T. Klaveness Shipping A.S. or a company to be
      nominated by T. Klaveness Shipping
A.S.

            

    

     

    and this
Agreement sets out the terms and conditions upon which the Agent (in its
capacity as Agent, security agent and trustee for the Finance Parties) shall, at
the request of the Borrower, agree to such revision and approve and consent or
(as the context may require) confirm its approval and consent to the sale of the
Relevant Ships by the Relevant Owners.

     

    NOW IT IS HEREBY AGREED as
follows:

     

    
      	
              1  

            	
              Definitions

            

    

     

    
      	
              1.1  

            	
              Defined
      expressions

            

    

     

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

     

    
      	
              1.2  

            	
              Definitions

            

    

     

    In this
Agreement, unless the context otherwise requires:

     

    “Effective Date” means the
date on which the Agent notifies the Borrower in writing that the Agent has
received the documents and evidence specified in clause 5 in a form and
substance satisfactory to it;

     

    “Mortgage Addendum” means the
addendum executed or (as the context may require) to be executed by each Owner
in favour of the Agent in the form set out in schedule 3 (being supplemental to
each first preferred Marshall Islands mortgage) executed by each relevant Owner
in favour of the Agent over its Ship (collectively the “Mortgage
Addenda”);

     

    “Relevant Documents” means
this Agreement, the Mortgage Addenda and the Supplemental Letters;

     

    “Relevant Owners” means
Olympic Galaxy Shipping Ltd., Dynamic Maritime Company Ltd. and Vintage Marine
S.A. or where the context so requires or permits, means any or all of
them;

     

    “Relevant Parties” means the
Borrower, each Owner, any Manager and any other Security Party or where the
context so requires or permits, means any or all of them; and

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Relevant Ships” means m.v.
“ENERGY 1”, m.v. “MSC OSLO” and m.t. “ARIUS” or where the context so requires or
permits, means any or all of them;

     

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

     

    
      	
              1.3  

            	
              Principal
      Agreement

            

    

     

    References
in the Original Agreement to “this Agreement” shall, with effect from the
Effective Date and unless the context otherwise requires, be references to the
Original Agreement as supplemented and amended by the First Supplemental
Agreement, the Second Supplemental Agreement, the Third Supplemental Agreement,
the Fourth Supplemental Agreement, the Side Letter and this Agreement and words
such as “herein”, “hereof’, “hereunder”, “hereafter”, “hereby” and “hereto”,
where they appear in the Original Agreement, shall be construed
accordingly.

     

    
      	
              1.4  

            	
              Headings

            

    

     

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

     

    
      	
              1.5  

            	
              Construction
      of certain terms

            

    

     

    Clause
1.4 of the Original Agreement shall apply to this agreement (mutatis mutandis)
as if set out herein and as if references therein to “this Agreement” were
references to this Agreement.

     

    
      	
              2  

            	
              Agreement
      of Agent

            

    

     

    
      	
              2.1  

            	
              Agreement

            

    

     

    The
Agent, relying upon the representations and warranties on the part of the
Borrower contained in clause 4 and the other terms and conditions of this
Agreement and subject to the amendment of the Principal Agreement as set out in
clause 3, hereby:

     

    
      	 	
              (a)  

            	
              agrees
      to a further relaxation of the interest coverage ratio set out at clause
      8.7.4 of the Principal Agreement (as previously amended pursuant to the
      Third Supplemental Agreement and the Side Letter);
  and

            

    

     

    
      	 	
              (b)  

            	
              confirms
      its approval to the execution by:

            

    

     

    
      	 	
              (i)  

            	
              Olympic
      Galaxy Shipping Ltd. of a Memorandum of Agreement dated 8 March 2008
      pursuant to which it has agreed to sell its Marshall Islands flag vessel
      m.v. “ENERGY 1” to Blunt Capital Corp.;
and

            

    

     

    
      	 	
              (ii)  

            	
              Dynamic
      Maritime Company Ltd. of a Memorandum of Agreement dated 8 March 2008
      pursuant to which it has agreed to sell its Marshall Islands flag vessel
      m.v. “MSC OSLO” to Tal Overseas S.A.;
and

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	 	
              (c)  

            	
              consents
      to the sale by Vintage Marine S.A. of its Marshall Islands flag vessel
      m.t. “ARIUS” to T. Klaveness Shipping A.S. or a company to be nominated by
      T. Klaveness Shipping A.S.

            

    

     

    
      	
              3  

            	
              Amendments
      to Principal Agreement

            

    

     

    
      	
              3.1  

            	
              Amendments

            

    

     

    The
Principal Agreement shall, with effect on and from the Effective Date, be (and
it is hereby) amended in accordance with the following provisions (and the
Principal Agreement (as so amended) will continue to be binding upon the
Borrower and each of the Finance Parties, party thereto upon such terms as so
amended):

     

    
      	
              3.1.1  

            	
              The
      definition of “Margin” in clause 1.2 of the Principal Agreement shall be
      deleted and
      replaced with the following:

            

    

     

    “Margin” means subject to the
proviso hereto the margin listed in the following table which shall be adjusted,
to the extent that this may be necessary, on the basis of the most recent
Compliance Certificate with effect from the next following date upon which
interest is payable pursuant to clause 3.1. In the event of the Borrower failing
to provide a Compliance Certificate pursuant to clause 8.7.7 the margin shall be
1.75% per annum.

     

    
      	 	
              Corporate
      Leverage

               

            	
              Margin

               

            
	 	
              <
      50%

            	
              1.125%
      per annum

               

            
	 	
              > 50%
      but < 60%

            	
              1.250%
      per annum

               

            
	 	
              > 60% but
      < 65%

            	
              1.375%
      per annum

               

            
	 	
              >
      65%

            	
              1.500%
      per annum

               

            

    

    

    Where:

     

    “Corporate Leverage” means, at
any time in respect of the Borrower’s Group, the ratio of outstanding Total
Liabilities divided by the Total Assets, the latter adjusted by the Agent for
the difference between Fleet Market Value and Fleet Book Value

     

    Provided
always that for any period during which the Borrower fails to maintain a ratio
of EBITDA to interest payable on a trailing four (4) Financial Quarter basis of
not less than 3.00 to 1.00 (determined in accordance with the definitions set
out at clause 8.6 of the Principal Agreement) the Margin shall be 1.75% per
annum from the commencement of the Relevant Period (as defined in clause 8.6)
during which the Borrower failed to maintain the said ratio.

     

    
      	
              3.1.2  

            	
              the
      following definitions contained in clause 8.6 of the Principal Agreement
      shall be deleted and the following new definitions be deemed to be
      inserted in their place as of, and with effect from, 31 December
      2007:

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Current Assets” means, at any
time in respect of the Borrower’s Group, the amount of current assets of the
Borrower’s Group on a consolidated basis which would be included as current
assets in a consolidated balance sheet of the Borrower’s Group in accordance
with GAAP drawn up at such time together with such amount of Cash and Cash
Equivalent Investments forming part of the Minimum Liquidity and/or the
Retention Amount (but always excluding any current assets arising from
Derivative Financial Instruments) which may be disregarded from the current
assets in a consolidated balance sheet of the Borrower’s Group but excluding the
value of any Ship(s) which the Borrower’s Group has committed to sell in
accordance with any valid and effective sale and purchase
agreement(s);

     

    “Current Liabilities” means,
at any time in respect of the Borrower’s Group, the amount of current
liabilities of the Borrower’s Group on a consolidated basis which would be
included as current liabilities in the consolidated balance sheet of the
Borrower’s Group in accordance with GAAP drawn up at such time excluding
Deferred Revenue and Loan Prepayment and all current liabilities arising from
Derivative Financial Instruments;

     

    and the
following new definition shall be deemed to be added as of, and with effect
from, 31 December 2007:

     

    “Loan Prepayment” means any
voluntary and/or mandatory prepayment of any part of the Loan resulting from the
sale of any of the Ships;

     

    
      	
              3.1.3  

            	
              clause
      8.7.4 of the Principal Agreement shall be deleted and the following new
      clause
      inserted in its place:

            

    

     

    8.7.4
Interest
Coverage

     

    subject
to the proviso hereto maintain a ratio of EBITDA to Interest Payable on a
trailing four (4) Financial Quarter basis of not less than 3.00 to 1.00 provided
that with respect to the interest coverage calculations to be made on the
Financial Quarter Days:

     

    
      	 	
              (a)  

            	
              ending
      on 31 December 2007, 31 March 2008 and 30 June 2008 the aforesaid ratio
      shall be not less than 2.25 to 1.00;
and

            

    

     

    
      	 	
              (b)  

            	
              ending
      on 30 September 2008 the aforesaid ratio shall be not less than 2.75 to
      1.00.

            

    

     

    For the
avoidance of doubt the aforesaid ratio shall revert to not less than 3.00 to
1.00 by the Financial Quarter Day ending on 31 December 2008 and shall remain at
not less than 3.00 to 1.00 for the rest of the Security Period.

     

    
      	
              3.1.4  

            	
              The
      Commitment shall as from 3 April 2008 be reduced from three hundred and
      sixty
      million Dollars ($360,000,000) to two hundred and ninety million Dollars
      ($290,000,000).

            

    

     

    
      	
              3.1.5  

            	
              The
      Borrower shall in no circumstances whatsoever declare or pay any dividends
      or distribute any of its present or future assets, undertakings, rights or
      revenues to any of its shareholders for the Financial Quarter (as defined
      in clause 8.6 of the Principal Agreement) ended on 31 December
      2007.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              3.1.6  

            	
              From
      the date of this Agreement until 31 December 2008 any and all requests by
      the Borrower made pursuant to sub-clauses 8.3.5, 8.3.7 and 8.3.8 of the
      Principal Agreement as supplemented and amended by this Agreement shall be
      subject to the unanimous approval of all the
  Banks.

            

    

     

    
      	
              3.2  

            	
              Sale
      of Ships

            

    

     

    
      	
              3.2.1  

            	
              In
      consideration of the Agent’s agreement contained in clause 2.1 the
      Borrower has agreed with the Agent that on or before 30 June 2008 (for the
      purposes of this clause 3.2.1 the “Prepayment Period”) the
      Borrower shall make a prepayment of the Loan so that the Loan shall be
      reduced from two hundred and eighty four million eight hundred thousand
      Dollars ($284,800,000) to two hundred million Dollars ($200,000,000). The
      reduction of the Loan shall be achieved by the Borrower procuring the sale
      of the Relevant Ships and other Ships by the Relevant Owners and other
      Owners and the application of the entire sale proceeds of the Relevant
      Ships and other Ships in prepayment of the Loan. In the event that any
      such sale of a Relevant Ship or other Ship is not completed by the expiry
      of the Prepayment Period the Agent may, in its sole and absolute
      discretion and to the extent that the Agent is satisfied that the Relevant
      Ship or other Ship is subject to a legally binding Memorandum of Agreement
      in a form and substance acceptable to the Agent, extend the Prepayment
      Period by up to three (3) months.

            

    

     

    
      	
              3.2.2  

            	
              For
      the avoidance of doubt and not withstanding the provisions of clause 3.2.1
      the Borrower shall procure and ensure
that:

            

    

     

    
      	 	
              (a)  

            	
              under
      no circumstances shall any Owner bind itself in any way to sell its Ship
      and/or enter into any agreement for the sale of its Ship without the prior
      written consent of the Arrangers;
and

            

    

     

    
      	 	
              (b)  

            	
              the
      entire sale proceeds of each of the Relevant Ships and any other Ships to
      be sold by an Owner in order to satisfy the provisions of clause 3.2.1
      shall be applied in full in prepayment of the
  Loan.

            

    

     

    
      	
              3.3  

            	
              Continued
      force and effect

            

    

     

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

     

    
      	
              4  

            	
              Representations
      and warranties

            

    

     

    
      	
              4.1  

            	
              Primary
      representations and warranties

            

    

     

    The
Borrower represents and warrants to the Agent and the other Finance Parties
that:

     

    
      	
              4.1.1  

            	
              Existing
      representations and warranties

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    the
representations and warranties set out in clause 7 of the Principal Agreement
were true and correct on the date of the Principal Agreement and are true and
correct, including to the extent that they may have been or shall be amended by
this Agreement, as if made at the date of this Agreement with reference to the
facts and circumstances existing at such date (and so that the representation
and warranty set out in clause 7.1.9 of the Principal Agreement shall refer to
the latest audited financial statements delivered under clause 8.1.5 of the
Principal Agreement;

     

    
      	
              4.1.2  

            	
              Corporate
      power

            

    

     

    each of
the Relevant Parties has power to execute, deliver and perform its obligations
under the Relevant Documents to which it is or is to be a party; all necessary
corporate, shareholder and other action has been taken by each of the Relevant
Parties to authorise the execution, delivery and performance of the Relevant
Documents to which it is or is to be a party;

     

    
      	
              4.1.3  

            	
              Binding
      obligations

            

    

     

    the
Relevant Documents to which it is or is to be a party constitute valid and
legally binding obligations of each of the Relevant Parties enforceable in
accordance with their terms;

     

    
      	
              4.1.4  

            	
              No
      conflict with other obligations

            

    

     

    the
execution, delivery and performance of the Relevant Documents to which it is or
is to be a party by each of the Relevant Parties will not (i) contravene any
existing law, statute, rule or regulation or any judgment, decree or permit to
which any of the Relevant Parties is subject, (ii) conflict with, or result in
any breach of any of the terms of, or constitute a default under, any agreement
or other instrument to which any of the Relevant Parties is a party or is
subject or by which it or any of its property is bound or (iii) contravene or
conflict with any provision of their respective documents of incorporation or
other constitutional documents of any of the Relevant Parties or (iv) result in
the creation or imposition of or oblige any of the Relevant Parties to create
any Encumbrance (other than a Permitted Encumbrance) on any of the undertaking,
assets, rights or revenues of any of the Relevant Parties;

     

    
      	
              4.1.5  

            	
              No
      filings required

            

    

     

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

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
              4.1.6  

            	
              Choice
      of law

            

    

     

    the
choice of English law to govern the Relevant Documents (other than the Mortgage
Addenda) and the choice of the laws of the Marshall Islands to govern the
Mortgage Addenda and the submissions by the Relevant Parties to the
non-exclusive jurisdiction of the English courts are valid and binding;
and

     

    
      	
              4.1.7  

            	
              Consents
      obtained

            

    

     

    every
consent, authorisation, licence or approval of, or registration or declaration
to, governmental or public bodies or authorities or courts required by any of
the Relevant Parties in connection with the execution, delivery, validity,
enforceability or admissibility in evidence of the Relevant Documents to which
it is or will become a party or the performance by any of the Relevant Parties
of their respective obligations under such documents has been obtained or made
and is in full force and effect and there has been no default in the observance
of any conditions or restrictions (if any) imposed in, or in connection with,
any of the same.

     

    
      	
              4.2  

            	
              Repetition
      of representations and warranties

            

    

     

    Each of
the representations and warranties contained in this Agreement and clause 7 of
the Principal Agreement shall be deemed to be repeated by the Borrower on the
Effective Date as if made with reference to the facts and circumstances existing
on such day.

     

    
      	
              5  

            	
              Conditions

            

    

     

    
      	
              5.1  

            	
              Documents
      and evidence

            

    

     

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

     

    
      	
              5.1.1  

            	
              the
      Supplemental Letters duly executed;

            

    

     

    
      	
              5.1.2  

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

            

    

     

    
      	
              5.1.3  

            	
              evidence
      that the Borrower has properly and validly executed this Agreement and
      that the provisions of this Agreement are binding upon
  it;

            

    

     

    
      	
              5.1.4  

            	
              evidence
      that each Security Party has properly and validly executed a Supplemental
      Letter in relation to those Security Documents to which it is a party and
      that the provisions of the relevant Supplemental Letter are binding upon
      it;

            

    

     

    
      	
              5.1.5  

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

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
              5.1.6  

            	
              evidence
      that the Borrower, each Owner and the Manager are in good standing under
      the
      laws of their respective places of
  incorporation;

            

    

     

    
      	
              5.1.7  

            	
              evidence
      that the Mortgage Addenda have been properly and validly executed and
      registered against each of the Ships through the Maritime and Corporate
      Administrator of the Republic of the Marshall
  Islands;

            

    

     

    
      	
              5.1.8  

            	
              legal
      opinions in relation to the laws of the Marshall Islands and the laws of
      Bermuda each in favour of the Agent confirming (inter alia) the due
      execution of each of the Relevant
Documents;

            

    

     

    
      	
              5.1.9  

            	
              the
      Memorandum of Agreement relating to each of the Relevant
      Ships;

            

    

     

    
      	
              5.1.10  

            	
              evidence
      that each Relevant Owner and each buyer party to a Memorandum of Agreement
      referred to at clause 5.1.9 have properly and validly executed the said
      Memorandum of Agreement and that the said Memorandum of Agreement is
      binding upon each of them; and

            

    

     

    
      	
              5.1.11  

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

            

    

     

    
      	
              5.2  

            	
              General
      conditions precedent

            

    

     

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

     

    
      	
              5.2.1  

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

            

    

     

    
      	
              5.2.2  

            	
              no
      Default having occurred and continuing at the time of the Effective
      Date.

            

    

     

    
      	
              5.3  

            	
              Waiver
      of conditions precedent

            

    

     

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

     

    
      	
              6  

            	
              Security
      Documents

            

    

     

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

     

    
      	
              6.1.1  

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

            

    

     

    
      	
              6.1.2  

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

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
              7  

            	
              Fees
      and expenses

            

    

     

    
      	
              7.1  

            	
              Fee

            

    

     

    The
Borrower agrees to pay to the Agent, on the date of this Agreement, an amendment
fee of three hundred and sixty two thousand five hundred Dollars ($362,500) to
be distributed between the Banks in the same manner as commitment
commission;

     

    
      	
              7.2  

            	
              Expenses

            

    

     

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

     

    
      	
              7.2.1  

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

            

    

     

    
      	
              7.2.2  

            	
              in
      contemplation of, or otherwise in connection with, the enforcement of, or
      preservation
      of any rights under this Agreement or the other Relevant Documents or
      otherwise in respect of the monies owing and obligations incurred under
      this Agreement and the other Relevant
Documents,

            

    

     

    together
with interest at the rate referred to in clause 3.4 of the Principal Agreement
from the date on which such expenses were incurred to the date of payment (as
well after as before judgment).

     

    
      	
              7.3  

            	
              Value
      Added Tax

            

    

     

    All fees
and expenses payable pursuant to this clause 7 shall be paid together with value
added tax or any similar tax (if any) properly chargeable thereon.

     

    
      	
              7.4  

            	
              Stamp
      and other duties

            

    

     

    The
Borrower agrees to pay to the Agent on demand all stamp, documentary,
registration or other like duties or taxes (including any duties or taxes
payable by the Agent) imposed on or in connection with this Agreement and the
other Relevant Documents and shall indemnify the Agent against any liability
arising by reason of any delay or omission by the Borrower to pay such duties or
taxes.

     

    
      	
              8  

            	
              Miscellaneous
      and notices

            

    

     

    
      	
              8.1  

            	
              Notices

            

    

     

    The
provisions of clause 17.1 of the Principal Agreement shall extend and apply to
the giving or making of notices or demands hereunder as if the same were
expressly stated herein.

     

    
    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      
        	
                8.2  

              	
                Counterparts

              

      

       

    

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

     

    
      	
              9  

            	
              Applicable
      law

            

    

     

    
      	
              9.1  

            	
              Law

            

    

     

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

     

    
      	
              9.2  

            	
              Submission
      to jurisdiction

            

    

     

    The
Borrower agrees, for the benefit of the Agent, that any legal action or
proceedings arising out of or in connection with this Agreement against the
Borrower or any of its assets may be brought in the English courts. The Borrower
irrevocably and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Seabreeze (UK) Limited at present
of Hampton House, 20 Albert Embankment, London SE1 7TJ, England to receive for
it and on its behalf, service of process issued out of the English courts in any
such legal action or proceedings. The submission to such jurisdiction shall not
(and shall not be construed so as to) limit the right of the Agent and/or the
other Finance Parties to take proceedings against the Borrower in the courts of
any other competent jurisdiction nor shall the taking of proceedings in any one
or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.

     

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

     

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

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Schedule
1

     

    Part
(a)

     

    The
Banks

     

    

    
      	
               

              Name

               

            	
               

              Address
      and fax

               

            
	
              Bank
      of Scotland plc

            	
              2nd
      Floor, Pentland House 

              8
      Lochside Avenue

              Edinburgh
      EH12 9DJ

              Scotland

              Fax:
      +44 131 659 0387

            
	 
      	 
      
	
              Nordea
      Bank Finland plc, London Branch

            	
              8th
      Floor

              City
      Place House

              55
      Basinghall Street London 

              EC2V
      5HB England

              Fax:
      +44 207 726 9188

            
	 
      	 
      
	
              HSH
      Nordbank AG

            	
              HSH
      Nordbank AG

              Gerhart
      - Hauptmann-Platz 50 

              20095
      Hamburg

              Germany

              Fax:
      +49 40 3333 34118

            
	 
      	 
      
	
              The
      Governor and Company of the Bank of Ireland

            	
              Lower
      Baggot Street Dublin 2

              Ireland

              Fax:
      +353 1 611 5411   

              Att:John
      Hartigan

            
	 
      	 
      
	
              Sumitomo
      Mitsui Banking Corporation, Brussels Branch

            	
              Avenue
      des Arts 58

              Box
      18

              1000
      Brussels, Belgium

              Fax:
      +44 (0)207 786 1569

              Att:
      European Loan Operations Email:lesley_kelly@gb.smbcgroup.com,
      

              ainsley_bastick@gb.smbcgroup.com

              with
      copy to

              Fax:
      +32 2 5131601

            

    

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      	
               

              Name

               

            	
               

              Address
      and fax

            
	 
      	
              Att:
      Jean-Luc Renard

              Email:
      jean-luc_renard@be.smbcgroup.com

            
	 
      	 
      
	
              Bayerische
      Hypo- and Vereinsbank AG

            	
              Kardinal-Faulhaber-Str.1

              80311
      Miinchen acting through its office at Alter Wall 22

              20457
      Hamburg

              Germany

              Fax:
      +49 40 3692 3696

            
	 
      	 
      
	
              Commerzbank
      Aktiengesellschaft

            	
              Hamburg
      Branch 

              Ness
      7-9,

              D-20457
      Hamburg 

              Germany

              Fax:            +49
      (0)40 3683 2049

              Att:            Bjorn
      Brandmahl

              Email:        bjoern.brandmaehl@commerzbank.com

            
	 
      	 
      
	
              General
      Electric Capital Corporation

            	
              c/o
      GE Transportation Finance 

              201
      High Ridge Road

              Stamford,
      Connecticut
      06927

              USA

              Fax:
      +1 203 585 0597

            
	 
      	 
      
	
              Natixis
      (formerly known as Natexis Banques Populaires)

            	
              68/67
      Quai de la Rapee 75012 Paris

              France

              Fax:
      +33 1 58 19 36 72/ 60

              Att:
      Amelie Zucchi and Didier Berger

              Email: amelie.zucchi@natixis.fr / didier.berger@natixis.fr

            
	 
      	 
      
	
              Swedbank
      AB (Publ)

            	
              Brunkebergstorg
      8

              Swedbank
      Shipping E421 

              SE-105
      34 Stockholm 

              Sweden

              Fax:      +46
      8 723 7150

              Att:     Dagobert
      Billsten and/or Karin Nilsson

              Email: dagobert.billsten@swedbank.se

              /
      karin.nilsson@swedbank.se

            
	 
      	 
      

    

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Part
(b)

     

    The
Co-Arrangers

     

    
      	
               

              Name

               

            	
               

              Address
      and fax

            
	
              The
      Governor and Company of the

              Bank
      of Ireland

            	
              Lower
      Baggot Street

              Dublin
      2

              Ireland

               

              Fax:
      +353 1 604 4796

              Att:
      Ann Marie Dodd

              Email:
      annmarie.dodd@boimail.com

            
	 
      	 
      
	
              HSH
      Nordbank AG

            	
              HSH
      Nordbank AG

              Gerhart
      - Hauptmann-Platz 50

              20095
      Hamburg

              Germany

               

              Fax:
      +49 40 3333 34118

            
	 
      	 
      
	
              Sumitomo
      Mitsui Banking

              Corporation,
      Brussels Branch

            	
              Avenue
      des Arts 58

              Box
      18

              1000
      Brussels, Belgium

               

              Fax:
      +44 (0)207 786 1569

              Att:
      European Loan Operations

              Email:
      lesley_kelly@gb.smbcgroup.com,

              ainsley_bastick@gb.smbcgroup.com

               

              with
      copy to

              Fax:
      +32 2 5131601

              Att:
      Jean-Luc Renard

              Emailjean-luc_renard@
      be.smbcgroup.com

            
	 
      	 
      

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Part
(c)

     

    The
Swap Banks

     

    
      	
               

              Name

               

            	
               

              Address
      and fax

            
	
              Bank
      of Scotland plc

            	
              2nd
      Floor, Pentland House

              8
      Lochside Avenue

              Edinburgh
      EH12 9DJ

              Scotland

               

              Fax:
      +44 131 659 0387

            
	 
      	 
      
	
              HBOS
      Treasury Services plc

            	
              33
      Old Broad Street

              London

              EC2N
      1HZ

              England

               

              Fax:
      +44 20 7574 8133

            
	 
      	 
      
	
              Nordea
      Bank Finland plc, London Branch

            	
              8th
      Floor

              City
      Place House

              55
      Basinghall Street

              London
      EC2V 5HB

              England

               

              Fax:
      +44 207 726 9188

            
	 
      	 
      
	
              The
      Governor and Company of the Bank of Ireland

            	
              Lower
      Baggot Street

              Dublin
      2

              Ireland

               

              Fax:
      +353 1 604 4796

              Att:
      Ann Marie Dodd

              Email:
      annmarie.dodd@boimail.com

            
	 
      	 
      
	
              HSH
      Nordbank AG

            	
              HSH
      Nordbank AG

              Gerhart
      - Hauptmann-Platz 50

              20095
      Hamburg

              Germany

               

              Fax:
      +49 40 3333 34118

            
	 
      	 
      
	
              SMBC
      Capital Markets, Inc.

            	
              277
      Park Avenue, 5th Floor

              New
      York, NY
      10172

              USA

               

              Fax
      : +1 212 224 4948

            
	 
      	 
      

    

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    Schedule
2

     

    Form
of Supplemental Letter

     

    
      	
              To:

            	
              Bank
      of Scotland plc

            

    

    
      	
               
      

            	
              Marine
      Finance

            

    

    
      	
               
      

            	
              2nd
      Floor

            

    

    
      	
               
      

            	
              Pentland
      House

            

    

    
      	
               
      

            	
              8
      Lochside Avenue

            

    

    
      	
               
      

            	
              Edinburgh
      EH12 9DJ

            

    

    2008

     

    Dear
Sirs,

     

    Facility
Agreement dated 3 April 2006 and made between Aries Maritime Transport Limited
and Bank of Scotland plc relating to a Revolving Credit Facility of up to
US$360,000,000 as supplemented and amended from time to time (the “Principal
Agreement”)

     

    We refer
to the supplemental agreement dated [•] 2008 (the “Supplemental Agreement”) made
between (1) Aries Maritime Transport Limited (the “Borrower”) and (2) Bank of
Scotland plc (the “Agent”
acting as security agent and trustee for the Finance Parties) pursuant to
which the terms of the Principal Agreement were supplemented and amended, a copy
of which Supplemental Agreement is attached to this letter.

     

    Words and
expressions defined in the Supplemental Agreement shall, unless otherwise
defined herein, have the same meaning when used in this letter.

     

    We hereby
confirm that we have reviewed the terms of the Supplemental Agreement and
consent to the amendments to the Principal Agreement contained in the
Supplemental Agreement and agree that:

     

    
      	
               
      

            	
              (a)

            	
              the
      Security Documents (as defined in the Loan Agreement) to which we are a
      party, and our obligations thereunder, shall remain and continue in full
      force and effect notwithstanding the said amendments to the Principal
      Agreement contained in the Supplemental Agreement and/or the sale of any
      of the Relevant Ships or any other Ships as envisaged in clause 3.2.1 of
      the Supplemental Agreement; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              with
      effect from the date upon which the conditions set out in clause 5 of the
      Supplemental Agreement have been satisfied, references in the Security
      Documents to which we are a party to “the Agreement” or “the Facility
      Agreement” shall henceforth be references to the Principal Agreement as
      amended and supplemented by the Supplemental Agreement and as from time to
      time hereafter amended and shall also be deemed to include the
      Supplemental Agreement, any applicable Mortgage Addendum and the
      obligations of the Borrower
thereunder.

            

    

     

    Without
prejudice to the generality of the foregoing we confirm that we are fully aware
of the Borrower’s obligation to reduce the Loan in accordance with the
provisions of clause 3.2.1 of the Supplemental Agreement and of the fact that
certain of the Ships will need to be sold and we hereby consent and agree to any
such sale(s).

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    This
letter is executed as a Deed and is governed by and shall be construed in
accordance with English law.

     

    
      	
              SIGNED, SEALED and
      DELIVERED as a DEED

            	
              )

            	 
      
	
              by

            	
              )

            	 
      
	
              for
      and on behalf of

            	
              )

            	 
      
	
              [ALL
      OTHER SECURITY PARTIES]

            	
              )

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

            
	
              pursuant
      to board resolutions

            	
              )

            	
              Attorney-in-fact

            
	
              dated                        
      2008

            	
              )

            	 
      
	
              in
      the presence of:

            	
              )

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

              Witness

              Name:

              Address:

              Occupation:

            	 
      	 
      

    

    

    

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    Schedule
3

     

    Form
of Mortgage Addendum

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    ADDENDUM
TO

     

    FIRST
PREFERRED SHIP MORTGAGE

     

    <VESSEL
NAME>

     

    THIS ADDENDUM dated
May      , 2008
to First Preferred Ship Mortgage dated <Mortgage
Date>

     

    BETWEEN:

     

    
      	
              (1)

            	
              <OWNER NAME>, a
      company duly existing in accordance with the laws of the Marshall Islands
      having its registered office at Trust Company Complex, Ajeltake Road,
      Ajeltake Island, Majuro, Marshall Islands (the “Owner”);

            
	 	 
	 AND:	 
	 	 

    

     

    
      	 (2)    	
              BANK
      OF SCOTLAND plc (formerly The Governor and Company of the Bank of
      Scotland), acting for the purposes of this Addendum through its office at
      Marine Finance, 2nd Floor Pentland House, 8 Lochside Avenue, Edinburgh,
      Scotland, EH12 9DJ (the "Mortgagee") as security agent and trustee for the
      benefit of itself and each of the other Finance Parties (as defined in the
      Mortgage defined below.

            

    

     

    
    

    
      WHEREAS:

    

     

    
      	
              (A)

            	
              The
      Owner granted a First Preferred Ship Mortgage dated <Mortgage Date>
      on its Marshall Islands flag vessel, <VESSEL NAME>,
      Official Number <Official Number>, which was recorded on
      <Date Recorded> with the Maritime Administrator of the Marshall
      Islands in Book PM <Book>, Page <Page>, at <Time with am
      pm>, <Time Zone>. (the “Mortgage,” unless
      otherwise defined herein, capitalized terms used herein shall have the
      meanings ascribed to them in the
Mortgage).

            

    

     

    
      	
              (B)

            	
              The
      Borrower, the Mortgagee (acting as Agent, security agent and trustee for
      the Finance Parties) and others entered into a Facility Agreement on April
      3, 2006, which was supplemented and amended by a first supplemental
      agreement dated 24 August 2006 in the form annexed hereto as Schedule 4
      (the “First Supplemental
      Agreement”), a second supplemental agreement dated 23 January 2007
      in the form annexed hereto as Schedule 5 (the “Second Supplemental
      Agreement”), a third supplemental agreement dated 2 March 2007 in
      the form (excluding schedules) annexed hereto as Schedule 6 (the “Third Supplemental
      Agreement”), a fourth supplemental agreement dated 1 August 2007 in
      the form annexed hereto as Schedule 7 (the “Fourth Supplemental
      Agreement”), a side letter dated 3 August 2007 in the form annexed
      hereto as Schedule 8 (the “Side Letter”) and a
      fifth supplemental agreement dated the date hereof in the form annexed
      hereto as Schedule 9 (the “Fifth Supplemental Agreement”)
      each made between the Borrower and the Mortgagee (acting as Agent,
      security agent and trustee for the Finance
  Parties).

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    
      	
              (C)

            	
              It
      is a condition to the effectiveness of the Fifth Supplemental Agreement
      that the Owner grants this Addendum to the
  Mortgage.

            

    

     

    NOW,
IT IS HEREBY WITNESSED AND AGREED:

     

    
      	
              1.

            	
              AMENDMENTS TO
      MORTGAGE

            

    

     

    
      	
              1.1

            	
              The
      address of the Mortgagee is hereby amended to Marine Finance, 2nd Floor
      Pentland House, 8 Lochside Avenue, Edinburgh, Scotland EH12
      9DJ.

            

    

     

    
      	
              1.2

            	
              The
      term “Facility Agreement” wherever it appears in the Mortgage shall mean
      the Facility Agreement as amended and supplemented by the First
      Supplemental Agreement, the Second Supplemental Agreement, the Third
      Supplemental Agreement, the Fourth Supplemental Agreement, the Side Letter
      and the Fifth Supplemental
Agreement.

            

    

     

    
      	
              1.3

            	
              Each
      of Schedules 4 through 9 inclusive annexed hereto are added as Schedules 4
      through 9 to the Mortgage.

            

    

     

    
      	
              1.4

            	
              The
      term “Mortgage” and “this Mortgage” wherever they appear in the Mortgage,
      shall mean the Mortgage as amended by this
  Addendum.

            

    

     

    
      	
              1.5

            	
              With
      reference to Section 5.1.21 of the Mortgage, the text of the Notice of
      Mortgage set forth therein is hereby amended to read in its entirety as
      follows:

            

    

     

    “NOTICE
OF MORTGAGE

     

    This
Vessel is covered by a First Preferred Mortgage, as at any time amended, to
BANK OF SCOTLAND plc
whose address is Marine Finance, 2nd Floor Pentland House, 8 Lochside Avenue,
Edinburgh, Scotland EH12 9DJ (as security agent and trustee on behalf of the
syndicate of banks and financial institutions and other ancillary parties) under
authority of Chapter 3 of the Maritime Act 1990 of the Republic of the Marshall
Islands as amended. Under the terms of the said Mortgage neither the Owner nor
any charterer nor the Master of this Vessel nor any other person has any right,
power or authority to create, incur or permit to be imposed upon this Vessel any
lien whatsoever other than for crew’s wages and salvage”

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
              1.6

            	
              Except
      as amended herein, all terms and provisions of the Mortgage shall remain
      in full force and effect.

            

    

     

    
      	
              2.

            	
              RECORDING OF THIS
      ADDENDUM

            

    

     

    For the
purposes of recording this Addendum as required under Section 302 of the
Marshall Islands Maritime Act 1990 as amended, the maximum amount that may be
outstanding at any one time is three hundred ninety eight million Dollars
($398,000,000) (of which amount two hundred ninety million Dollars
($290,000,000) represents the Loan and one hundred and eight million Dollars
($108,000,000 represents the Master Swap Agreement Liabilities) and interest and
performance of mortgage covenants. The date of maturity with respect to the Loan
is April 3, 2011, and the maturity date with respect to the Master Swap
Agreement Liabilities is on demand. The discharge amount is the same as the
total amount, except that for property other than a “vessel”, if any should be
determined to be covered by this Mortgage, the discharge amount is zero point
zero one per centum (0.01 %) of the total amount.

     

    IN WITNESS whereof the Owner
and Mortgagee have caused this Addendum to be executed by their respective duly
authorised representatives on the date set forth above.

     

    
      	
              <OWNER
      NAME>

            	 
      	
              BANK
      OF SCOTLAND plc

            
	
              By                                                                                                              

            	 
      	
              By                                                                                                     

            
	
              Name:

            	 
      	
              Name:

            
	
              Title:

            	 
      	
              Title:

            

    

     

     

     

     

     

     

    ACKNOWLEDGEMENT
OF OWNER

     

     

     

    
      	
              STATE
      OF ___________

            	
              )

            
	 
      	
              )
      ss.:

            
	
              COUNTY
      OF _________

            	
              )

            
	 
      	 
      

    

     

     

    On the
_____ day of May, 2008, before me, the undersigned, personally appeared
__________________________________, personally known to me or proved to me on
the basis of satisfactory evidence, to be the individual(s) whose name(s) is
(are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s) or the person
upon behalf of which the individual(s) acted, executed this
instrument.

     

     

    
      	 
      	 
      
	 
      	
              Notary
      Public/Special Agent

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    ACKNOWLEDGEMENT
OF MORTGAGEE

     

    

    
      	
              STATE
      OF ___________

            	
              )

            
	 
      	
              )
      ss.:

            
	
              COUNTY
      OF _________

            	
              )

            
	 
      	 
      

    

    

    On the
_____ day of May, 2008, before me, the undersigned, personally appeared
_________________________________, personally known to me or proved to me on the
basis of satisfactory evidence, to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s) or the person
upon behalf of which the individual(s) acted, executed this instrument, and
further confirmed to me that the mortgagee originally named in the Mortgage,
The Governor and Company of the Bank of Scotland, is now known as Bank of
Scotland plc.

     

     

     

    
      	 
      	 
      
	 
      	
              Notary
      Public/Special Agent

            

    

     

    Schedule
4 — First Supplemental Agreement

    Schedule
5 — Second Supplemental Agreement

    Schedule
6 — Third Supplemental Agreement

    Schedule
7 — Fourth Supplemental Agreement

    Schedule
8 — Side Letter

    Schedule
9 — Fifth Supplemental Agreement

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    

    
      	
              SIGNED
by

            	
              )

            	 
      
	
              ARIES
      MARITIME TRANSPORT LIMITED

            	
              )

            	 
      
	
              by

            	
              )

            	 
      
	
              its
      duly authorised attorney-in-fact

            	
              )

            	 
      
	
              pursuant
      to a power of attorney

            	
              )

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

            
	
              dated
      5th May, 2008

            	
              )

            	
              Attorney-in-fact                        

            

    

    

     

    
      	
              SIGNED
by

            	
              )

            	 
      
	
              BANK
      OF SCOTLAND plc

            	
              )

            	 
      
	
              as
      agent, security agent and trustee on

            	
              )

            	 
      
	
              behalf
      of the Finance Parties

            	
              )

            	 
      
	
              by

            	
              )

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

            
	
              AUTHORIZED
      SIGNATORY

            	
              )

            	
              AUTHORIZED
      SIGNATORY

            
	 
      	 
      	 
      	 
      

    

    
    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    

      LETTER
AGREEMENT

       

      Aries
Maritime Transport Limited 

      c/o
Magnus Carriers Corporation 

      18 Zerva
Nap. Str.

      166 75
Glyfada

      GREECE

      Attn: Mr
Ioannis Makris - Chief Financial Officer

       

      FAX NO:
00 30210 898 3788

       

      20 June
2008

      Dear
Sirs,

       

      Revolving
Credit Facility of originally US$360,000,000 dated 3 April 2006 between Arles
Maritime Transport Limited and the Finance Parties (as supplemented and
amended)

       

      We refer
to the letter of Mons Bolin dated 10 June 2008 requesting the Bank’s approval
for a two month extension to the “Prepayment Period” (as defined in clause 3.2.1
of the supplemental agreement dated 11 June
2008 (the “Supplemental
Agreement”)
a copy of which is annexed to this letter).

       

      Following
consultation with the Banks, please be informed that consent was obtained to the
extension of the Prepayment Period until 31  August 2008 subject to
all other terms of the Supplemental Agreement (including without limitation the
other provisions of clause 3.2.1 of the Supplemental Agreement) remaining
unchanged and in full force and effect.

       

      For the
avoidance of doubt, clause 3.2.1 of the Supplemental Agreement shall now read as
follows:

       

      “In
consideration of the Agent’s agreement contained in clause 2.1 the Borrower has
agreed with the Agent that on or before 31 August 2008 (for the purposes of this
clause 3.2.1 the “Prepayment Period”) the Borrower shall make a prepayment of
the Loan so that the Loan shall be reduced from two hundred and eighty four
million eight hundred thousand Dollars ($284,800,000) to two hundred million
Dollars ($200,000,000). The reduction of the Loan shall be achieved by the
Borrower procuring the sale of the Relevant Ships and other Ships by the
Relevant Owners and other Owners and the application of the entire sale proceeds
of the Relevant Ships and other Ships in prepayment of the Loan. In the event
that any such sale of a Relevant Ship or other Ship is not completed by the
expiry of the Prepayment Period the Agent may, in its sole and absolute
discretion and to the extent that the Agent is satisfied that the Relevant Ship
or other Ship is subject to a legally binding Memorandum of Agreement in a form
and substance acceptable to the Agent, extend the Prepayment Period up until 30
September 2008.”

       

      Please
confirm your agreement to the provisions of this letter and in particular your
acceptance of the changes made to clause 3.2.1 of the Supplemental Agreement by
signing and returning a copy of this letter not later than 20 June
2008.

       

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

       

      This
letter shall be governed by and construed in accordance with the laws of
England. The provisions of clause 9 of the Supplemental Agreement shall be
deemed incorporated into and form part of this letter agreement.

       

      Yours
faithfully,

       

       

      /s/

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

      For and
on behalf of

      BANK
OF SCOTLAND plc

      (as
security agent and trustee for the Finance Parties)

       

      We agree
of this letter.

       

       

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

      For and on behalf
of

      ARIESITIME
TRANSPORT LIMITEDd892833_ex4-5.htm

    Exhibit
4.5

     

     

    
 

    Date 27
December 2007

    

    

    

    

    STAR
BULK CARRIERS CORP.

    as
Borrower

    

    

    —and
—

    

    

    THE
BANKS AND FINANCIAL INSTITUTIONS

    listed in
Schedule 1

    as
Lenders

    

    

    —and
—

    

    

    COMMERZBANK
AG

    as Agent
and as Security Trustee

    

    

    

    

    

    

    

    

    __________________________

    

    LOAN
AGREEMENT

    __________________________

    

    relating
to a term loan facility of up to US$120,000,000

    to
finance part of the purchase price of five Supramax bulk carriers

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    WATSON
FARLEY & WILLIAMS

    Piraeus

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INDEX

     

    Clause Page

     

    

    
      	
              1

            	
              INTERPRETATION

            	
              1

            
	
              2

            	
              FACILITY

            	
              19

            
	
              3

            	
              POSITION
      OF THE LENDERS AND THE MAJORITY LENDERS

            	
              19

            
	
              4

            	
              DRAWDOWN

            	
              20

            
	
              5

            	
              INTEREST

            	
              22

            
	
              6

            	
              INTEREST
      PERIODS

            	
              24

            
	
              7

            	
              DEFAULT
      INTEREST

            	
              25

            
	
              8

            	
              REPAYMENT
      AND PREPAYMENT

            	
              26

            
	
              9

            	
              CONDITIONS
      PRECEDENT

            	
              28

            
	
              10

            	
              REPRESENTATIONS
      AND WARRANTIES

            	
              29

            
	
              11

            	
              GENERAL
      UNDERTAKINGS

            	
              31

            
	
              12

            	
              CORPORATE
      UNDERTAKINGS

            	
              35

            
	
              13

            	
              INSURANCE

            	
              36

            
	
              14

            	
              SHIP
      COVENANTS

            	
              42

            
	
              15

            	
              SECURITY
      COVER

            	
              46

            
	
              16

            	
              PAYMENTS
      AND CALCULATIONS

            	
              48

            
	
              17

            	
              APPLICATION
      OF RECEIPTS

            	
              50

            
	
              18

            	
              APPLICATION
      OF EARNINGS

            	
              51

            
	
              19

            	
              EVENTS
      OF DEFAULT

            	
              51

            
	
              20

            	
              FEES
      AND EXPENSES

            	
              56

            
	
              21

            	
              INDEMNITIES

            	
              57

            
	
              22

            	
              NO
      SET-OFF OR TAX DEDUCTION

            	
              59

            
	
              23

            	
              ILLEGALITY,
      ETC

            	
              52

            
	
              24

            	
              INCREASED
      COSTS

            	
              60

            
	
              25

            	
              SET-OFF

            	
              61

            
	
              26

            	
              TRANSFERS
      AND CHANGES IN LENDING OFFICES

            	
              62

            
	
              27

            	
              VARIATIONS
      AND WAIVERS

            	
              66

            
	
              28

            	
              NOTICES

            	
              67

            
	
              29

            	
              SUPPLEMENTAL

            	
              69

            
	
              30

            	
              LAW
      AND JURISDICTION

            	
              69

            

    

     

    
      	
              SCHEDULE
      1

            	
              LENDERS
      AND COMMITMENTS

            	
              71

            
	
              SCHEDULE
      2

            	
              DETAILS
      OF CHARTERPARTIES

            	
              72

            
	
              SCHEDULE
      3

            	
              DRAWDOWN
      NOTICE

            	
              73

            
	
              SCHEDULE
      4

            	
              CONDITION
      PRECEDENT DOCUMENTS

            	
              74

            
	
              SCHEDULE
      5

            	
              TRANSFER
      CERTIFICATE

            	
              77

            
	
              SCHEDULE
      6

            	
              FORM
      OF COMPLIANCE CERTIFICATE

            	
              81

            

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THIS LOAN AGREEMENT is made on
27 December 2007

     

    BETWEEN:

     

    
      	
               
      

            	
              (1)

            	
              STAR BULK CARRIERS CORP.
      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 Schedule I, as Lenders;

            

    

     

    
      	
               
      

            	
              (3)

            	
              COMMERZBANK AG acting
      through its office at Ness 7-9 D-20457, Hamburg Germany, as Agent;
    and

            

    

     

    
      	
               
      

            	
              (4)

            	
              COMMERZBANK AG acting
      through its office at Ness 7-9 D-20457, Hamburg Germany, as Security
      Trustee.

            

    

     

    WHEREAS:

     

    The
Lenders have agreed to make available to the Borrower a term loan facility in an
amount of up to the lesser of (a) $120,000,000 and (b) 80 per cent. of the
aggregate Initial Market Value of the Ships which shall be made available to
Borrower for the purpose of:

     

    
      	
               
      

            	
              (a)

            	
              financing
      or, as the case may be, refinancing part of the acquisition cost of the
      Ships; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              assisting
      the Borrower in making any redemption payments to its
      shareholders.

            

    

     

    IT IS AGREED as
follows:

     

     

    
      	
              1  

            	
              INTERPRETATION

            

    

     

    
      	
              1.1  

            	
              Definitions.  Subject
      to Clause 1.6 in this Agreement:

            

    

     

    “Additional Ships” means,
together, “C DUCKLING”, “F DUCKLING” and “G DUCKLING” and, in the singular,
means any of them;

     

    “Advances” means the principal
amount of each borrowing by the Borrower under this Agreement;

     

    “Affected Lender” has the
meaning given in Clause 5.5;

     

    “Agency and Trust Deed” means
the agency and trust deed executed or to be executed between the Borrower, the
Lenders, the Agent and the Security Trustee in such form as the Lenders may
approve or require;

     

    “Agent” means Commerzbank AG
and any of its successors including, without limitation, any successor appointed
under clause 5 of the Agency and Trust Deed;

     

    “Approved Flag” means the
Marshall Islands flag or such other flag as the Agent may, acting upon the
instructions of the Majority Lenders, approve as the flag on which a Ship shall
be registered;

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Approved Flag State” means
the Republic of Marshall Islands, or any other country in which the Agent, may,
acting upon the instructions of the Majority Lenders, approve that a Ship be
registered;

     

    “Approved Manager” means, in
relation to the commercial management of each Ship, Star Bulk Management Inc., a
corporation incorporated in the Republic of Marshall Islands having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960 or any other company which the Agent may,
with the authorisation of the Majority Lenders, approve from time to time as the
commercial manager of a Ship;

     

    “Asset Cover Percentage”
means, on each Margin Calculation Date, the Loan expressed as a percentage of
the aggregate Market Value of the Mortgaged Ships at that time;

     

    “Availability Period” means,
in relation to an Advance, the period commencing on the date of this Agreement
and ending on:

     

    
      	
               
      

            	
              (a)

            	
              31
      January 2008 (or such later date as the Agent may, with the authorisation
      of all the Lenders, agree with the Borrower);
or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      earlier, the date on which the Total Commitments are fully borrowed,
      cancelled or terminated;

            

    

     

    “Book Equity” means, at any
relevant time, the aggregate of the amounts paid-up or credited as paid-upon of
the issued capital stock of the Borrower and the other members of the Group and
any additional paid-in capital of the Borrower and the other members of the
Group and the amount of consolidated capital and revenue reserves of the
Borrower and the other members of the Group (including any share premium
account, capital redemption reserve fund, revaluation reserve and any credit
balance on any retained earnings account(s) of any member of the Group) and
other stockholders’ equity determined in accordance with GAAP all as shown by
the latest consolidated accounts of the Group delivered under this Agreement but
after:

     

    
      	
               
      

            	
              (i)

            	
              deducting
      any debit balance on such retained earnings
  account(s);

            

    

     

    
      	
               
      

            	
              (ii)

            	
              deducting
      any amount shown in such combined balance sheet in respect of goodwill
      (including goodwill arising on consolidation) and other intangible
      assets;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              excluding
      any amounts set aside for taxation as at the date of such balance sheet
      and making such adjustments as may be appropriate in respect of any
      significant additional taxation expected to result from transactions
      carried out by any member of the Group after such date and not reflected
      in that balance sheet;

            

    

     

    “Borrower” means Star Bulk
Carriers Corp., a corporation incorporated in the Marshall Islands and having
its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960;

     

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

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “C DUCKLING” means the
2002-built Supramax bulk carrier of 52,500 metric deadweight tons currently
registered in the ownership of the relevant Seller under the Panamanian flag
with the name “C DUCKLING” which is to be acquired by Star G pursuant to the
relevant MOA and registered in the ownership of Star G under the relevant
Approved Flag with the name “STAR GAMMA”;

     

    “Charterparty” means, in
relation to each Ship, the Initial Charterparty or the Future Charterparty in
respect of that Ship;

     

    “Charterparty Assignment”
means, in relation to each Ship, an assignment of the rights of the Owner of
that Ship under each Initial Charterparty or, as the case may be, any Future
Charterparty executed or, as the context may require, to be executed by the
relevant Owner in favour of the Security Trustee, in each case, in such form as
the Lenders may approve or require and, in the plural, means all of
them;

     

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

     

    “Compliance Certificate” means
a certificate in the form set out in Schedule 6 (or in any other form which the
Agent, acting with the authorisation of all the Lenders, approves or
requires);

     

    “Contract Price”
means:

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to “C DUCKLING”,
$43,474,354.37;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      relation to “F DUCKLING”,
$40,917,039.41;

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      relation to “G DUCKLING”,
$40,917,039.41;

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      relation to “I DUCKLING”, $42,451,428.39;
and

            

    

     

    
      	
               
      

            	
              (e)

            	
              in
      relation to “J DUCKLING”,
$43,985,817.36,

            

    

     

    being, in
each case, the purchase price for each Ship payable by the relevant Owner to the
relevant Seller pursuant to the relevant MOA;

     

    “Contractual Currency” has the
meaning given in Clause 21.5;

     

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

     

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

     

    “Dollars” and “5” means the
lawful currency for the time being of the United States of America;

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

     

    “Drawdown Notice” means a
notice in the form set out in Schedule 3 (or in any other form which the Agent
approves or reasonably requires);

     

    “Earnings” means, in relation
to each Ship, all moneys whatsoever which are now, or later become, payable
(actually or contingently) to the Owner thereof or the Security Trustee and
which arise out of the use or operation of that Ship, including (but not limited
to):

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    “Earnings Account” means, in
relation to each Ship, an account in the name of the Owner of that Ship, with
the Agent designated “[name of Ship] - Earnings Account”, or any other account
(with that or another office of the Agent) which is designated by the Agent as
the Earnings Account for that Ship for the purposes of this Agreement and, in
the plural means all of them;

     

    “Earnings Account Pledge”
means, in relation to each Earnings Account, a deed of pledge creating
security in respect of that Earnings Account in such form as the Lenders may
approve or require and in the plural means all of them;

     

    “Environmental Claim”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

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

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Environmental Incident”
means, in relation to each Ship:

     

    
      	
               
      

            	
              (a)

            	
              any
      release of Environmentally Sensitive Material from that Ship;
      or

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      other incident in which Environmentally Sensitive Material is released
      otherwise than from that Ship and in connection with which that Ship is
      actually or potentially liable to be arrested and/or where the Owner
      thereof and/or any operator or manager of that Ship is at fault or
      allegedly at fault or otherwise liable to any legal or administrative
      action;

            

    

     

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

     

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

     

    “Event of Default” means any
of the events or circumstances described in Clause 18.1;

     

    “Finance Documents”
means:

     

    
      	
               
      

            	
              (a)

            	
              this
      Agreement;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Agency and Trust Deed;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Guarantees;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Mortgages;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      General Assignments;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Earnings Account Pledges;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Charterparty Assignments;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Shares Pledges;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Manager’s Undertakings; and

            

    

     

    
      	
               
      

            	
              (j)

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

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

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

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    “Fleet Vessels” means,
together, all of the vessels (including, but not limited to, the Ships) from
time to time owned by members of the Group;

     

    “Future Charterparty” means,
in relation to each Ship, any time charterparty, consecutive voyage charter or
contract of affreightment in respect of such Ship (other than any Initial
Charterparty) of a duration (or capable of being or exceeding a duration) of 12
months or more and any guarantee of such charter or other contract of employment
in respect of such Ship to be entered into by the Owner of such Ship and a
charterer approved by the Agent in form and substance satisfactory to the Agent
(in each case, acting upon the instructions of the Majority
Lenders);

     

    “F DUCKLING” means the
2000-built Supramax bulk carrier of 52,434 metric deadweight tons currently
registered in the ownership of the relevant Seller under the Panamanian flag
with the name “F DUCKLING” which is to be acquired by Star D pursuant to the
relevant MOA and registered in the ownership of Star D under the relevant
Approved Flag with the name “STAR DELTA”;

     

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

     

    “G DUCKLING” means the
2001-built Supramax bulk carrier of 52,434 deadweight tons which has been
delivered by the relevant Seller to Star E pursuant to the relevant MOA and
registered in the name of Star E under the relevant Approved Flag with the name
“STAR EPSILON”;

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

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

     

    “Guarantee” means, in relation
to each Owner, the guarantee executed or to be executed by each Owner in favour
of the Security Trustee guaranteeing the obligations of the Borrower under this
Agreement and the other Finance Documents in such form as the Lenders shall
approve or require and, in the plural, means all of them;

     

    “IACS” means the International
Association of Classification Societies;

     

    “Identified Ships” means,
together, “I DUCKLING” and “J DUCKLING” and, in the singular, means either of
them;

     

    “I DUCKLING” means the
2003-built Supramax bulk carrier of 52,994 metric deadweight tons registered in
the ownership of the relevant Seller under the Panamanian flag with the name “I
DUCKLING” which is to be acquired by Star Z pursuant to the relevant MOA and
registered in the name of Star Z under the Approved Flag with the name “STAR
ZETA”;

     

    “Initial Charterparty” means,
in relation to each Ship, the time charterparty in relation to that Ship as more
particularly described in Schedule 2 to be in form and substance satisfactory to
the Agent (acting upon the instructions of the Majority Lenders) and, in the
plural, means all of them;

     

    “Initial Market Value” means,
in relation to each Ship, the market value thereof calculated in accordance with
paragraph 6 of Schedule 4, Part B;

     

    “Insurances” means, in
relation to each Ship:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      rights and other assets relating to, or derived from, any of the
      foregoing, including any rights to a return of a
  premium;

            

    

     

    “Interest Period” means a
period determined in accordance with Clause 5;

     

    “ISM Code” means, in relation
to its application to each Owner, its Ship and its operation:

     

    
      	
               
      

            	
              (a)

            	
              ‘The
      International Management Code for the Safe Operation of Ships and for
      Pollution Prevention’, currently known or referred to as the ‘ISM Code’,
      adopted by the Assembly of the International Maritime Organisation by
      Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994
      into chapter IX of the International Convention for the Safety of Life at
      Sea 1974 (SOLAS 1974); and

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              all
      further resolutions, circulars, codes, guidelines, regulations and
      recommendations which are now or in the future issued by or on behalf of
      the International Maritime Organisation or any other entity with
      responsibility for implementing the ISM Code, including without
      limitation, the ‘Guidelines on implementation or administering of the
      International Safety Management (ISM) Code by Administrations’ produced by
      the International Maritime Organisations pursuant to Resolution A.788(19)
      adopted on 25 November 1995,

            

    

     

    as the
same may be amended, supplemented or replaced from time to time;

     

    “ISM Code Documentation”
includes, in relation to each Ship:

     

    
      	
               
      

            	
              (a)

            	
              the
      document of compliance (DOC) and safety management certificate (SMC)
      issued pursuant to the ISM Code in relation to that Ship within the
      periods specified by the ISM Code;
and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      other documents and data which are relevant to the ISM SMS and its
      implementation and verification which the Agent may require;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      other documents which are prepared or which are otherwise relevant to
      establish and maintain the Ship’s or the compliance of its Owner with the
      ISM Code which the Agent may
require;

            

    

     

    “ISM SMS” means, in relation
to each Ship, the safety management system for that Ship which is required to be
developed, implemented and maintained under the ISM Code;

     

    “ISPS Code” means the
International Ship and Port Facility Security Code constituted pursuant to
resolution A.924(22) of the International Maritime Organisation (“IMO”) now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of
the IMO on Maritime Security in December 2002 and includes any amendments or
extensions to it and any regulation issued pursuant to it but shall only apply
insofar as it is applicable law in the relevant Ship’s flag state and any
jurisdiction on which such Ship is operated;

     

    “ISPS Code Documentation”
includes:

     

    
      	
               
      

            	
              (a)

            	
              the
      International Ship Security Certificate issued pursuant to the ISPS Code
      in relation to each Ship within the period specified in the ISPS Code;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              all
      other documents and data which are relevant to the ISPS Code and its
      implementation and verification which the Agent may
    require;

            

    

     

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

     

    “J DUCKLING” means the
2003-built Supramax bulk carrier of 52,500 metric deadweight tons which has been
delivered by the relevant Seller to Star T pursuant to the relevant MOA and
registered in the ownership of Star T under the relevant Approved Flag with the
name “STAR THETA”;

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “Lender” means, subject to
Clause 26.6:

     

    
      	
               
      

            	
              (a)

            	
              a
      bank or financial institution listed in Schedule 1 and acting through its
      branch indicated in Schedule 1 (or through another branch notified to the
      Borrower under Clause 26.14) unless it has delivered a Transfer
      Certificate or Certificates covering the entire amounts of its Commitment
      and its Contribution; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      holder for the time being of a Transfer
  Certificate;

            

    

     

    
      	
               
      

            	
              “LIBOR” means, for an
      Interest Period:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      rate per annum equal to the offered quotation for deposits in Dollars for
      a period equal to, or as near as possible equal to, the relevant Interest
      Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
      (London time) on the second Business Day prior to the commencement of that
      Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
      Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
      on the Reuters Money News Services or such other page as may replace
      REUTERS BBA Page LIBOR 01 on that service for the purpose of displaying
      rates comparable to that rate or on such other service as may be nominated
      by the British Bankers’ Association for the purpose of displaying British
      Bankers’ Association Interest Settlement Rates for Dollars);
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              if
      no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
      determined by the Agent to be the arithmetic mean of the rates per annum
      notified to the Agent by each Lender to be the rate per annum at which
      deposits in Dollars are offered to that Lender by leading banks in the
      London Interbank Market at that Lender’s request of or about 11.00 a.m.
      (London time) on the Quotation Date for that Interest Period for a period
      equal to that Interest Period and for delivery on the first Business Day
      of it;

            

    

     

    “Liquid Funds” means, in
respect of the relevant period, the aggregate of:

     

    
      	
               
      

            	
              (a)

            	
              cash
      in hand or held with banks or other financial institutions of at least
      investment grade rating which is free of any Security Interest;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      undrawn amounts under loan or credit facilities which are freely available
      by an investment grade financial
institution;

            

    

     

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

     

    “Major Casualty” means, in
relation to each Ship, any casualty to that Ship in respect of which the claim
or the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds $250,000 or the equivalent in any
other currency;

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “Majority Lenders”
means:

     

    
      	
               
      

            	
              (a)

            	
              before
      an Advance has been made, Lenders whose Commitments total at least 66 2/3
      per cent. of the Total Commitments;
and

            

    

     

    
      	
               
      

            	
              (b)

            	
              after
      an Advance has been made, Lenders whose Contributions total 66 2/3 per
      cent. of the Loan;

            

    

     

    “Manager’s Undertaking” means,
in relation to each Ship, a letter of undertaking executed or to be executed by
the Approved Manager in favour of the Security Trustee in such form as the
Lenders may approve or require agreeing certain matters in relation to the
management of that Ship and subordinating the rights of the Approved Manager
against the Ship and the Owner thereof to the rights of the Creditor Parties
under the Finance Documents and, in the plural, means all of them;

     

    “Management Agreement” means,
in relation to each Ship, an agreement made or to be made between the Owner of
that Ship and the Approved Manager in respect of the commercial and/or technical
management of the Ship to be in form and substance in every respect satisfactory
to the Agent (acting upon the instructions of the Majority Lenders) and, in the
plural, means all of
them;

     

    “Margin” means, if at any
relevant time the Asset Cover Percentage is:

     

    
      	
               
      

            	
              (a)

            	
              less
      than or equal to 60 per cent. 0.80 per cent. per
  annum;

            

    

     

    
      	
               
      

            	
              (b)

            	
              more
      than 60 per cent. but less than or equal to 70 per cent. 0.90 per cent.
      per annum;

            

    

     

    
      	
               
      

            	
              (c)

            	
              more
      than 70 per cent. but less than or equal to 75 per cent., 1.00 per cent.
      per annum; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              more
      than 75 per cent., 1.25 per cent. per
annum;

            

    

     

    “Margin Calculation Date” has
the meaning given to that term in Clause 5.14;

     

    “Market Value” means, in
relation to each Ship and each Fleet Vessel, the market value thereof calculated
in accordance with Clause 15.4;

     

    “Market Value Adjusted Equity”
means, at any relevant time, the Book Equity after:

     

    
      	
               
      

            	
              (a)

            	
              deducting
      (so far as not otherwise excluded as attributable to minority interests) a
      sum equal to the aggregate of the amount by which the book value of any
      Fleet Vessels on a consolidated basis exceeds the Market Value of such
      Fleet Vessels; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              adding
      (so far as not otherwise excluded as attributable to minority interests) a
      sum equal to the amount by which the Market Value of the Fleet Vessels
      determined in accordance with Clause 15.4 exceeds the book value of such
      Fleet Vessels;

            

    

     

    “Market Value Adjusted Equity Ratio”
means the Market Value Adjusted Equity expressed as a percentage of the
Total Assets;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “MOA” means:

     

    
      	
               
      

            	
              (a)

            	
              in
      relation to “C DUCKLING”, the memorandum of agreement dated 12 January
      2007 entered into between the relevant Seller and Star G in respect of the
      sale of “C DUCKLING”;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      relation to “F DUCKLING”, the memorandum of agreement dated 12 January
      2007 entered into between the relevant Seller and Star D in respect of the
      sale of “F DUCKLING”

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      relation to “G DUCKLING”, the memorandum of agreement dated 12 January
      2007 entered into between the relevant Seller and Star E in respect of the
      sale of “G DUCKLING”;

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      relation to “1 DUCKLING”, the memorandum of agreement dated 12 January
      2007 entered into between the relevant Seller and Star Z in respect of the
      sale of “I DUCKLING”;

            

    

     

    
      	
               
      

            	
              (e)

            	
              in
      relation to “J DUCKLING”, the memorandum of agreement dated 12 January
      2007 entered into between the relevant Seller and Star T in respect of the
      sale of “J DUCKLING”;

            

    

     

    and, in
the plural, means all of them;

     

    “Mortgage” means in relation
to each Ship, a first priority or, as the case may be, preferred mortgage on
such Ship under the relevant Approved Flag, each in such form as the Lenders may
approve or require and, in plural, means all of them;

     

    “Mortgaged Ship” means a Ship
which is subject to a Mortgage at any relevant time and, in the plural, means
all of them;

     

    “Negotiation Period” has the
meaning given in Clause 5.8;

     

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

     

    “Owner” means in relation
to:

     

    
      	
               
      

            	
              (a)

            	
              “C
      DUCKLING”, Star G;

            

    

     

    
      	
               
      

            	
              (b)

            	
              “F
      DUCKLING”, Star D;

            

    

     

    
      	
               
      

            	
              (c)

            	
              “G
      DUCKLING”, Star E;

            

    

     

    
      	
               
      

            	
              (d)

            	
              “I
      DUCKLING”, Star Z; and

            

    

     

    
      	
               
      

            	
              (e)

            	
              “J
      DUCKLING”, Star T;

            

    

     

    and in
the plural, means all of them;

     

    “Payment Currency” has the
meaning given in Clause 21.5;

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    “Permitted Security Interests”
means:

     

    
      	
               
      

            	
              (a)

            	
              Security
      Interests created by the Finance
Documents;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              liens
      for salvage;

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

            	
              liens
      for master’s disbursements incurred in the ordinary course of trading and
      any other lien arising by operation of law or otherwise in the ordinary
      course of the operation, repair or maintenance of a Ship, provided such
      liens do not secure amounts more than 30 days overdue (unless the overdue
      amount is being contested by the relevant Owner in good faith by
      appropriate steps) and subject, in the case of liens for repair or
      maintenance, to Clause 14.13(h);

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      	
               
      

            	
              (g)

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

            

    

     

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

     

    
      	
               
      

            	
              (a)

            	
              England
      and Wales;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    
      	
               
      

            	
              (e)

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

            

    

     

    
      	
               
      

            	
              (f)

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

            

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

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

     

    “Quotation Date” means, in
relation to any Interest Period (or any other period) for which an interest rate
is to be determined under any provision of a Finance Document) the day on which
quotations would ordinarily be given by leading banks in the London Interbank
Market for deposits in currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or other
period;

     

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

     

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

     

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

     

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

     

    “Security Cover Percentage”
means, at any relevant time, the aggregate of the amounts referred in
paragraphs (a) and (b) of Clause 15.1 expressed as a percentage of the of the
Loan;

     

    “Security Interest”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    “Security Party” means each
Owner, the Approved Manager and any other person (except a Creditor Party or a
party which is not a member of the Group or is not controlled (either directly
or indirectly) by the Borrower) who, as a surety or mortgagor, as a party to any
subordination or priorities arrangement, or in any similar capacity, executes a
document falling within the final paragraph of the definition of “Finance
Documents”;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    “Security Period” means the
period commencing on the date of this Agreement and ending on the date on which
the Agent notifies the Borrower, the Security Parties and the Lenders
that:

     

    
      	
               
      

            	
              (a)

            	
              all
      amounts which have become due for payment by the Borrower or any Security
      Party under the Finance Documents have been
  paid;

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      the Borrower nor any Security Party has any future or contingent liability
      under Clause 20, 21 or 22 below or any other provision of this Agreement
      or another Finance Document; and

            

    

     

    
      	
               
      

            	
              (d)

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

            

    

     

    “Security Trustee” means
Commerzbank AG and any of its successors including, without limitation, any
successor appointed under clause 5 of the Agency and Trust Deed;

     

    “Seller” means, in relation
to:

     

    
      	
               
      

            	
              (a)

            	
              “C
      DUCKLING”, C Duckling Corporation;

            

    

     

    
      	
               
      

            	
              (b)

            	
              “F
      DUCKLING”, F Duckling Corporation;

            

    

     

    
      	
               
      

            	
              (c)

            	
              “G
      DUCKLING”, G Duckling Corporation;

            

    

     

    
      	
               
      

            	
              (d)

            	
              “I
      DUCKLING”, I Duckling Corporation;
and

            

    

     

    
      	
               
      

            	
              (e)

            	
              “J
      DUCKLING”, J Duckling Corporation;

            

    

     

    each a
company incorporated in Panama and, in the plural, means all of
them;

     

    “Shares Pledge” means, in
relation to each Owner, a pledge of the shares in that Owner to be executed by
the Borrower in favour of the Security Trustee, each to be in such form as the
Lenders may approve or require and in the plural means all of them;

     

    “Ships” means, together, the
Identified Ships and the Additional Ships and, in the singular, means any of
them;

     

    “Star D” means Star Delta LLC,
a corporation incorporated in the Republic of the Marshall Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    “Star E” means Star Epsilon
LLC, a limited liability company formed in the Republic of the Marshall Islands
whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, The Marshall Islands MH 96960;

     

    “Star G” means Star Gamma LLC,
a limited liability company formed in the Republic of the Marshall Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960;

     

    “Star T” means Star Theta LLC,
a limited liability company formed in the Republic of the Marshall Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960;

     

    “Star Z” means Star Zeta LLC,
a limited liability company formed in the Republic of Marshall Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Marshall Islands MH 96960

     

    “Tranche A Balloon Instalment”
has the meaning given in Clause 8.I(a); 

     

    “Tranche B Balloon Instalment”
has the meaning given in Clause 8.1(b);

     

    “Total Assets” means, at any
relevant time, the aggregate of (i) the aggregate Market Value of the Fleet
Vessels, (ii) the value on a consolidated basis of all other tangible fixed
assets of the Group (less depreciation computed in accordance with GAAP and
(iii) the aggregate amount of cash and cash equivalents and receivables due to
any member of the Group by a person who is not a member of the Group, including
any Liquid Funds;

     

    “Total Loss” means in relation
to each Ship:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      arrest, capture, seizure or detention of that Ship (including any
      hijacking or theft) unless she is within 30 days redelivered to the full
      control the relevant Owner;

            

    

     

    “Total Loss Date”
means:

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (i)

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

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      date of any compromise, arrangement or agreement made by or on behalf of
      the relevant Owner, with that Ship’s insurers in which the insurers agree
      to treat that Ship as a total loss;
and

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      the case of any other type of total loss, on the date (or the most likely
      date) on which it appears to the Agent that the event constituting the
      total loss occurred;

            

    

     

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

     

    “Tranche A” means an amount of
up to $50,000,000 to be made available in accordance with the applicable
provisions of this Agreement in one or more Advances and which is to be applied
in part-financing or refinancing the acquisition cost of the Identified
Ships;

     

    “Tranche B” means an amount of
up to $70,000,000 to be made available in accordance with the applicable
provisions of this Agreement in such or more Advances and which is to be applied
in part-financing or refinancing the acquisition cost of the Additional Ships
and in assisting the Borrower in making any redemption payments to its
shareholders;

     

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

     

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

     

    
      	
              1.2  

            	
              Construction of certain terms.
      In this Agreement:

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    “months” shall be construed in
accordance with Clause 1.4;

     

    “obligatory insurances” means
all insurances effected, or which the Borrower is obliged to effect, under
Clause 13 below or any other provision of this Agreement or another Finance
Document;

     

    “parent company” has the
meaning given in Clause 1.5;

     

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

     

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

     

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

     

    “regulation” includes any
regulation, rule, official directive, request or guideline (either having the
force of law or compliance with which is reasonable in the ordinary course of
business of the party concerned) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;

     

    “subsidiary” has the meaning
given in Clause 1.5;

     

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

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

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

     

    “war risks” means the risks
according to Institute War and Strike Clauses (Hull Time) (1/10/83) or
(1/11/95), or equivalent conditions, including, but not limited to risk of
mines, blocking and trapping, missing vessel, confiscation, vandalism, sabotage
and malicious mischief and all risks excluded from the standard form of English
or other marine policy.

     

    
      	
              1.3  

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

            

    

     

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              1.4  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

    
      	
              1.5  

            	
              General
      Interpretation.

            

    

     

    
      	
              (a)  

            	
              In
      this Agreement:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (b)  

            	
              Clauses
      1.2 to 1.5 and paragraph (a) of this Clause 1.6 apply unless the contrary
      intention appears.

            

    

     

    
      	
              (c)  

            	
              References
      in Clause 1.2 to a document being in a particular form include references
      to that form with any modifications to that form which the Agent (with the
      authorisation of the Majority Lenders in the case of substantial
      modifications) approves or reasonably
requires.

            

    

     

    
      	
              (d)  

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

            

    

     

     

    
      	
              2  

            	
              FACILITY

            

    

     

    
      	
              2.1  

            	
              Amount of facility.
      Subject to the other provisions of this Agreement, the Lenders
      shall make available to the Borrower a term loan facility not exceeding
      the lesser of (a) $120,000,000 and (b) an amount equal to 80 per cent. of
      the aggregate Initial Market Values of the Ships in two Tranches, Tranche
      A and Tranche B. Each Tranche may be made available in one or more
      Advances but the aggregate number of Advances shall not exceed the number
      of Mortgaged Ships.

            

    

     

    
      	
              2.2  

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

            

    

     

    
      	
              2.3  

            	
              Purpose of Loan. The
      Borrower undertakes with each Creditor Party to use each Advance only for
      the purpose stated in the preamble to this Agreement and Clause
      2.1.

            

    

     

     

    
      	
              3  

            	
              POSITION
      OF THE LENDERS AND THE MAJORITY
LENDERS

            

    

     

    
      	
              3.1  

            	
              Interests of Lenders several.
      The rights of the Lenders under this Agreement are several;
      accordingly each Lender shall be entitled to sue for any amount which has
      become due and payable by the Borrower to it under this Agreement without
      joining the Agent, the Security Trustee and any other Lender as additional
      parties in the proceedings.

            

    

     

    
      	
              3.2  

            	
              Proceedings by individual
      Lender. However, without the prior consent of the Majority Lenders,
      no Lender may bring proceedings in respect
of:

            

    

     

    
      	
              (a)  

            	
              any
      other liability or obligation of the Borrower or a Security Party under or
      connected with a Finance Document;
or

            

    

     

    
      	
              (b)  

            	
              any
      misrepresentation or breach of warranty by the Borrower or a Security
      Party in or connected with a Finance
Document.

            

    

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
      	
              3.3  

            	
              Obligations
      several.  The obligations of the Lenders under this
      Agreement are several; and a failure of a Lender to perform its
      obligations under this Agreement shall not result
  in:

            

    

     

    
      	
               
      

            	
              (a)  
      

            	
              the
      obligations of the other Lenders being increased;
  nor

            

    

     

    
      	
               
      

            	
              (b)  
      

            	
              the
      Borrower, any Security Party or any other Creditor Party being discharged
      (in whole or in part) from its obligations under any Finance
      Document;

            

    

     

    and in no
circumstances shall a Lender have any responsibility for a failure of another
Lender to perform its obligations under this Agreement.

     

    
      	
              3.4  

            	
              Parties bound by certain
      actions of Majority Lenders. Every Lender, the Borrower and each
      Security Party shall be bound by:

            

    

     

    
      	
              (a)  

            	
              any
      determination made, or action taken, by the Majority Lenders under any
      provision of a Finance Document;

            

    

     

    
      	
              (b)  

            	
              any
      instruction or authorisation given by the Majority Lenders to the Agent or
      the Security Trustee under or in connection with any Finance Document;
      and

            

    

     

    
      	
              (c)  

            	
              any
      action taken (or in good faith purportedly taken) by the Agent or the
      Security Trustee in accordance with such an instruction or
      authorisation.

            

    

     

    
      	
              3.5  

            	
              Reliance on action of Agent.
      However, the Borrower and each Security
  Party:

            

    

     

    
      	
              (a)  

            	
              shall
      be entitled to assume that the Majority Lenders have duly given any
      instruction or authorisation which, under any provision of a Finance
      Document, is required in relation to any action which the Agent has taken
      or is about to take; and

            

    

     

    
      	
              (b)  

            	
              shall
      not be entitled to require any evidence that such an instruction or
      authorisation has been given.

            

    

     

    
      	
              3.6  

            	
              Construction. In Clauses
      3.4 and 3.5 references to action taken include (without limitation) the
      granting of any waiver or consent, an approval of any document and an
      agreement to any matter.

            

    

     

     

    
      	
              4  

            	
              DRAWDOWN

            

    

     

    
      	
              4.1  

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

            

    

     

    
      	
              4.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              the
      amount of each Tranche shall not
exceed:

            

    

     

    
      	
              (i)  

            	
              in
      the case of the Tranche A, an amount not exceeding the lesser of
      $50,000,000 and 80 per cent. of the aggregate Initial Market Value of the
      Identified Ships which shall be made available in up to 2 Advances for the
      purpose of financing or, as the case may be, refinancing part of the
      acquisition cost of the Identified Ships payable by the relevant Owners to
      the relevant Sellers pursuant to the MOA’s for the Identified Ships;
      and

            

    

     

    
      	
              (ii)  

            	
              in
      the case of the Tranche B, an amount not exceeding the lesser of
      $70,000,000 and 80 per cent. of the aggregate Initial Market Value of the
      Additional Ships which shall be made available in up to 3 Advances for the
      purpose of:

            

    

     

    
      	
              (aa)  

            	
              financing
      any redemption payments to the Borrowers’ shareholders;
  and

            

    

     

    
      	
              (bb)  

            	
              financing
      or, as the case may be, refinancing part of the acquisition cost of the
      Additional Ships payable by the relevant Owners to the relevant Sellers
      pursuant to the MOAs for the Additional
Ships,

            

    

     

    Provided always that the
aggregate principal amount of the Advances shall not exceed
$120,000,000.

     

    
      	
              4.3  

            	
              Notification to Lenders of
      receipt of a Drawdown Notice. The Agent shall promptly notify the
      Lenders that it has received a Drawdown Notice in respect of an Advance
      or, as the case may be, a Tranche and shall inform each Lender
      of:

            

    

     

    
      	
              (a)  

            	
              the
      amount of the Advance or, as the case may be, the Tranche and the Drawdown
      Date;

            

    

     

    
      	
              (b)  

            	
              the
      amount of that Lender’s participation in the Advance or, as the case may
      be, the Tranche; and

            

    

     

    
      	
              (c)  

            	
              the
      duration of the first Interest Period applicable to that Advance or, as
      the case may be, the Tranche.

            

    

     

    
      	
              4.4  

            	
              Drawdown Notice irrevocable.
      A Drawdown Notice must be signed by an authorized signatory or a
      director of the Borrower; and once served, a Drawdown Notice cannot be
      revoked without the prior consent of the Agent, acting on the authority of
      the Majority Lenders.

            

    

     

    
      	
              4.5  

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

            

    

     

    
      	
              4.6  

            	
              Disbursement of Advance.
      Subject to the provisions of this Agreement, the Agent shall on
      each Drawdown Date pay to the Borrower the amounts which the Agent
      receives from the Lenders under Clause 4.5; and that payment to the
      Borrower shall be made:

            

    

     

    
      	
              (a)  

            	
              to
      the account which the Borrower specifies in the relevant Drawdown Notice;
      and

            

    

     

    
      	
              (b)  

            	
              in
      the like funds as the Agent received the payments from the
      Lenders.

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      	
              4.7  

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

            

    

     

     

    
      	
              5  

            	
              INTEREST

            

    

     

    
      	
              5.1  

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

            

    

     

    
      	
              5.2  

            	
              Normal rate of interest.
      Subject to the provisions of this Agreement, the rate of interest
      on each Advance and the Loan and each part thereof in respect of an
      Interest Period shall be the aggregate of (i) the applicable Margin and
      (ii) LIBOR.

            

    

     

    
      	
              5.3  

            	
              Payment of accrued interest.
      In the case of an Interest Period longer than 6 months, accrued
      interest shall be paid every 3 months during that Interest Period and on
      the last day of that Interest
Period.

            

    

     

    
      	
              5.4  

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

            

    

     

    
      	
              (a)  

            	
              each
      rate of interest; and

            

    

     

    
      	
              (b)  

            	
              the
      duration of each Interest Period;

            

    

     

    in each
case as soon as reasonably practicable after each is determined.

     

    
      	
              5.5  

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

            

    

     

    
      	
              (a)  

            	
              at
      least one Business Day before the start of an Interest Period, Lenders
      having Contributions together amounting to more than 50 per cent. of the
      Loan (or, if an Advance has not been made, Commitments amounting to more
      than 50 per cent. of the Total Commitments) notify the Agent that LIBOR
      fixed by the Agent would not accurately reflect the cost to those Lenders
      of funding their respective Contributions (or any part of them) during the
      Interest Period in the London Interbank Dollar Market at or about 11.00
      a.m. (London time) on the second Business Day before the commencement of
      the Interest Period; or

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              5.6  

            	
              Notification of market
      disruption. The Agent shall promptly notify the Borrower and each
      of the Lenders stating the circumstances falling within Clause 5.5 which
      have caused its notice to be given.

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	
              5.7  

            	
              Suspension of drawdown.
      If the Agent’s notice under Clause 5.6 is served before an Advance
      is made:

            

    

     

    
      	
              (a)  

            	
              in
      a case falling within paragraph (a) of Clause 5.5, the Lenders’
      obligations to make the Advance;

            

    

     

    
      	
              (b)  

            	
              in
      a case falling within paragraph (b) of Clause 5.5, the Affected Lender’s
      obligation to participate in the
Advance;

            

    

     

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

     

    
      	
              5.8  

            	
              Negotiation of alternative rate
      of interest. If the Agent’s notice under Clause 5.6 is served after
      an Advance is made, the Borrower, the Agent and the Lenders or (as the
      case may be) the Affected Lender shall use reasonable endeavours to agree,
      within the 30 days after the date on which the Agent serves its notice
      under Clause 5.6 (the “Negotiation Period”),
      an alternative interest rate or (as the case may be) an alternative
      basis for the Lenders or (as the case may be) the Affected Lender to fund
      or continue to fund their or its Contribution to the relevant Advance or
      Advances during the Interest Period
concerned.

            

    

     

    
      	
              5.9  

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

            

    

     

    
      	
              5.10  

            	
              Alternative rate of interest in
      absence of agreement. If an alternative interest rate or
      alternative basis is not agreed within the Negotiation Period, and the
      relevant circumstances are continuing at the end of the Negotiation
      Period, then the Agent shall, with the agreement of each Lender or (as the
      case may be) the Affected Lender, set an interest period and interest rate
      representing the cost of funding of the Lenders or (as the case may be)
      the Affected Lender in Dollars or in any available currency of their or
      its Contribution to the relevant Advance or Advances plus the applicable
      Margin; and the procedure provided for by this Clause 5.10 shall be
      repeated if the relevant circumstances are continuing at the end of the
      interest period so set by the
Agent.

            

    

     

    
      	
              5.11  

            	
              Notice of prepayment. If
      the Borrower does not agree with an interest rate set by the Agent under
      Clause 5.10, the Borrower may give the Agent not less than 15 Business
      Days’ notice of its intention to prepay the relevant Advance or Advances
      at the end of the interest period set by the
  Agent.

            

    

     

    
      	
              5.12  

            	
              Prepayment; termination of
      Commitments. A notice under Clause 5.11 shall be irrevocable; the
      Agent shall promptly notify the Lenders or (as the case may require) the
      Affected Lender of the Borrower’s notice of intended prepayment;
      and:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
      	
              5.13  

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

            

    

     

    
      	
              5.14  

            	
              Calculation of Asset Cover
      Percentage. The Agent shall calculate the Asset Cover Percentage on
      the first day of each Interest Period (each a “Margin Calculation Date”)
      for the purposes of calculating the Margin and shall advise the
      Borrower in writing, within 10 Business Days of each Margin Calculation
      Date, of the Margin which will apply the relevant Interest Period Provided that in respect
      of each Margin Calculation Date other than the first Margin Calculation
      Date, the Agent shall only be obliged to advise the Borrower of the Margin
      which will apply for the relevant Interest Period if that Margin will be
      different to the Margin which applied immediately prior to that Margin
      Calculation Date.

            

    

     

    For the
purposes of calculating the Asset Cover Percentage pursuant to this Clause 5.14,
the Market Value of the Mortgaged Ships shall be determined no more than 14 days
prior to the relevant Margin Calculation Date.

     

     

    
      	
              6  

            	
              INTEREST
      PERIODS

            

    

     

    
      	
              6.1  

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

            

    

     

    
      	
              6.2  

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

            

    

     

    
      	
              (a)  

            	
              3
      or 6 months as notified by the Borrower to the Agent not later than 11.00
      a.m. (Hamburg time) 3 Business Days before the commencement of the
      Interest Period;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              such
      other period as the Agent may, with the Majority Lenders’ authority, agree
      with the Borrower.

            

    

     

    
      	
              6.3  

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

            

    

     

    
      	
              6.4  

            	
              Non-availability of matching
      deposits for Interest Period selected. If, after the Borrower has
      selected an Interest Period longer than 6 months, any Lender notifies the
      Agent by 11.00 a.m. (Hamburg time) on the third Business Day before the
      commencement of the Interest Period that it is not satisfied that deposits
      in Dollars for a period equal to the Interest Period will be available to
      it in the London Interbank Market when the Interest Period commences, the
      Interest Period shall be of 6
months.

            

    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    
      	
              7  

            	
              DEFAULT
      INTEREST

            

    

     

    
      	
              7.1  

            	
              Payment of default interest on
      overdue amounts. The Borrower shall pay interest in accordance with
      the following provisions of this Clause 7 on any amount payable by the
      Borrower under any Finance Document which the Agent, the Security Trustee
      or the other designated payee does not receive on or before the relevant
      date, that is:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              if
      such amount has become immediately due and payable under Clause 19.4, the
      date on which it became immediately due and
  payable.

            

    

     

    
      	
              7.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              7.3  

            	
              Calculation of default rate of
      interest. The rates referred to in Clause 7.2
  are:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (i)  

            	
              LIBOR;
      or

            

    

     

    
      	
              (ii)  

            	
              if
      the Agent determines that Dollar deposits for any such period are not
      being made available to a Lender or (as the case may be) Lenders by
      leading banks in the London Interbank Market in the ordinary course of
      business, a rate from time to time determined by the Agent by reference to
      the cost of funds to the Agent from such other sources as the Agent may
      from time to time determine.

            

    

     

    
      	
              7.4  

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

            

    

     

    
      	
              7.5  

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

            

    

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    
      	
              7.6  

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

            

    

     

     

    
      	
              8  

            	
              REPAYMENT
      AND PREPAYMENT

            

    

     

    
      	
              8.1  

            	
              Repayment instalments.
      The Borrowers shall repay:

            

    

     

    
      	
              (a)  

            	
              Tranche
      A by 28 consecutive three-monthly instalments (i) in the case of the first
      to fourth instalments (inclusive), in the amount of $2,250,000 each, (ii)
      in the case of the fifth to seventeenth instalments (inclusive), in the
      amount of $1,000,000 each, (iii) in the case of the eighteenth to twenty
      eighth instalments (inclusive), in the amount of $1,300,000 and (iv) a
      balloon payment of $13,700,000 (the “Tranche A Balloon Instalment”)
      payable together with the twenty eighth instalment;
    and

            

    

     

    
      	
              (b)  

            	
              Tranche
      B, by 28 consecutive three-monthly instalments in the case of the (i)
      first to fourth instalments (inclusive) in the amount of $4,000,000 each,
      (ii) in the case of the fifth to twenty eighth instalments (inclusive) in
      the amount of $1,750,000 each and (iii) a balloon payment of $12,000,000
      (the “Tranche B Balloon
      Instalment “) payable together with the twenty eighth
      instalment,

            

    

     

    Provided
that if either Tranche is drawndown in less than the maximum available amount of
such Tranche, each repayment instalment applicable to that Tranche (including
the relevant Balloon Instalment) shall be reduced in inverse order of
payment.

     

    
      	
              8.2  

            	
              Repayment Dates. The
      first repayment instalment for each Tranche shall be repaid on the earlier
      of (a) the date falling 27 months after the first Drawdown Date for an
      Advance under that Tranche and (b) 31 March 2010, each subsequent
      repayment instalment shall be repaid at 3-monthly intervals thereafter and
      the last instalment shall be repaid together with the applicable Balloon
      Instalment, on the earlier of (i) the date falling on the ninth
      anniversary the Drawdown Date for the first Advance in respect of that
      Tranche and (ii) 31 December 2016.

            

    

     

    
      	
              8.3  

            	
              Final Repayment Date. On
      the final Repayment Date, the Borrower shall additionally pay to the Agent
      for the account of the Creditor Parties all other sums then accrued or
      owing under any Finance Document.

            

    

     

    
      	
              8.4  

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

            

    

     

    
      	
              8.5  

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

            

    

     

    
      	
              (a)  

            	
              a
      partial prepayment shall be $1,000,000 or a multiple of
      $1,000,000;

            

    

     

    
      	
              (b)  

            	
              the
      Agent has received from the Borrower at least 10 days’ prior written
      notice specifying the amount to be prepaid and the date on which the
      prepayment is to be made (such date shall be the last day of an Interest
      Period); and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    
      	
              8.6  

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

            

    

     

    
      	
              8.7  

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

            

    

     

    
      	
              8.8  

            	
              Mandatory prepayment.
      The Borrower shall be obliged to prepay the Relevant Amount of the
      Loan:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              if
      a Ship becomes a Total Loss, on the earlier of the date falling 120 days
      after the relevant Total Loss Date and the date of receipt by the Security
      Trustee of the proceeds of insurance relating to such Total
      Loss.

            

    

     

    In this
Clause 8.8:

     

    
      	
              (i)  

            	
              “Relevant Amount” means
      the higher of (aa) the Relevant Percentage of the Loan and (bb) an amount which
      after giving credit for the amount of the prepayment made pursuant to this
      Clause 8.8, results in the Security Cover Percentage being equal to the
      applicable Security Cover Percentage referred to in Clause 15.1;
      and

            

    

     

    
      	
              (ii)  

            	
              “Relevant Percentage”
      means the Market Value of the Ship which has been sold or become a
      Total Loss (on the date on which the sale of the Ship is completed by
      delivery to its buyer or, as the case may be, on the Total Loss Date in
      respect of the Ship) expressed as a percentage of the aggregate Market
      Value (on the same date) of all the Mortgaged
  Ships.

            

    

     

    
      	
              8.9  

            	
              Amounts payable on prepayment.
      A prepayment shall be made together with accrued interest (and any
      other amount payable under Clause 21 below or otherwise) in respect of the
      amount prepaid and, if the prepayment is not made on the last day of an
      Interest Period together with any sums payable under Clause 21.1(b) but
      without premium or penalty.

            

    

     

    
      	
              8.10  

            	
              Application of partial
      prepayment. Any sum received by the Agent pursuant
    to:

            

    

     

    
      	
              (a)  

            	
              Clause
      8.8 shall be applied pro rata against the repayment instalments which are
      at the time being outstanding (including any Balloon Instalment then
      outstanding); and

            

    

     

    
      	
              (b)  

            	
              Clause
      8.4 shall be applied in inverse order of maturity against the repayment
      instalments (including the Balloon Instalments) which are outstanding at
      the relevant time.

            

    

     

    
      	
              8.11  

            	
              Reborrowing. No amount
      prepaid in respect of the Loan may be
  reborrowed.

            

    

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
              8.12  

            	
              Prepayment Fee. If the
      Loan (or any part thereof) is prepaid (other than pursuant to Clause
      8.8(b)) on or before the date falling on the second anniversary of the
      date of this Agreement, the Borrower shall on the date on which the
      relevant prepayment is made pay to the Agent (for distribution among the
      Lenders in the agreed proportions) a prepayment fee equal to 0.3 per cent.
      of the amount prepaid.

            

    

     

     

    
      	
              9  

            	
              CONDITIONS
      PRECEDENT

            

    

     

    
      	
              9.1  

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

            

    

     

    
      	
              (a)  

            	
              that,
      on or before service of the first Drawdown Notice, the Agent receives the
      documents described in Part A of Schedule 4 in form and substance
      satisfactory to the Agent (acting on the authority of the Majority
      Lenders) and its lawyers;

            

    

     

    
      	
              (b)  

            	
              that,
      on or before the Drawdown Date relative to each Advance, the Agent
      receives the documents described in Part B of Schedule 4 in form and
      substance satisfactory to the Agent (acting on the authority of the
      Majority Lenders) and its lawyers;

            

    

     

    
      	
              (c)  

            	
              that,
      on or before the service of the first Drawdown Notice, the Agent receives
      all accrued commitment fee and all other fees referred to in Clause 20.1
      which are payable at that time and has received payment of the expenses
      referred to in Clause 20.2;

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              the
      representations and warranties in Clause 10 and those of the Borrower or
      any Security Party which are set out in the other Finance Documents would
      be true and not misleading if repeated on each of those dates with
      reference to the circumstances then
existing;

            

    

     

    
      	
              (iii)  

            	
              none
      of the circumstances contemplated by Clause 5.5 has occurred and is
      continuing; and

            

    

     

    
      	
              (iv)  

            	
              there
      has been no material adverse change in the financial position, state of
      affairs or prospects of the Borrower, any Security Party or any member of
      the Group since the date of the Agent’s commitment letter (dated 30 April
      2007) to the Borrower for the Loan, in the light of which the Agent
      considers that there is a significant risk that the Borrower or any other
      Security Party will later become unable to discharge its liabilities under
      the Finance Documents to which it is a party as they fall
    due;

            

    

     

    
      	
              (e)  

            	
              that,
      if the ratio set out in Clause 15.1 were applied immediately following the
      making of an Advance, the Borrower would not be obliged to provide
      additional security or prepay part of the Loan under that Clause;
      and

            

    

     

    
      	
              (f)  

            	
              that
      at each Drawdown Date the Agent has received, and found to be acceptable
      to it, any further opinions, consents, agreements and documents in
      connection with the Finance Documents which the Agent may, with the
      authorisation of the Majority Lenders, request by notice to the Borrower
      prior to the relevant Drawdown
Date.

            

    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    
      	
              9.2  

            	
              Waiver of conditions precedent.
      If the Majority Lenders, at their discretion, permit an Advance to
      be borrowed before certain of the conditions referred to in Clause 9.1 are
      satisfied, the Borrower shall ensure that those conditions are satisfied
      within 5 Business Days after the Drawdown Date relative to that Advance
      (or such longer period as the Agent may, with the authority of the
      Majority Lenders, specify).

            

    

     

     

    
      	
              10  

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    
      	
              10.1  

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

            

    

     

    
      	
              10.2  

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

            

    

     

    
      	
              10.3  

            	
              Share capital and ownership.
      The Borrower has an authorised share capital divided into
      42,484,593 common shares and 19,080,036 warrants each of $0.01 par value
      and issued in registered form.

            

    

     

    
      	
              10.4  

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

            

    

     

    
      	
              (a)  

            	
              to
      execute the Finance Documents to which it is a party;
  and

            

    

     

    
      	
              (b)  

            	
              to
      borrow under this Agreement and to make all the payments contemplated by,
      and to comply with, those Finance Documents to which the Borrower is a
      party.

            

    

     

    
      	
              10.5  

            	
              Consents in force. All
      the consents referred to in Clause 10.4 remain in force and nothing has
      occurred which makes any of them liable to
  revocation.

            

    

     

    
      	
              10.6  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              10.7  

            	
              No third party Security
      Interests. Without limiting the generality of Clause 9.6, at the
      time of the execution and delivery of each Finance
    Document:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    
      	
              10.8  

            	
              No conflicts. The
      execution by the Borrower of each Finance Document to which it is a party,
      and the borrowing by the Borrower of the Loan, and its compliance with
      each Finance Document to which it is a party will not involve or lead to a
      contravention of:

            

    

     

    
      	
              (a)  

            	
              any
      law or regulation; or

            

    

     

    
      	
              (b)  

            	
              the
      constitutional documents of the Borrower;
or

            

    

     

    
      	
              (c)  

            	
              any
      contractual or other obligation or restriction which is binding on the
      Borrower or any of its assets including, without limitation, its
      shareholding in the Owners.

            

    

     

    
      	
              10.9  

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

            

    

     

    
      	
              10.10  

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

            

    

     

    
      	
              10.11  

            	
              Information. All
      information which has been provided in writing by or on behalf of the
      Borrower or any Security Party to any Creditor Party in connection with
      any Finance Document satisfied the requirements of Clause 11.5; all
      audited and unaudited accounts which have been so provided satisfied the
      requirements of Clause 11.7; and there has been no material adverse change
      in the financial position or state of affairs of the Borrower, the Owners
      or any other member of the Group from that disclosed in the latest of
      those accounts.

            

    

     

    
      	
              10.12  

            	
              Validity
      and completeness of MOAs and Initial
  Charterparties.

            

    

     

    
      	
              (a)  

            	
              the
      copies of the MOAs and Initial Charterparties delivered to the Agent
      before the date of this Agreement are true and complete
      copies;

            

    

     

    
      	
              (b)  

            	
              each
      MOA and each Initial Charterparty constitutes valid, binding and
      enforceable obligations of the parties thereto respectively in accordance
      with its terms; and

            

    

     

    
      	
              (c)  

            	
              no
      amendments or additions to any MOA or Initial Charterparty have been
      agreed nor has any party thereto waived any of their respective rights
      under any MOA or Initial
Charterparty.

            

    

     

    
      	
              10.13  

            	
              No litigation. No legal
      or administrative action involving the Borrower, the Owners, the Guarantor
      or any other member of the Group (including, without limitation, any
      action relating to any alleged or actual breach of the ISM Code and the
      ISPS code and/or any action relating to any of the MOA’s) has been
      commenced or taken or, to the Borrower’s knowledge, is likely to be
      commenced or taken.

            

    

     

    
      	
              10.14  

            	
              No rebates etc. There is
      no agreement or understanding to allow or pay any rebate, premium,
      commission, discount or other benefit or payment (howsoever described) to
      the Owners, the Sellers or any third party in connection with the purchase
      by each Owner of the Ship to be owned by it, other than as disclosed to
      the Lenders in writing on or prior to the date of this Agreement
      (including, without limitation, any information disclosed in the Form F-1
      registration statement and prospectus filed with the US Securities and
      Exchange Commission, a copy of which has been delivered to the
      Lenders).

            

    

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    
      	
              10.15  

            	
              Compliance with certain
      undertakings. At the date of this Agreement, the Borrower is in
      compliance with Clauses 11.2, 11.4, 11.9 and
  11.13.

            

    

     

    
      	
              10.16  

            	
              Taxes paid. The Borrower
      has paid all taxes applicable to, or imposed on or in relation to the
      Borrower or its business.

            

    

     

    
      	
              10.17  

            	
              ISM Code and ISPS Code
      compliance. The Borrower will procure that the Owners and each
      Approved Manager obtain all necessary ISM Code Documentation and ISPS Code
      Documentation in connection with the Ships and comply with the ISM Code
      and the ISPS Code.

            

    

     

    
      	
              10.18  

            	
              No money laundering.
      Without prejudice to the generality of Clause 2.3, the Borrower
      confirms that, by entering into this Agreement and the other Finance
      Documents, it is acting on its own behalf and for its own account and it
      is obtaining the Loan for its own account. In relation to the borrowing by
      the Borrower of the Loan, the performance and discharge of its obligations
      and liabilities under this Agreement or any of the Finance Documents and
      the transactions and other arrangements effected or contemplated by this
      Agreement or any of the Documents to which the Borrower is a party, the
      Borrower is acting for its own account and that the foregoing will not
      involve or lead to a contravention of any law, official requirement or
      other regulatory measure or procedure which has been implemented to combat
      “money laundering” (as defined in Article 1 of the Directive (91/308/EEC)
      of the Council of the European
Community).

            

    

     

     

    
      	
              11  

            	
              GENERAL
      UNDERTAKINGS

            

    

     

    
      	
              11.1  

            	
              General. The Borrower
      undertakes with each Creditor Party to comply with the following
      provisions of this Clause 11 at all times during the Security Period
      except as the Agent may, with the authority of the Majority Lenders,
      otherwise permit.

            

    

     

    
      	
              11.2  

            	
              Title;
      negative pledge and pari passu ranking. The Borrower
  will:

            

    

     

    
      	
              (a)  

            	
              own
      (directly or indirectly) the entire beneficial interest in each Owner free
      from all Security Interests and other interests and rights of every kind,
      except for those created by the Finance
  Documents;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              11.3  

            	
              No disposal of assets. The
      Borrower will not transfer, lease or otherwise dispose
      of:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    
      	
              11.4  

            	
              Restriction on other
      liabilities or obligations to be incurred. The Borrower will not
      incur, and will procure that none of the Owners will, incur, any liability
      or obligation except liabilities and
  obligations:

            

    

     

    
      	
              (a)  

            	
              under
      the Finance Documents to which each is a
party;

            

    

     

    
      	
              (b)  

            	
              and
      (in the case of each Owner) under the MOA and the Initial Charterparty to
      which each is a party and incurred in the normal course of its business of
      owning, operating and chartering its Ship;
and

            

    

     

    
      	
              (c)  

            	
              (in
      the case of the Borrower) incurred in the normal course of its business
      (which shall include, without limitation, incurring Financial Indebtedness
      for the financing of the vessels owned by its subsidiaries guaranteeing
      the obligations of its subsidiaries and all other matters reasonably
      incidental thereto).

            

    

     

    
      	
              11.5  

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

            

    

     

    
      	
              11.6  

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

            

    

     

    
      	
              (a)  

            	
              as
      soon as possible, but in no event later than 180 days after the end of
      each Financial Year of the Borrower (commencing with the Financial Year
      ended 31 December 2007), the audited consolidated accounts of the Group
      for that Financial Year;

            

    

     

    
      	
              (b)  

            	
              as
      soon as possible, but in no event later than 90 days after the end of each
      quarterly period in each Financial Year of the Borrower (commencing with
      the financial quarter ending on 31 December 2007), the combined unaudited
      management accounts of the Group for that 3- month period certified in
      each case as to their correctness by the chief financial officer of the
      Borrower or the Corporate Guarantor;
and

            

    

     

    
      	
              (c)  

            	
              promptly
      after each request by the Agent, such further financial information about
      the Borrower, each Owner, the Group and/or the Ships including, but not
      limited to, charter arrangements, Financial Indebtedness, operating
      expenses and loan repayment profiles, as the Agent may
      require.

            

    

     

    
      	
              11.7  

            	
              Form of financial statements.
      All accounts (audited and unaudited) delivered under Clause 11.6
      will:

            

    

     

    
      	
              (a)  

            	
              be
      prepared in accordance with all applicable laws and
  GAAP;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              fully
      disclose or provide for all significant liabilities of the Group;
      and

            

    

     

    
      	
              (d)  

            	
              be
      accompanied by a certificate signed by the chief financial officer of the
      Borrower confirming that, as at the date of the certificate, no Event of
      Default has occurred and is
continuing.

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    
      	
              11.8  

            	
              Shareholder and creditor
      notices. The Borrower will send the Agent, at the same time as they
      are despatched, copies of all communications which are despatched to all
      of the Borrower’s shareholders or creditors or any class of
      them.

            

    

     

    
      	
              11.9  

            	
              Consents. The Borrower
      will maintain in force and promptly obtain or renew, and will promptly
      send certified copies to the Agent of, all consents
    required:

            

    

     

    
      	
              (a)  

            	
              for
      the Borrower and each Owner to perform its obligations under any Finance
      Document;

            

    

     

    
      	
              (b)  

            	
              for
      the validity or enforceability of any Finance
  Document;

            

    

     

    
      	
              (c)  

            	
              for
      each Owner to continue to own and operate the Ship owned by
      it,

            

    

     

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

     

    
      	
              11.10  

            	
              Maintenance
      of Security Interests. The Borrower
will:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              11.11  

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

            

    

     

    
      	
              11.12  

            	
              Principal place of business.
      The Borrower will maintain its place of business, and keep its
      corporate documents and records, at the address stated at Clause 28.2(a)
      and the Borrower shall not establish, or do anything as a result of which
      it would be deemed to have a place of business in the United Kingdom or
      the United States of America.

            

    

     

    
      	
              11.13  

            	
              Confirmation of no default.
      The Borrower will, within 2 Business Days after service by the
      Agent of a written request, serve on the Agent a notice which is signed by
      an officer or director of the Borrower and which (based on its most recent
      annual or interim financial
statements):

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    The Agent
may serve requests under this Clause 11.14 from time to time but only if asked
to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of
the Loan or (if no Advance has been made) Commitments exceeding 10 per cent. of
the Total Commitments; and this Clause 11.14 does not affect the Borrower’s
obligations under Clause 11.15.

     

    
      	
              11.14  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              11.15  

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

            

    

     

    
      	
              (a)  

            	
              to
      the Borrower, any Owner, any Ship, each Approved Manager or any other
      Security Party, the Insurances or the Earnings;
  or

            

    

     

    
      	
              (b)  

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

            

    

     

    which may
be requested by the Agent, the Security Trustee or any Lender at any
time.

     

    
      	
              11.16  

            	
              Provision of copies and
      translation of documents. The Borrower will supply the Agent with a
      sufficient number of copies of the documents referred to above to provide
      1 copy for each Creditor Party; and if the Agent so requires in respect of
      any of those documents, the Borrower will provide a certified English
      translation prepared by a translator approved by the
  Agent.

            

    

     

    
      	
              11.17  

            	
              No amendment to MOAs or Initial
      Charterparties. The Borrower shall procure that no Owner shall
      agree to an amendment or change or supplement to the MOA or the Initial
      Charterparty to which it is a
party.

            

    

     

    
      	
              11.18  

            	
              Ownership. The Borrower
      shall ensure that (a) it shall remain the direct or indirect owner of all
      of the limited liability company interests in each Owner and (b) there
      shall be no change in the legal and beneficial ownership of the shares in
      each Owner.

            

    

     

    
      	
              11.19  

            	
              General and administrative
      costs. The Borrower shall ensure that the payment of all the
      general and administrative costs of the Borrower and the Owners in
      connection with the ownership and operation of the Ships (including,
      without limitation, the payment of the management fees pursuant to the
      Management Agreements) shall be fully subordinated to the payment
      obligations of the Borrower and the Owners under this Agreement and the
      other Finance Documents throughout the Security
  Period.

            

    

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    
      	
              11.20  

            	
              Money laundering.
      Promptly upon the Agent’s request the Borrower will supply, or
      procure the supply of, such documentation and other evidence as is
      reasonably requested by the Agent in order for each Creditor Party to
      carry out and be satisfied with the results of all necessary “know your
      client” or other checks which it is required to carry out in relation to
      the transactions contemplated by the Finance Documents and to the identity
      of any parties to the Finance Documents (other than Creditor Parties) and
      their directors and officers.

            

    

     

     

    
      	
              12  

            	
              CORPORATE
      UNDERTAKINGS

            

    

     

    
      	
              12.1  

            	
              General. The Borrower
      also undertakes with each Creditor Party to comply with the following
      provisions of this Clause 12 at all times during the Security Period
      except as the Agent may, with the authority of the Majority Lenders,
      otherwise permit.

            

    

     

    
      	
              12.2  

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

            

    

     

    
      	
              12.3  

            	
              Negative
      undertakings. The Borrower will
not:

            

    

     

    
      	
              (a)  

            	
              change
      the nature of its business; or

            

    

     

    
      	
              (b)  

            	
              provide
      any form of credit or financial assistance
to:

            

    

     

    
      	
              (i)  

            	
              a
      person who is directly or indirectly interested in the Borrower’s share or
      loan capital; or

            

    

     

    
      	
              (ii)  

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

            

    

     

    or enter
into any transaction with or involving such a person or company on terms which
are, in any respect, less favourable to the Borrower than those which it could
obtain in a bargain made at arms’ length Provided that this shall not
prevent or restrict the Borrower from on-lending the Loan to the Owners;
or

     

    
      	
              (c)  

            	
              allow
      any Owner to open or maintain any account with any bank or financial
      institution except accounts with the Agent and the Security Trustee for
      the purpose of the Finance Documents;
or

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              12.4  

            	
              Subordination of rights of
      Borrower. All rights which the Borrower at any time has (whether in
      respect of the Loan or any other transaction) against any Owner or its
      assets shall be fully subordinated to the rights of the Creditor Parties
      under the Finance Documents; and in particular, the Borrower shall not
      during the Security Period:

            

    

     

    
      	
              (a)  

            	
              claim,
      or in a bankruptcy of any Owner or prove for any amount payable to the
      Borrower by an Owner, whether in respect of the Loan or any other
      transaction;

            

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              take
      or enforce any Security Interest for any such amount;
  or

            

    

     

    
      	
              (c)  

            	
              claim
      to set-off any such amount against any amount payable by the Borrower to
      any Owner.

            

    

     

    
      	
              12.5  

            	
              Financial Covenants. The
      Borrower undertakes that at all
times:

            

    

     

    
      	
              (a)  

            	
              the
      Market Value Adjusted Equity Ratio will not be less than 25 per cent.;
      and

            

    

     

    
      	
              (b)  

            	
              the
      members of the Group will maintain Liquid Funds in an amount of at least
      the higher of (i) $10,000,000 and (ii) $1,000,000 per Fleet
      Vessel.

            

    

     

    
      	
              12.6  

            	
              Compliance Check.
      Compliance with the undertakings contained in Clause 12.5 shall be
      determined as at 30 June and 31 December in each financial year of the
      Borrower by reference to, in the case of the compliance check as at 30
      June, the unaudited consolidated accounts of the Group for the first 2
      financial quarters in each financial year delivered by the Agent pursuant
      to this Agreement and for the compliance check as at 31 December in each
      financial year, the audited consolidated accounts for that financial year
      of the Group delivered to the Agent pursuant to this Agreement. At the
      same time as it delivers those consolidated accounts, the Borrower shall
      deliver to the Agent a Compliance Certificate signed by the chief
      financial officer of the Borrower.

            

    

     

     

    
      	
              13  

            	
              INSURANCE

            

    

     

    
      	
              13.1  

            	
              General. The Borrower
      also undertakes with each Creditor Party to procure that each Owner will
      comply with the following provisions of this Clause 13 at all times during
      the Security Period (after the Ship which is owned or to be owned by that
      Owner has been delivered to it under the relevant MOA) except as the Agent
      may, with the authority of the Majority Lenders, otherwise
      permit.

            

    

     

    
      	
              13.2  

            	
              Maintenance of obligatory
      insurances. The Borrower shall procure that each Owner keep the
      Ship owned by it insured at the expense of that Owner
    against:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              war
      risks (including protection and indemnity war
  risks);

            

    

     

    
      	
              (c)  

            	
              in
      the case of protection and indemnity war risks, in an amount equal to the
      amount for which the war risks under the hull policies are effected
      (including, without limitation, protection and indemnity war risks in
      excess of the amount of war risks
(hull));

            

    

     

    
      	
              (d)  

            	
              protection
      and indemnity risks in excess of the limit of cover for oil pollution
      liability risks included within the protection and indemnity risks;
      and

            

    

     

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

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    
      	
              13.3  

            	
              Terms of obligatory insurances.
      The Borrower shall procure that each Owner shall effect such
      insurances:

            

    

     

    
      	
              (a)  

            	
              in
      Dollars;

            

    

     

    
      	
              (b)  

            	
              in
      the case of fire and usual marine risks and war risks, in an amount on an
      agreed value basis at least the greater of (i) an amount, which when
      aggregated with the insured value of the other Ships at the relevant time
      subject to a Mortgage, is equal to 110 per cent. of the Loan and (ii) the
      Market Value of the Ship owned by it;
and

            

    

     

    
      	
              (c)  

            	
              in
      the case of oil pollution liability risks, for an aggregate amount equal
      to the highest level of cover from time to time available under basic
      protection and indemnity club entry (with the international group of
      protection and indemnity clubs) and the international marine insurance
      market (currently $1,000,000,000);

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              on
      approved terms; and

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              13.4  

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

            

    

     

    
      	
              (a)  

            	
              name
      the Security Trustee as sole loss payee with such directions for payment
      as the Security Trustee may
specify;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              provide
      that the insurers shall waive, to the fullest extent permitted by English
      law, their entitlement (if any) (whether by statute, common law, equity,
      or otherwise) to be subrogated to the rights and remedies of the Security
      Trustee in respect of any rights or interests (secured or not) held by or
      available to the Security Trustee in respect of the Secured Liabilities,
      until the Secured Liabilities shall have been fully repaid and discharged,
      except that the insurers shall not be restricted by the terms of this
      paragraph (d) from making personal claims against persons (other than the
      relevant Owner or any Creditor Party) in circumstances where
      the insurers have fully discharged their liabilities and obligations under
      the relevant obligatory insurances;

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              provide
      that the Security Trustee may make proof of loss if the relevant Owner
      fails to do so; and

            

    

     

    
      	
              (f)  

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

            

    

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    
      	
              13.5  

            	
              Renewal of obligatory
      insurances. The Borrower shall procure that each Owner
      shall:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (b)  

            	
              at
      least 14 days before the expiry of any obligatory insurance, renew the
      insurance in accordance with the Security Trustee’s approval pursuant to
      paragraph (a); and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              13.6  

            	
              Copies of policies; letters of
      undertaking. The Borrower shall procure that each Owner shall
      ensure that all approved brokers provide the Security Trustee with copies
      of all policies relating to the obligatory insurances which they effect or
      renew and of a letter or letters of undertaking in a form required by the
      Majority Lenders and including undertakings by the approved brokers
      that:

            

    

     

    
      	
              (a)  

            	
              they
      will have endorsed on each policy, immediately upon issue, a loss payable
      clause and a notice of assignment complying with the provisions of Clause
      13.4;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              they
      will notify the Security Trustee if any person other than the Owner is
      named as assured or co-assured in any of the obligatory insurances and
      shall procure that, upon the written request of the Security Trustee, such
      additional assured or co-assured executes in favour of the Security an
      assignment (in such form as the Lenders may approve or require) of its
      interest in the obligatory insurances;
and

            

    

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    
      	
              (f)  

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

            

    

     

    
      	
              13.7  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              13.8  

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

            

    

     

    
      	
              13.9  

            	
              Payment of premiums. The
      Borrower shall procure that each Owner shall punctually pay all premiums
      or other sums payable in respect of the obligatory insurances and produce
      all relevant receipts when so required by the Security
      Trustee.

            

    

     

    
      	
              13.10  

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

            

    

     

    
      	
              13.11  

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

            

    

     

    
      	
              13.12  

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

            

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    
      	
              (a)  

            	
              each
      Owner shall take all necessary action and comply with all requirements
      which may from time to time be applicable to the obligatory insurances,
      and (without limiting the obligation contained in Clause 13.7(c) above)
      ensure that the obligatory insurances are not made subject to any
      exclusions or qualifications to which the Security Trustee has not given
      its prior approval;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              13.13  

            	
              Alteration to terms of
      insurances. The Borrower shall procure that no Owner shall either
      make or agree to any alteration to the terms of any obligatory insurance
      or waive any right relating to any obligatory insurance without the prior
      written consent of the Security
Trustee.

            

    

     

    
      	
              13.14  

            	
              Settlement of claims.
      The Borrower shall procure that no Owner shall settle, compromise
      or abandon any claim under any obligatory insurance for Total Loss or for
      a Major Casualty, and shall do all things necessary and provide all
      documents, evidence and information to enable the Security Trustee to
      collect or recover any moneys which at any time become payable in respect
      of the obligatory insurances.

            

    

     

    
      	
              13.15  

            	
              Provision of copies of
      communications. The Borrower shall procure that each Owner shall
      provide the Security Trustee, at the time of each such communication,
      copies of all written communications between that Owner
    and:

            

    

     

    
      	
              (a)  

            	
              the
      approved brokers; and

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (i)  

            	
              that
      Owner’s obligations relating to the obligatory insurances including,
      without limitation, all requisite declarations and payments of additional
      premiums or calls; and

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    
      	
              13.16  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    and the
Borrower shall, within a reasonable time following the Security Trustee’s
written demand, indemnify the Security Trustee in respect of all fees and other
expenses incurred by or for the account of the Security Trustee in connection
with any such report as is referred to in paragraph (a) above.

     

    
      	
              13.17  

            	
              Mortgagee’s interest and
      additional peril insurances. The Security Trustee shall be entitled
      from time to time to effect, maintain and renew all or any of the
      following insurances in such amounts, on such terms, through such insurers
      and generally in such manner as the Security Trustee may from time to time
      consider appropriate:

            

    

     

    
      	
              (a)  
      

            	
              a
      mortgage’s interest insurance in an amount equal to 110% per cent. of the
      Loan; and

            

    

     

    
      	
               
      

            	
              (b)    
      

            	
              a
      mortgage’s interest additional perils (pollution) insurance in an amount
      equal to 110 per cent. of the Loan,

            

    

     

    and the
Borrower shall upon demand fully indemnify the Security Trustee in respect of
all premiums and other expenses which are incurred in connection with or with a
view to effecting, maintaining or renewing any such insurance or dealing with,
or considering, any matter arising out of any such insurance.

     

    
      	
              13.18  

            	
              Review of insurance
      requirements. The Security Trustee shall be entitled to review the
      requirements of this Clause 13 from time to time in order to take account
      of any changes in circumstances after the date of this Agreement which
      are, in the opinion of the Majority Lenders, significant and capable of
      affecting the Owners or the Ships and their insurance (including, without
      limitation, changes in the availability or the cost of insurance coverage
      or the risks to which the Owners may be subject), and may appoint
      insurance consultants in relation to this review at the cost of the
      Borrower.

            

    

     

    
      	
              13.19  

            	
              Modification of insurance
      requirements. The Security Trustee shall notify the Borrower of any
      proposed modification under Clause 13.18 to the requirements of this
      Clause 13 which the Majority Lenders, acting upon the advice of their
      insurance consultants, consider appropriate in the circumstances, and such
      modification shall take effect on and from the date it is notified in
      writing to the Borrower as an amendment to this Clause 13 and shall bind
      the Borrower accordingly.

            

    

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    
      	
              13.20  

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

            

    

     

     

    
      	
              14  

            	
              SHIP
      COVENANTS

            

    

     

    
      	
              14.1  

            	
              General. The Borrower
      also undertakes with each Creditor Party to procure that each Owner shall
      comply with the following provisions of this Clause 14 at all times during
      the Security Period (after the Ship which is owned or to be owned by that
      Owner has been delivered to it under the relevant MOA) except as the
      Agent, with the authority of the Majority Lenders, may otherwise
      permit.

            

    

     

    
      	
              14.2  

            	
              Ship’s name and registration.
      The Borrower shall procure that each Owner
  shall:

            

    

     

    
      	
              (a)  

            	
              keep
      the Ship owned by it registered in its ownership under an Approved
      Flag;

            

    

     

    
      	
              (b)  

            	
              not
      change the name or port of registry of any Ship;
  and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              14.3  

            	
              Repair and classification.
      The Borrower shall procure that each Owner shall keep the Ship
      owned by it in a good and safe condition and state of
    repair:

            

    

     

    
      	
              (a)  

            	
              consistent
      with first-class ship ownership and management
  practice;

            

    

     

    
      	
              (b)  

            	
              so
      as to maintain the highest class with a first-class classification society
      which is a member of IACS acceptable to the Agent free of overdue
      recommendations and conditions of such classification society;
      and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              14.4  

            	
              Classification society
      undertaking. The Borrower shall procure that each Owner shall
      instruct the classification society referred to in Clause 14.3(b) (and
      procure that the classification society undertakes with the Security
      Trustee):

            

    

     

    
      	
              (a)  

            	
              to
      send to the Security Trustee, following receipt of a written request from
      the Security Trustee, certified true copies of all original class records
      held by the classification society in relation to the Ship owned by that
      Owner;

            

    

     

    
      	
              (b)  

            	
              to
      allow the Security Trustee (or its agents), at any time and from time to
      time, to inspect the original class and related records of that Owner and
      its Ship at the offices of the classification society and to take copies
      of them;

            

    

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    
      	
              (c)  

            	
              to
      notify the Security Trustee immediately in writing if the classification
      society:

            

    

     

    
      	
              (i)  

            	
              receives
      notification from the Owner or any person that the Ship’s classification
      society is to be changed; or

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (d)  

            	
              following
      receipt of a written request from the Security
  Trustee:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              if
      the Owner is in default of any of its contractual obligations or
      liabilities to the classification society, to specify to the Security
      Trustee in reasonable detail the facts and circumstances of such default,
      the consequences thereof, and any remedy period agreed or allowed by the
      classification society.

            

    

     

    
      	
              14.5  

            	
              Modification. The
      Borrower shall procure that no Owner shall make any modification or
      repairs to, or replacement of, the Ship owned by it or equipment installed
      on her which would or might materially alter the structure, type or
      performance characteristics of the Ship or materially reduce her
      value.

            

    

     

    
      	
              14.6  

            	
              Removal of parts. The
      Borrower shall procure that no Owner shall remove any material part of the
      Ship owned by it, or any item of equipment installed on, the Ship unless
      the part or item so removed is forthwith replaced by a suitable part or
      item which is in the same condition as or better condition than the part
      or item removed, is free from any Security Interest or any right in favour
      of any person other than the Security Trustee and becomes on installation
      on the Ship the property of the Owner and subject to the security
      constituted by the Mortgage and if applicable, the Deed of Covenant,
      relative to the Ship Provided that the Owner
      may install equipment owned by a third party if the equipment can be
      removed without any risk of damage to the
Ship.

            

    

     

    
      	
              14.7  

            	
              Surveys. The Borrower
      shall procure that each Owner shall submit the Ship owned by it regularly
      to all periodical or other surveys which may be required for
      classification purposes and, if so required by the Majority Lenders,
      provide the Security Trustee (at the expense of the Borrower) with copies
      of all survey reports.

            

    

     

    
      	
              14.8  

            	
              Inspection. The Borrower
      shall procure that each Owner shall permit the Security Trustee (by
      surveyors or other persons appointed by it for that purpose) to board the
      Ship owned by it at all reasonable times to inspect her condition or to
      satisfy themselves about proposed or executed repairs and shall afford all
      proper facilities for such inspections. All fees and expenses incurred in
      relation to the appointment of surveyors shall be for the account of the
      Borrower.

            

    

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    
      	
              14.9  

            	
              Prevention of and release from
      arrest. The Borrower shall procure that each Owner shall promptly
      discharge:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              all
      other outgoings whatsoever in respect of the Ship, her Earnings or her
      Insurances

            

    

     

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

     

    
      	
              14.10  

            	
              Compliance with laws etc.
      The Borrower shall procure that each Owner and each Approved
      Manager shall:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              in
      the event of hostilities in any part of the world (whether war is declared
      or not), not cause or permit the Ship to enter or trade to any zone which
      is declared a war zone by any government or by the Ship’s war risks
      insurers unless the Owner has (at its expense) effected any special,
      additional or modified insurance cover required for it to enter or trade
      to any war zone.

            

    

     

    
      	
              14.11  

            	
              Provision of information.
      The Borrower shall procure that each Owner shall promptly provide
      the Security Trustee with any information which the Security Trustee
      request regarding:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              any
      towages and salvages;

            

    

     

    
      	
              (e)  

            	
              its
      compliance or the compliance of the Ship with the ISM Code and the ISPS
      Code,

            

    

     

    and, upon
the Security Trustee’s request, provide copies of any current charter relating
to the Ship and of any current charter guarantee, and copies of the ISM Code
Documentation and the ISPS Code Documentation.

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    
      	
              14.12  

            	
              Notification of certain events.
      The Borrower shall procure that each Owner shall immediately notify
      the Security Trustee by letter of:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              any
      arrest or detention of the Ship, any exercise or purported exercise of any
      lien on the Ship or her Earnings or any requisition of the Ship for
      hire;

            

    

     

    
      	
              (e)  

            	
              any
      intended dry docking of the Ship;

            

    

     

    
      	
              (f)  

            	
              any
      Environmental Claim made against that Owner or in connection with the
      Ship, or any Environmental
Incident;

            

    

     

    
      	
              (g)  

            	
              any
      claim for breach of the ISM Code or the ISPS Code being made against the
      Owner, each Approved Manager or otherwise in connection with the Ship;
      or

            

    

     

    
      	
              (h)  

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

            

    

     

    and the
Borrower shall keep the Security Trustee advised in writing on a regular basis
and in such detail as the Security Trustee shall require of the Owners’, the
Approved Manager’s or any other person’s response to any of those events or
matters.

     

    
      	
              14.13  

            	
              Restrictions on chartering,
      appointment of managers etc. The Borrower shall procure that no
      Owner shall:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              other
      than the relevant Initial Charterparty or Future Charterparty, enter into
      any time or consecutive voyage charter in respect of the Ship owned by it
      for a term which exceeds, or which by virtue of any optional extensions
      may exceed, 12 months;

            

    

     

    
      	
              (c)  

            	
              change
      the terms on which the Ship owned by it is employed or the identity of the
      person by whom that Ship is
employed;

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    
      	
              (h)  

            	
              put
      the Ship owned by it into the possession of any person for the purpose of
      work being done upon her in an amount exceeding or likely to exceed
      $250,000 (or the equivalent in any other currency) unless that person has
      first given to the Security Trustee and in terms satisfactory to it a
      written undertaking not to exercise any lien on the Ship or her Earnings
      for the cost of such work or
otherwise.

            

    

     

    
      	
              14.14  

            	
              Notice of Mortgage. The
      Borrower shall procure that each Owner shall keep the Mortgage applicable
      to the Ship owned by it registered against that Ship as a valid first
      priority or preferred mortgage, carry on board the Ship a certified copy
      of the Mortgage and place and maintain in a conspicuous place in the
      navigation room and the Master’s cabin of the Ship a framed printed notice
      stating that the Ship is mortgaged by the Owner to the Security
      Trustee.

            

    

     

    
      	
              14.15  

            	
              Sharing of Earnings. The
      Borrower shall procure that no Owner
shall:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              enter
      into any agreement or arrangement for the postponement of any date on
      which any Earnings are due; the reduction of the amount of any Earnings or
      otherwise for the release or adverse alteration of any right of that Owner
      to any Earnings; or

            

    

     

    
      	
              (c)  

            	
              enter
      into any agreement or arrangement for the release of, or adverse
      alteration to, any guarantee or Security Interest relating to any
      Earnings.

            

    

     

    
      	
              14.16  

            	
              Charterparty Assignment.
      If any Owner enters into any Future Charterparty in respect of its
      Ship, the Borrower shall, at the request of the Agent, procure that the
      Owner executes in favour of the Security Trustee a Charterparty Assignment
      in respect of that Charterparty, and shall deliver to the Agent such other
      documents equivalent to those referred to at paragraphs 3,4 and 5 of
      Schedule 4, Part A as the Agent may
require.

            

    

     

     

    
      	
              15  

            	
              SECURITY
      COVER

            

    

     

    
      	
              15.1  

            	
              Provision of additional
      security cover; prepayment of Loan. The Borrower undertakes with
      each Creditor Party that if the Agent notifies the Borrower
      that:

            

    

     

    
      	
              (a)  

            	
              the
      aggregate Market Values of the Ships;
plus

            

    

     

    
      	
              (b)  

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

            

    

     

    is below
the Relevant Percentage of the Loan, the Borrower will, within 14 days after the
date on which the Agent’s notice is served, either:

     

    
      	
              (i)  

            	
              provide,
      or ensure that a third party provides, additional security which, in the
      opinion of the Majority Lenders, has a net realisable value at least equal
      to the shortfall and which, if it consists of or includes a Security
      Interest, covers such asset or assets and is documented in such terms as
      the Agent may, with authorisation from the Majority Lenders, approve or
      require; or

            

    

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    
      	
              (ii)  

            	
              prepay
      in accordance with Clause 8 such part (at least) of the Loan as will
      eliminate the shortfall,

            

    

     

    where
“Relevant Percentage”
means:

     

    
      	
              (A)  

            	
              for
      the period commencing on the date of this Agreement and ending on the
      third anniversary thereof, 125 per cent;
and

            

    

     

    
      	
              (B)  

            	
              at
      all times thereafter, 135 per cent.

            

    

     

    
      	
              15.2  

            	
              Meaning of additional security.
      In Clause 15.1 “security” means a
      Security Interest over an asset or assets (including, without limitation a
      vessel (other than a Ship)) (whether securing the Borrower’s liabilities
      under the Finance Documents or a guarantee in respect of those
      liabilities), or a guarantee, letter of credit, cash deposit or other
      security in respect of the Borrower’s liabilities under the Finance
      Documents.

            

    

     

    
      	
              15.3  

            	
              Requirement for additional
      documents. The Borrower shall not be deemed to have complied with
      Clause 15.1 (i) above until the Agent has received in connection with the
      additional security certified copies of documents of the kinds referred to
      in paragraphs 3, 4 and 5 of Schedule 4, Part A and such legal opinions in
      terms acceptable to the Majority Lenders from such lawyers as they may
      select.

            

    

     

    
      	
              15.4  

            	
              Valuation of Ship. The
      market value of a Ship at any date is that shown by valuation of that Ship
      prepared:

            

    

     

    
      	
              (a)  

            	
              as
      at a date not more than 15 days
previously;

            

    

     

    
      	
              (b)  

            	
              by
      an independent ship sale and purchase broker appointed or approved by the
      Agent;

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              15.5  

            	
              Value of additional security.
      The net realisable value of any additional security which is
      provided under Clause 15.1 and which consists of a Security Interest over
      a vessel shall be that shown by a valuation complying with the
      requirements of Clause 15.4.

            

    

     

     

    
      	
              15.6  

            	
              Valuations binding. Any
      valuation under Clause 15.1(i), 15.4 or 15.5 shall be binding and
      conclusive as regards the Borrower (save in the case of manifest error) as
      shall be any valuation
      which the Majority Lenders make of a security which does not consist of or
      include a Security Interest.

            

    

     

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    
      	
              15.7  

            	
              Provision of information.
      The Borrower shall promptly provide the Agent and any Independent
      Ship sale and purchase broker or expert acting under Clause 15.4 or 15.5
      with any information which the Agent or broker or expert may request for
      the purposes of the valuation; and, if the Borrower fails to provide the
      information within 3 Business Days following such request, the valuation
      may be made on any basis and assumptions which the independent ship sale
      and purchase broker or the Majority Lenders (or the expert appointed by
      them) consider prudent.

            

    

     

    
      	
              15.8  

            	
              Payment of valuation expenses.
      Without prejudice to the generality of the Borrower’s obligations
      under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the
      Agent the amount of the fees and expenses of the broker instructed by the
      Agent under this Clause .

            

    

     

     

    
      	
              16  

            	
              PAYMENTS
      AND CALCULATIONS

            

    

     

    
      	
              16.1  

            	
              Currency and method of payments. All
      payments to be made:

            

    

     

    
      	
              (a)  

            	
              by
      the Lenders to the Agent; or

            

    

     

    
      	
              (b)  

            	
              by
      the Borrower to the Agent, the Security Trustee or any
    Lender

            

    

     

    under a
Finance Document shall be made to the Agent or to the Security Trustee, in the
case of an amount payable to it:

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

            	
              if
      in Dollars, to the account of the Agent at Commerzbank AG, New York Branch
      (account number 938026262; SWIFT Code: COBADEFP208 under reference Star
      Bulk Carriers Corp. - US$120 million facility, or to such other account
      with such other bank as the Agent may from time to time notify to the
      Borrower and the other Creditor Parties;
and

            

    

     

    
      	
              (iv)  

            	
              in
      the case of an amount payable to the Security Trustee, to such account as
      it may from time to time notify to the Borrower and the other Creditor
      Parties.

            

    

     

    
      	
              16.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    
      	
              16.3  

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

            

    

     

    
      	
              16.4  

            	
              Distribution of payments to
      Creditor Parties. Subject to Clauses 16.5, 16.6 and 16.7 any amount
      received by the Agent under a Finance Document for distribution or
      remittance to a Lender, or the Security Trustee shall be made available by
      the Agent to that Lender or, as the case may be, or the Security Trustee
      by payment, with funds having the same value as the funds received, to
      such account as the Lender, or the Security Trustee may have notified to
      the Agent not less than 5 Business Days
  previously.

            

    

     

    
      	
              16.5  

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

            

    

     

    
      	
              16.6  

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

            

    

     

    
      	
              16.7  

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

            

    

     

    
      	
              (a)  

            	
              refund
      the sum in full to the Agent; and

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              16.8  

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

            

    

     

    
      	
              16.9  

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

            

    

     

    
      	
              16.10  

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

            

    

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    
      	
              16.11  

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

            

    

     

     

    
      	
              17  

            	
              APPLICATION
      OF RECEIPTS

            

    

     

    
      	
              17.1  

            	
              Normal order of application.
      Except as any Finance Document may otherwise provide, any sums
      which are received or recovered by any Creditor Party under or by virtue
      of any Finance Document shall be
applied:

            

    

     

    
      	
              (a)  

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

            

    

     

    Documents
in the following order and proportions:

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              secondly,
      in or towards satisfaction pro rata of any and all amounts of interest or
      default interest payable to the Creditor Parties under the Finance
      Documents; and

            

    

     

    
      	
              (iii)  

            	
              thirdly,
      in or towards satisfaction of the
Loan;

            

    

     

    
      	
              (b)  

            	
              SECONDLY:
      in retention of an amount equal to any amount not then due and payable
      under any Finance Document but which the Agent, by notice to the Borrower,
      the Security Parties and the other Creditor Parties, states in its opinion
      will or may become due and payable in the future and, upon those amounts
      becoming due and payable, in or towards satisfaction of them in accordance
      with the foregoing provisions of this Clause;
  and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              17.2  

            	
              Variation of order of
      application. The Agent may, with the authorisation of the Majority
      Lenders by notice to the Borrower, the Security Parties and the other
      Creditor Parties provide for a different manner of application from that
      set out in Clause 17.1 either as regards a specified sum or sums or as
      regards sums in a specified category or
  categories.

            

    

     

    
      	
              17.3  

            	
              Notice of variation of order of
      application. The Agent may give notices under Clause 17.2 from time
      to time; and such a notice may be stated to apply not only to sums which
      may be received or recovered in the future, but also to any sum which has
      been received or recovered on or after the third Business Day before the
      date on which the notice is served.

            

    

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    
      	
              17.4  

            	
              Appropriation rights
      overridden. This Clause 17 and any notice which the Agent gives
      under Clause 17.3 shall override any right of appropriation possessed, and
      any appropriation made, by the Borrower or any Security
    Party.

            

    

     

     

    
      	
              18  

            	
              APPLICATION
      OF EARNINGS

            

    

     

    
      	
              18.1  

            	
              Payment of Earnings. The
      Borrower undertakes with each Creditor Party to ensure that throughout the
      Security Period (subject only to provisions of the relevant General
      Assignment), all the Earnings of each Ship are paid to the Earnings
      Account for that Ship.

            

    

     

    
      	
              18.2  

            	
              Location of accounts.
      The Borrower shall promptly:

            

    

     

    
      	
              (a)  

            	
              comply,
      and ensure that the Owners comply, with any requirement of the Agent as to
      the location or re-location of any Earnings
  Account;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              18.3  

            	
              Debits for expenses etc.
      The Agent shall be authorised by the Borrower (but not obliged)
      from time to time to debit the Earnings Account without prior notice in
      order to discharge any amount due and payable under Clause 20 or 21 to a
      Creditor Party or payment of which any Creditor Party has become entitled
      to demand under Clause 20 or 21.

            

    

     

    
      	
              18.4  

            	
              Borrower’s obligations
      unaffected. The provisions of this Clause 18 do not
      affect:

            

    

     

    
      	
              (a)  

            	
              the
      liability of the Borrower to make payments of principal and interest on
      the due dates; or

            

    

     

    
      	
              (b)  

            	
              any
      other liability or obligation of the Borrower or any Security Party under
      any Finance Document.

            

    

     

     

    
      	
              19  

            	
              EVENTS
      OF DEFAULT

            

    

     

    
      	
              19.1  

            	
              Events of Default. An
      Event of Default occurs if:

            

    

     

    
      	
              (a)  

            	
              the
      Borrower or any Security Party fails to pay when due or (if so payable) on
      demand within 2 Business Days of such demand any sum payable under a
      Finance Document or under any document relating to a Finance Document
      unless such failure is due to a bank payment transmission error;
      or

            

    

     

    
      	
              (b)  

            	
              any
      breach occurs of Clause 9.2, 11.2, 11.3, 11.17, 12.2, 12.3, 12.5, 13.2,
      15.1 or 18.1; or

            

    

     

    
      	
              (c)  

            	
              any
      breach by the Borrower or any Security Party occurs of any provision of a
      Finance Document (other than a breach covered by paragraphs (a) or (b)
      above) if, in the opinion of the Majority Lenders, such default is capable
      of remedy, and such default continues unremedied 10 Business Days after
      written notice from the Agent requesting action to remedy the same;
      or

            

    

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

            	
              any
      of the following occurs in relation to any Financial Indebtedness of a
      Relevant Person (exceeding, in the case of the Borrower, $1,000,000 in
      aggregate (or the equivalent in any other
  currency)):

            

    

     

    
      	
              (i)  

            	
              any
      Financial Indebtedness of a Relevant Person is not paid when due or, if so
      payable, on demand; or

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

    
      	
              (v)  

            	
              any
      Security Interest securing any Financial Indebtedness of a Relevant Person
      becomes enforceable; or

            

    

     

    
      	
              (g)  

            	
              any
      of the following occurs in relation to a Relevant
  Person:

            

    

     

    
      	
              (i)  

            	
              a
      Relevant Person becomes, in the opinion of the Majority Lenders, unable to
      pay its debts as they fall due; or

            

    

     

    
      	
              (ii)  

            	
              any
      assets of a Relevant Person are subject to any form of execution,
      attachment, arrest, sequestration or distress in respect of a sum of, or
      sums aggregating, $1,000,000 or more or the equivalent in another
      currency; or

            

    

     

    
      	
              (iii)  

            	
              any
      administrative or other receiver is appointed over any asset of a Relevant
      Person; or

            

    

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    
      	
              (iv)  

            	
              a
      Relevant Person makes any formal declaration of bankruptcy or any formal
      statement to the effect that it is insolvent or likely to become
      insolvent, or a winding up or administration order is made in relation to
      a Relevant Person, or the members or directors of a Relevant Person pass a
      resolution to the effect that it should be wound up, placed in
      administration or cease to carry on business, save that this paragraph
      does not apply to a fully solvent winding up of a Relevant Person other
      than the Borrower which is, or is to be, effected for the purposes of an
      amalgamation or reconstruction previously approved by the Majority Lenders
      and effected not later than 3 months after the commencement of the winding
      up; or

            

    

     

    
      	
              (v)  

            	
              a
      petition is presented in any Pertinent Jurisdiction for the winding up or
      administration, or the appointment of a provisional liquidator, of a
      Relevant Person; or

            

    

     

    
      	
              (vi)  

            	
              a
      Relevant Person petitions a court, or presents any proposal for, any form
      of judicial or non-judicial suspension or deferral of payments,
      reorganisation of its debt {or certain of its debt) or arrangement with
      all or a substantial proportion (by number or value) of its creditors or
      of any class of them or any such suspension or deferral of payments,
      reorganisation or arrangement is effected by court order, contract or
      otherwise; or

            

    

     

    
      	
              (vii)  

            	
              any
      meeting of the members or directors of a Relevant Person is summoned for
      the purpose of considering a resolution or proposal to authorise or take
      any action of a type described in paragraphs (iii), (iv), (v) or {vi)
      above; or

            

    

     

    
      	
              (viii)  

            	
              in
      a Pertinent Jurisdiction other than England, any event occurs or any
      procedure is commenced which, in the opinion of the Majority Lenders, is
      similar to any of the foregoing; or

            

    

     

    
      	
              (h)  

            	
              the
      Borrower or any Security Party ceases or suspends carrying on or changes
      the nature of its business or a part of its business which, in the opinion
      of the Majority Lenders, is material in the context of this Agreement;
      or

            

    

     

    
      	
              (i)  

            	
              it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (j)  

            	
              any
      consent necessary to enable any Owner to own, operate or charter a Ship or
      to enable the Borrower or any Security Party to comply with any provision
      which the Majority Lenders consider material of a Finance Document is not
      granted, expires without being renewed, is revoked or becomes liable to
      revocation or any condition of such a consent is not fulfilled;
      or

            

    

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    
      	
              (k)  

            	
              without
      the prior consent of the Agent (acting upon the instructions of the
      Majority Lenders), Mr. Prokopios Tsirigakis ceases to be, at any time
      during the Security Period, the Chief Executive Officer of the Borrower;
      or

            

    

     

    
      	
              (l)  

            	
              without
      the prior consent of the Agent (acting upon the instructions of the
      Majority Lenders), Mr. Petros Pappas ceases to be, at any time during the
      Security Period, the Non-Executive Co-Chairman of the Borrower;
      or

            

    

     

    
      	
              (m)  

            	
              without
      the prior written consent of the Majority Lenders, a change has occurred
      after the date of this Agreement in the ownership of any of the shares in
      any Owner or in the ultimate control of the voting rights attaching to any
      of those shares; or

            

    

     

    
      	
              (n)  

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

            

    

     

    
      	
              (o)  

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

            

    

     

    
      	
              (p)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              any
      accident or other event involving any Ship or another vessel owned,
      chartered or operated by a Relevant
Person;

            

    

     

    in the
light of which the Majority Lenders consider that there is a significant risk
that the Borrower or any Security Party is, or will later become, unable to
discharge its liabilities under the Finance Documents as they fall
due.

     

    
      	
              19.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    
      	
              (b)  

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

            

    

     

    
      	
              19.3  

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

            

    

     

    
      	
              19.4  

            	
              Acceleration of Loan. On
      the service of a notice under paragraph (a)(ii) of Clause 19.2, the Loan,
      all accrued interest and all other amounts accrued or owing from the
      Borrower or any Security Party under this Agreement and every other
      Finance Document shall become immediately due and payable or, as the case
      may be, payable on demand.

            

    

     

    
      	
              19.5  

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

            

    

     

    
      	
              19.6  

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

            

    

     

    
      	
              19.7  

            	
              Lender’s rights unimpaired.
      Nothing in this Clause shall be taken to impair or restrict the
      exercise of any right given to individual Lenders under a Finance Document
      or the general law; and, in particular, this Clause is without prejudice
      to Clause 3.1.

            

    

     

    
      	
              19.8  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    
      	
              19.9  

            	
              Relevant Persons. In
      this Clause 19 “a
      Relevant Person” means the Borrower, a Security Party and any other
      member of the Group (but excluding any company which is dormant and the
      value of whose gross assets is $50,000 or
less).

            

    

     

    
      	
              19.10  

            	
              Interpretation. In
      Clause 19.1(f) references to an event of default or a termination event
      include any event, howsoever described, which is similar to an event of
      default in a facility
      agreement or a termination event in a finance lease; and in Clause 19.1(g)
      “petition” includes an
application.

            

    

     

     

     

    
      	
              20  

            	
              FEES
      AND EXPENSES

            

    

     

    
      	
              20.1  

            	
              Management and commitment fees.
      The Borrower shall pay to the
Agent:

            

    

     

    
      	
              (a)  

            	
              a
      management fee equal to 0.50 per cent. of the maximum amount of the Loan
      ($600,000), in two equal instalments, the first of which shall be paid on
      the date of this Agreement and the second to be paid on 31 December 2007;
      and

            

    

     

    
      	
              (b)  

            	
              a
      commitment fee for distribution among the Lenders pro rata to their
      Commitments at the rate of 0.35 per cent. per annum on the undrawn amount
      of the Total Commitments from (and including) 27 December 2007, being the
      date on which the shareholders of the Borrower approved the acquisition of
      the Ships up to and including the earlier of (A) the final Drawdown Date
      and (B) the last day of the Availability Period, such fee to be paid
      semi-annually in arrears and on the last day of such
    period.

            

    

     

    
      	
              20.2  

            	
              Costs of negotiation,
      preparation etc. The Borrower shall pay to the Agent on its demand
      the amount of all expenses incurred by the Lenders, the Agent or the
      Security Trustee in connection with the negotiation, preparation,
      execution or registration of any Finance Document or any related document
      or with any transaction contemplated by a Finance Document or a related
      document (including, without limitation, any legal fees or
      expenses).

            

    

     

    
      	
              20.3  

            	
              Costs of variations,
      amendments, enforcement etc. The Borrower shall pay to the Agent,
      on the Agent’s demand, the amount of all expenses (including, without
      limitation, any legal fees or expenses) incurred by a Lender in connection
      with:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              the
      valuation of any security provided or offered under Clause 15.8 or any
      other matter relating to such
security;

            

    

     

    
      	
              (d)  

            	
              such
      circumstances where the Agent, in its absolute opinion, considers that
      there has been a material change to the insurances in respect of a Ship,
      the review of the insurances of that Ship pursuant to Clause
      13.18;

            

    

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    
      	
              (e)  

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

            

    

     

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

     

    
      	
              20.4  

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

            

    

     

    
      	
              20.5  

            	
              Certification of amounts.
      A notice which is signed by two officers of a Creditor Party, which
      states that a specified amount, or aggregate amount, is due to that
      Creditor Party under this Clause 20 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall be prima facie
      evidence that the amount, or aggregate amount, is
  due.

            

    

     

     

    
      	
              21  

            	
              INDEMNITIES

            

    

     

    
      	
              21.1  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              any
      failure (for whatever reason) by the Borrower to make payment of any
      amount due under a Finance Document on the due date or, if so payable, on
      demand (after giving credit for any default interest paid by the Borrower
      on the amount concerned under Clause
7);

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

    
      	
              21.2  

            	
              Breakage costs. Without
      limiting its generality, Clause 21.1 covers any liability, expense or
      loss, including a loss of a prospective profit, incurred by a
      Lender:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              in
      terminating, or otherwise in connection with, any interest and/or currency
      swap or any other transaction entered into (whether with another legal
      entity or with another office or department of the Lender concerned) to
      hedge any exposure arising under this Agreement or that part which the
      Lender concerned determines is fairly attributable to this Agreement of
      the amount of the liabilities, expenses or losses (including losses of
      prospective profits) incurred by it in terminating, or otherwise in
      connection with, a number of transactions of which this Agreement is
      one.

            

    

     

    
      	
              21.3  

            	
              Miscellaneous indemnities.
      The Borrower shall fully indemnify each Creditor Party severally on
      their respective demands in respect of all claims, demands, proceedings,
      liabilities, taxes, losses and expenses of every kind (“liability items”)
      which may be made or brought against, or incurred by, the relevant
      Creditor Party, in any country, in relation
to:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              any
      other event, matter or question which occurs or arises at any time during
      the Security Period and which has any connection with, or any bearing on,
      any Finance Document, any payment or other transaction relating to a
      Finance Document or any asset covered (or previously covered) by a
      Security Interest created (or intended to be created) by a Finance
      Document;

            

    

     

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

     

    Without
prejudice to its generality, this Clause 21.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.

     

    
      	
              21.4  

            	
              Extension of indemnities;
      environmental indemnity. Without prejudice to its generality,
      Clause 21.3 covers:

            

    

     

    
      	
              (a)  

            	
              any
      matter which would be covered by Clause 21.3 if any of the references in
      that Clause to a Lender were a reference to the Agent or (as the case may
      be) to the Security Trustee; and

            

    

     

    
      	
              (b)  

            	
              any
      liability items which arise, or are asserted, under or in connection with
      any law relating to safety at sea, pollution or the protection of the
      environment.

            

    

     

    
      	
              21.5  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              enforcing
      any such order or judgment;

            

    

     

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

     

    In this
Clause 21.5, the “available
rate of exchange” means the rate at which the Creditor Party concerned is
able at the opening of business (Hamburg time) on the Business Day after it
receives the sum concerned to purchase the Contractual Currency with the Payment
Currency.

     

    This
Clause 21.5 creates a separate liability of the Borrower which is distinct from
its other liabilities under the Finance Documents and which shall not be merged
in any judgment or order relating to those other liabilities.

     

    
      	
              21.6  

            	
              Certification of amounts.
      A notice which is signed by 2 officers of a Creditor Party, which
      states that a specified amount, or aggregate amount, is due to that
      Creditor Party under this Clause 21 and which indicates (without
      necessarily specifying a detailed breakdown) the matters in respect of
      which the amount, or aggregate amount, is due shall be prima facie
      evidence that the amount, or aggregate amount, is
  due.

            

    

     

    
      	
              21.7  

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

            

    

     

     

    
      	
              22  

            	
              NO
      SET-OFF OR TAX DEDUCTION

            

    

     

    
      	
              22.1  

            	
              No deductions. All
      amounts due from the Borrower under a Finance Document shall be
      paid:

            

    

     

    
      	
              (a)  

            	
              without
      any form of set-off, cross-claim or condition;
  and

            

    

     

    
      	
              (b)  

            	
              free
      and clear of any tax deduction except a tax deduction which the Borrower
      is required by law to make.

            

    

     

    
      	
              22.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              the
      amount due in respect of the payment shall be increased by the amount
      necessary to ensure that each Creditor Party receives and retains (free
      from any liability relating to the tax deduction) a net amount which,
      after the tax deduction, is equal to the full amount which it would
      otherwise have received.

            

    

     

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

    
      	
              22.3  

            	
              Evidence of payment of taxes.
      Within I month after making any tax deduction, the Borrower
      concerned shall deliver to the Agent documentary evidence satisfactory to
      the Agent that the tax had been paid to the appropriate taxation
      authority.

            

    

     

    
      	
              22.4  

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

            

    

     

     

    
      	
              23  

            	
              ILLEGALITY,
      ETC

            

    

     

    
      	
              23.1  

            	
              Illegality. This Clause
      23 applies if a Lender (the “Notifying Lender”)
      notifies the Agent that it has become, or will with effect from a
      specified date, become:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              contrary
      to, or inconsistent with, any
regulation,

            

    

     

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

     

    
      	
              23.2  

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

            

    

     

    
      	
              23.3  

            	
              Prepayment; termination of
      Commitment. On the Agent notifying the Borrower under Clause 23.2,
      the Notifying Lender’s Commitment shall terminate; and thereupon or, if
      later, on the date specified in the Notifying Lender’s notice under Clause
      23.1 as the date on which the notified event would become effective the
      Borrower shall prepay the Notifying Lender’s Contribution in accordance
      with Clause 8.

            

    

     

    
      	
              23.4  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

     

    
      	
              24  

            	
              INCREASED
      COSTS

            

    

     

    
      	
              24.1  

            	
              Increased costs. This
      Clause 24 applies if a Lender (the “Notifying Lender”)
      notifies the Agent that the Notifying Lender considers that as a
      result of:

            

    

     

    
      	
              (a)  

            	
              the
      introduction or alteration after the date of this Agreement of a law or
      regulation or an alteration after the date of this Agreement in the manner
      in which a law or regulation is interpreted or applied (disregarding any
      effect which relates to the application to payments under this Agreement
      of a tax on the Notifying Lender’s overall net income);
  or

            

    

     

    
      	
              (b)  

            	
              the
      effect of complying with any law or regulation (including any which
      relates to capital adequacy or liquidity controls or which affects the
      manner in which the Notifying Lender allocates capital resources to its
      obligations under this Agreement (including, without limitation, any laws
      or regulations which shall replace, amend and/or supplement those set out
      in the statement of the Basle Committee on Banking Regulations and
      Supervisory Practices dated July 1988 and entitled “International
      Convergence of Capital Management and Capital Structures”)) which is
      introduced, or altered, or the interpretation or application of which is
      altered, after the date of this
Agreement,

            

    

     

    is that
the Notifying Lender (or a parent company of it) has incurred or will incur an
“increased cost”, that is to say:

     

    
      	
              (i)  

            	
              an
      additional or increased cost incurred as a result of, or in connection
      with, the Notifying Lender having entered into, or being a party to, this
      Agreement or a Transfer Certificate, of funding or maintaining its
      Commitment or Contribution or performing its obligations under this
      Agreement, or of having outstanding all or any part of its Contribution or
      other unpaid sums; or

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

            	
              an
      additional or increased cost of funding all or maintaining all or any of
      the advances comprised in a class of advances formed by or including the
      Notifying Lender’s Contribution or (as the case may require) the
      proportion of that cost attributable to the Contribution;
    or

            

    

     

    
      	
              (iv)  

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

            

    

     

    but not
an item attributable to a change in the rate of tax on the overall net income of
the Notifying Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 21.1 or by Clause 22.

     

    For the
purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or
spread costs and/or losses among its assets and liabilities (or any class
thereof) on such basis as it considers appropriate.

     

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

    
      	
              24.2  

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

            

    

     

    
      	
              24.3  

            	
              Payment of increased costs.
      The Borrower shall pay to the Agent, at the end of any Interest
      Period during which the Agent makes demand, for the account of the
      Notifying Lender, the amounts which the Agent from time to time notifies
      the Borrower that the Notifying Lender has specified to be necessary to
      compensate the Notifying Lender for the increased
  cost.

            

    

     

    
      	
              24.4  

            	
              Notice of prepayment. If
      the Borrower is not willing to continue to compensate the Notifying Lender
      for the increased cost under Clause 24.3, the Borrower may give the Agent
      not less than 14 days’ notice of its intention to prepay the Notifying
      Lender’s Contribution at the end of an Interest
  Period.

            

    

     

    
      	
              24.5  

            	
              Prepayment; termination of
      Commitment. A notice under Clause 24.4 shall be irrevocable; the
      Agent shall promptly notify the Notifying Lender of the Borrower’s notice
      of intended prepayment; and:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              24.6  

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

            

    

     

     

    
      	
              25  

            	
              SET-OFF

            

    

     

    
      	
              25.1  

            	
              Application of credit balances.
      Each Creditor Party may without prior
  notice:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              for
      that purpose:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              25.2  

            	
              Existing rights unaffected.
      No Creditor Party shall be obliged to exercise any of its rights
      under Clause 25.1; and those rights shall be without prejudice and in
      addition to any right of set-off, combination of accounts, charge, lien or
      other right or remedy to which a Creditor Party is entitled (whether under
      the general law or any document).

            

    

     

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

    
      	
              25.3  

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

            

    

     

     

    
      	
              26  

            	
              TRANSFERS
      AND CHANGES IN LENDING OFFICES

            

    

     

    
      	
              26.1  

            	
              Transfer by Borrower.
      The Borrower may not, without the consent of the Agent, given on
      the instructions of all the
Lenders:

            

    

     

    
      	
              (a)  

            	
              transfer
      any of its rights or obligations under any Finance Document;
      or

            

    

     

    
      	
              (b)  

            	
              enter
      into any merger, de-merger or other reorganisation, or carry out any other
      act, as a result of which any of its rights or liabilities would vest in,
      or pass to, another person.

            

    

     

    
      	
              26.2  

            	
              Transfer by a Lender.
      Subject to Clause 26.5, a Lender (the “Transferor Lender”)
      may, with the prior consent of the Agent, at any time
      cause:

            

    

     

    
      	
              (a)  

            	
              its
      rights in respect of all or part of its Contribution;
  or

            

    

     

    
      	
              (b)  

            	
              its
      obligations in respect of all or part of its Commitment;
  or

            

    

     

    
      	
              (c)  

            	
              a
      combination of (a) and (b)

            

    

     

    to be (in
the case of its rights) transferred to, or (in the case of its obligations)
assumed by, another bank or financial institution (a “Transferee Lender”) by
delivering to the Agent a completed certificate in the form set out in Schedule
4 with any modifications approved or required by the Agent (a “Transfer Certificate”)
executed by the Transferor Lender and the Transferee Lender.

     

    Any
transfer to a bank or financial institution which is not affiliated to
Commerzbank AG shall require the prior consent of the Borrower (which shall not
be unreasonably withheld or delayed).

     

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

     

    
      	
              26.3  

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

            

    

     

    
      	
              (a)  

            	
              sign
      the Transfer Certificate on behalf of itself, the Borrower, the Security
      Parties, the Security Trustee and each of the
  Lenders;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

    
      	
              26.4  

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

            

    

     

    
      	
              26.5  

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

            

    

     

    
      	
              26.6  

            	
              Lender re-organisation; waiver
      of Transfer Certificate. However, if a Lender enters into any
      merger, de-merger or other reorganisation as a result of which all its
      rights or obligations vest in another person (the “successor”), the
      successor shall automatically and without any further act being necessary
      become a Lender with the same Commitment and Contribution as were held by
      the predecessor Lender.

            

    

     

    
      	
              26.7  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      
         

      

      
        64

        
          

        

      

      
         

      

    

    
      	
              (g)  

            	
              in
      respect of any breach of a warranty, undertaking, condition or other
      provision of a Finance Document or any misrepresentation made in or in
      connection with a Finance Document, the Transferee Lender shall be
      entitled to recover damages by reference to the loss incurred by it as a
      result of the breach or misrepresentation, irrespective of whether the
      original Lender would have incurred a loss of that kind or
      amount.

            

    

     

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

     

    
      	
              26.8  

            	
              Maintenance of register of
      Lenders. During the Security Period the Agent shall maintain a
      register in which it shall record the name, Commitment, Contribution and
      administrative details (including the lending office) from time to time of
      each Lender holding a Transfer Certificate and the effective date (in
      accordance with Clause 26.4) of the Transfer Certificate; and the Agent
      shall make the register available for inspection by any Lender, the
      Security Trustee and the Borrower during normal banking hours, subject to
      receiving at least 5 Business Days prior
notice.

            

    

     

    
      	
              26.9  

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

            

    

     

    
      	
              26.10  

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

            

    

     

    
      	
              26.11  

            	
              Registration fee. In
      respect of any Transfer Certificate, the Agent shall be entitled to
      recover a registration fee of $2,000 from the Transferor Lender or (at the
      Agent’s option) the Transferee
Lender.

            

    

     

    
      	
              26.12  

            	
              Sub-participation; subrogation
      assignment. A Lender may sub-participate all or any part of its
      rights and/or obligations under or in connection with the Finance
      Documents without the consent of, or any notice to, the Borrower, any
      Security Party, the Agent or the Security Trustee; and the Lenders may
      assign, in any manner and terms agreed by the Majority Lenders, the Agent
      and the Security Trustee, all or any part of those rights to an insurer or
      surety who has become subrogated to
them.

            

    

     

    
      	
              26.13  

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

            

    

     

    
      	
              26.14  

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

            

    

     

    
      	
              (a)  

            	
              the
      date on which the Agent receives the notice;
and

            

    

     

    
      	
              (b)  

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

            

    

     

    
      
         

      

      
        65

        
          

        

      

      
         

      

    

    
      	
              26.15  

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

            

    

     

     

    
      	
              27  

            	
              VARIATIONS
      AND WAIVERS

            

    

     

    
      	
              27.1  

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

            

    

     

    
      	
              27.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              a
      change to any Lender’s Commitment;

            

    

     

    
      	
              (d)  

            	
              an
      extension of the Availability
Period;

            

    

     

    
      	
              (e)  

            	
              a
      change to the definition of “Majority Lenders” or “Finance
      Documents”;

            

    

     

    
      	
              (f)  

            	
              a
      change to the preamble or to Clause 2, 3, 4, 5.1, 8.1, 8.2, 17, 18, 19 or
      30;

            

    

     

    
      	
              (g)  

            	
              a
      change to this Clause 27;

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              27.3  

            	
              Exclusion of other or implied
      variations. Except for a document which satisfies the requirements
      of Clauses 27.1 and 27.2, no document, and no act, course of conduct,
      failure or neglect to act, delay or acquiescence on the part of the
      Creditor Parties or any of them (or any person acting on behalf of any of
      them) shall result in the Creditor Parties or any of them (or any person
      acting on behalf of any of them) being taken to have varied, waived,
      suspended or limited, or being precluded (permanently or temporarily) from
      enforcing, relying on or
exercising:

            

    

     

    
      	
              (a)  

            	
              a
      provision of this Agreement or another Finance Document;
  or

            

    

     

    
      	
              (b)  

            	
              an
      Event of Default; or

            

    

     

    
      
         

      

      
        66

        
          

        

      

      
         

      

    

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

     

    
      	
              28  

            	
              NOTICES

            

    

     

    
      	
              28.1  

            	
              General. Unless
      otherwise specifically provided, any notice under or in connection with
      any
      Finance Document shall be given by registered letter or fax; and
      references in the Finance Documents to written notices, notices in writing
      and notices signed by particular persons shall be construed
      accordingly.

            

    

     

     

    
      	
              28.2  

            	
              Addresses for
      communications. A notice shall be
sent:

            

    

     

    
      
      

      
        	
                    (a) to the
      Borrower

                 

              	
                Aethrion
      Centre

                40
      Ag. Konstantinou Avenue

                151
      24 Maroussi

                Athens

                Greece

                Fax
      No: +30 210 619 5819

                Attn:
      the Chief Financial Officer

              
	 
      	 
      
	
                (b) to
      a Lender:

                 

              	
                At
      the address opposite its name in Schedule 1 or (as the case may require)
      in the relevant Transfer Certificate.

              
	 
      	 
      
	
                (c) to
      the Agent:

                 

              	
                Commerzbank
      AG

                Ness
      7-9

                D-20457

                Hamburg

                Germany

                Fax
      No:   +(49) 40 36 83 4068

                Attn:   Julia
      Schormann/Claas Ringleben

              
	 
      	 
      
	
                (d) to
      the Security Trustee:

                 

              	
                Commerzbank
      AGNess 7-9

                D-20457

                Hamburg

                Germany

                Fax
      No:   +(49) 40 36 83 4068

                Attn:   Julia
      Schormann/Claas Ringleben

              

      

    

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

     

    
      
         

      

      
        67

        
          

        

      

      
         

      

    

    
      	
              28.3  

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

            

    

     

    
      	
              (a)  

            	
              a
      notice which is delivered personally shall be deemed to be served, and
      shall take effect, at the time when it is
  delivered;

            

    

     

    
      	
              (b)  

            	
              a
      notice which is delivered by registered letter shall be deemed to be
      served, and shall take effect, 5 Business Days after being deposited in
      the post postage prepaid in an envelope addressed to it at the relevant
      address; and

            

    

     

    
      	
              (c)  

            	
              a
      notice which is sent by fax shall be deemed to be served, and shall take
      effect, 2 hours after its transmission is
  completed.

            

    

     

    
      	
              28.4  

            	
              Service outside business hours.
      However, if under Clause 28.3 a notice would be deemed to be
      served:

            

    

     

    
      	
              (a)  

            	
              on
      a day which is not a business day in the place of receipt;
    or

            

    

     

    
      	
              (b)  

            	
              on
      such a business day, but after 5 p.m. local
  time;

            

    

     

    the
notice shall (subject to Clause 28.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is such a business day.

     

    
      	
              28.5  

            	
              Illegible notices.
      Clauses 28.3 and 28.4 do not apply if the recipient of a notice
      notifies the sender within one hour after the time at which the notice
      would otherwise be deemed to be served that the notice has been received
      in a form which is illegible in a material
  respect.

            

    

     

    
      	
              28.6  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              28.7  

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

            

    

     

    
      	
              28.8  

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

            

    

     

    
      
         

      

      
        68

        
          

        

      

      
         

      

    

     

    
      	
              29  

            	
              SUPPLEMENTAL

            

    

     

    
      	
              29.1  

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

            

    

     

    
      	
              (a)  

            	
              cumulative;

            

    

     

    
      	
              (b)  

            	
              may
      be exercised as often as appears expedient;
and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              29.2  

            	
              Severability of provisions.
      If any provision of a Finance Document is or subsequently becomes
      void, unenforceable or illegal, that shall not affect the validity,
      enforceability or legality of the other provisions of that Finance
      Document or of the provisions of any other Finance
    Document.

            

    

     

    
      	
              29.3  

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

            

    

     

    
      	
              29.4  

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

            

    

     

     

    
      	
              30  

            	
              LAW
      AND JURISDICTION

            

    

     

    
      	
              30.1  

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

            

    

     

    
      	
              30.2  

            	
              Exclusive English jurisdiction.
      Subject to Clause 30.3, the courts of England shall have exclusive
      jurisdiction to settle any disputes which may arise out of or in
      connection with this
Agreement.

            

    

     

    
      	
              30.3  

            	
              Choice of forum for the
      exclusive benefit of the Creditor Parties. Clause 30.2 is for the
      exclusive benefit of the Creditor Parties, each of which reserves the
      right:

            

    

     

    
      	
              (a)  

            	
              to
      commence proceedings in relation to any matter which arises out of or in
      connection with this Agreement in the courts of any country other than
      England and which have or claim jurisdiction to that matter;
      and

            

    

     

    
      	
              (b)  

            	
              to
      commence such proceedings in the courts of any such country or countries
      concurrently with or in addition to proceedings in England or without
      commencing proceedings in England.

            

    

     

    The
Borrower shall not commence any proceedings in any country other than England in
relation to a matter which arises out of or in connection with this
Agreement.

     

    
      	
              30.4  

            	
              Process agent. The
      Borrower irrevocably appoints Eurofin International Ltd, whose present
      address is Chelsea Harbour, London SW10 OXD, England, to act as its agent
      to receive and accept on its behalf any process or other document relating
      to any proceedings in the English courts which are connected with this
      Agreement.

            

    

     

    
      
         

      

      
        69

        
          

        

      

      
         

      

    

    
      	
              30.5  

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

            

    

     

    
      	
              30.6  

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

            

    

     

    AS WITNESS the hands of the
duly authorised officers or attorneys of the parties the day and year first
before written.

     

    

     

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    

     

    LENDERS
AND COMMITMENTS

     

    
      	
              Lender

            	
              Lending
      Office

            	
              Commitment

              (US
      Dollars)

            
	
              Commerzbank
      AG

            	
              Ness
      7-9

              D-20457

              Hamburg

              Germany

            	
              120,000,000

            
	 
      	 
      	 
      

    

    

     

    
      
         

      

      
        71

        
          

        

      

      
         

      

    

    

     

    SCHEDULE
2

     

    

     

    DETAILS
OF CHARTERPARTIES

     

    
      	
              Ship

            	
              Net
      Hire

              Rate

              ($/day)

            	
              Estimated
      Delivery

              Date

            	
              Charter
      Period

              (months)

            	
              Charterer

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              “C
      DUCKLING”

            	
              28,500

            	
              2-4
      January 2007

            	
              12
      to 13 months

            	
              TMT
      Co. Ltd.,

            
	
              “F
      DUCKLING”

            	
              24,510

            	
              2-4
      January 2007

            	
              23
      to 26 months

            	
              Essan

            
	
              “G
      DUCKLING”

            	
              24,336

            	
              6
      December 2007

            	
              23
      to 25 months

            	
              TMT
      Co. Ltd.,

            
	
              “I
      DUCKLING”

            	
              24,510

            	
              28
      December 2007

            	
              11
      to 13 months

            	
              Neptune
      Shipping

               S.A.

            
	
              “J
      DUCKLING”

            	
              32,500

            	
              12
      December 2007

            	
              23
      to 25 months

            	
              Hyundai
      Merchant

              Marine
      Co., Ltd.

            

    

    
      
         

      

      
        72

        
          

        

      

      
         

      

    

    SCHEDULE
3

     

    DRAWDOWN
NOTICE

     

     

    
      	
               To:

            	
              Commerzbank
      AG

              Ness 7-9

              D-20457

              Hamburg

              Germany

            
	 	 

    

     

    Attention:  Loans Administration                                                [                          
] 2007

     

    DRAWDOWN NOTICE

     

    
      	 	 
	
              1.  

            	
              We
      refer to the loan agreement (the “Loan Agreement”)
      dated                     2007
      and made between ourselves as Borrower, the Lenders referred to therein,
      yourselves as Agent and as Security Trustee and in connection with a term
      loan facility of up to US$120,000,000. Terms defined in the Loan Agreement
      have their defined meanings when used in this Drawdown
    Notice.

            

    

     

    
      	
              2.  

            	
              We
      request to borrow an Advance in respect of Tranche [A] [B] to
      [finance]/[refinance] the acquisition cost of “[●] DUCKLING”
      as follows:

            

    

     

    
      	 	 
	
               (a)

            	Amount of
      Advance:  $[     ];
	 	 
	
               (b)

            	Drawdown
      Date:  [        ]
  2007;
	 	 
	
               (c)

            	Duration of
      the first Interset Period shall be
      [            
      ] months;
	 	 
	
               (d)

            	Payment
      instructions:  account of
      [                  
      ] and numbered
      [                      
      ] with
      [                   
      ] of 
      [                 
      ]. 
	 	 

    

     

    
    

    
      	
              3.  

            	
              We
      represent and warrant that:

            

    

     

    
      	
              (a)  

            	
              the
      representations and warranties in Clause 10 of the Loan Agreement would
      remain true and not misleading if repeated on the date of this notice with
      reference to the circumstances now
existing;

            

    

     

    
      	
              (b)  

            	
              no
      Event of Default or Potential Event of Default has occurred or will result
      from the borrowing of the Loan.

            

    

     

    
      	
              4.  

            	
              This
      notice cannot be revoked without the prior consent of the Majority
      Lenders.

            

    

     

    
      	
              5.  

            	
              We
      authorise you to deduct any outstanding fees applicable to the Advance
      referred to in Clause 20.1 from the amount of the
  Advance.

            

    

     

    _____________________________

    [Attorney-in-Fact][Director]

    for and
on behalf of

    STAR
BULK CARRIERS CORP.

    
      
         

      

      
        73

        
          

        

      

      
         

      

    

    SCHEDULE
4

     

    CONDITION
PRECEDENT DOCUMENTS

     

    
 

     

    PART
A

     

    
      	
               
      

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

            

    

     

    
      	
              1

            	
              A
      duly executed original of each of:

            

    

     

    
      	
              (a)

            	
              this
      Agreement;

            

    

     

    
      	
              (b)

            	
              the
      Agency and Trust Deed;

            

    

     

    
      	
              (c)

            	
              the
      Share Pledges;

            

    

     

    
      	
              (d)

            	
              the
      Guarantees; and

            

    

     

    
      	
              (e)

            	
              the
      Earnings Account Pledges.

            

    

     

    
      	
              2

            	
              Copies
      of the certificate of incorporation and constitutional documents of the
      Borrower and each Owner.

            

    

     

    
      	
              3

            	
              Copies
      of resolutions of the directors of the Borrower and the directors and
      shareholders of the Owner of each Identified Ship authorising the
      execution of each of the Finance Documents to which the Borrower or that
      Owner is a party and, in the case of the Borrower, authorising named
      officers to give the Drawdown Notices and other notices under this
      Agreement.

            

    

     

    
      	
              4

            	
              The
      original of any power of attorney under which any Finance Document is
      executed on behalf of the Borrower or the Owner of an Identified
      Ship.

            

    

     

    
      	
              5

            	
              Copies
      of all consents which the Borrower or any Owner requires to enter into, or
      make any payment under, any Finance Document and any
  MOA.

            

    

     

    
      	
              6

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

            

    

     

    
      	
              7

            	
              Evidence
      satisfactory to the Agent that the Owner of each Identified Ship is a
      direct or indirect wholly-owned subsidiary of the
  Borrower.

            

    

     

    
      	
              8

            	
              A
      copy of each MOA and of all documents signed or issued by the parties
      thereto under or in connection with
it.

            

    

     

    
      	
              9

            	
              Such
      documentary evidence as the Agent and its legal advisers may require in
      relation to the due authorisation and execution of each MOA and all
      documents to be executed by the parties thereto under that
      MOA.

            

    

     

    
      	
              10

            	
              A
      copy of the Management Agreement in respect of each
  Ship.

            

    

     

    
      	
              11

            	
              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.

            

    

     

    
      	
              12

            	
              Documentary
      evidence that the agent for service of process named in Clause 30 has been
      appointed.

            

    

     

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

    
      	
              13

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

            

    

     

    
      	
              14

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

            

    

     

    PART
B

     

    
      	
               
      

            	
              The
      following are the documents referred to in Clause 9.1(6). In this Part B
      of Schedule 4:

            

    

     

    
      	
               
      

            	
              “Relevant
      Owner” means the Owner of the Relevant Ship;
and

            

    

     

    
      	
               
      

            	
              “Relevant
      Ship” means each Ship which is to be part-financed or refinanced by the
      relevant Advance.

            

    

     

    
      	
              1

            	
              A
      copy of the Initial Charterparty in relation to the relevant Ship and of
      all documents signed or issued by the parties thereto under or in
      connection with that Initial
Charterparty.

            

    

     

    
      	
              2

            	
              A
      duly executed original of the Mortgage, the General Assignment and the
      Charterparty Assignment relating to the Relevant Ship (and of each
      document to be delivered under each of
them);

            

    

     

    
      	
              3

            	
              Documentary
      evidence that:

            

    

     

    
      	
              (a)

            	
              (if
      the acquisition of the Relevant Ship is to be financed by the relevant
      Advance), the Relevant Ship has been unconditionally delivered by the
      relevant Seller to and accepted by, the Relevant Owner under the MOA
      applicable to such Relevant Ship and the relevant Contract Price has been
      duly paid, together with a copy of the bill of sale and the other
      documents delivered by the relevant Seller
  thereunder;

            

    

     

    
      	
              (b)

            	
              the
      Relevant Ship is definitively and permanently registered in the name of
      the Relevant Owner under an Approved
Flag;

            

    

     

    
      	
              (c)

            	
              the
      Relevant Ship is in the absolute and unencumbered ownership of the
      Relevant Owner, save as contemplated by the Finance
    Documents;

            

    

     

    
      	
              (d)

            	
              the
      Relevant Ship maintains the highest available class with a first-class
      classification society which is a member of IACS as the Agent may approve
      free of all overdue recommendations and conditions of such classification
      society;

            

    

     

    
      	
              (e)

            	
              the
      Mortgage relating to the Relevant Ship has been duly registered against
      that Relevant Ship as a valid first priority or preferred ship mortgage in
      accordance with the laws of the relevant Approved Flag
    State;

            

    

     

    
      	
              (f)

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

            

    

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

    
      	
              4

            	
              A
      duly executed original of each Manager’s Undertaking in relation to the
      Relevant Ship.

            

    

     

    
      	
              5

            	
              Copies
      of:

            

    

     

    
      	
              (a)

            	
              the
      document of compliance (DOC) and safety management certificate (SMC)
      referred to in paragraph (a) of the definition of the ISM Code
      Documentation and the ISSC in respect of the Relevant Ship and the
      relevant Approved Manager certified as true and in effect by the Relevant
      Owner; and

            

    

     

    
      	
              (b)

            	
              the
      ISPS Code Documentation in respect of the Relevant Ship and the Relevant
      Owner certified as true and in effect by the Relevant
    Owner.

            

    

     

    
      	
              6

            	
              A
      valuation (at the cost of the Borrower) of the Relevant Ship, addressed to
      the Agent, stated to be for the purpose of this Agreement and dated not
      earlier than 15 days before the Drawdown Date for the relevant Advance,
      each from an independent sale and purchase ships broker appointed by the
      Agent to be prepared in accordance with Clause
  15.4.

            

    

     

    
      	
              7

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

            

    

     

    
      	
              8

            	
              A
      favourable opinion from an independent insurance consultant acceptable to
      the Agent on such matters relating to the insurances of the Relevant Ship
      as the Agent may require.

            

    

     

    
      	
              9

            	
              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.

            

    

     

    
      	
               
      

            	
              Every
      other copy document delivered under this Schedule shall be certified as a
      true and up to date copy by a director or the secretary (or equivalent
      officer) of the Borrower or any other person acceptable to the Agent in
      its sole discretion.

            

    

     

    
      
         

      

      
        76

        
          

        

      

      
         

      

    

    SCHEDULE
5

     

    TRANSFER
CERTIFICATE

     

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

     

    
      	
              To:

            	
              Commerzbank
      AG for itself and for and on behalf of the Borrower, each Security Party,
      the Security Trustee and each Lender, as defined in the Loan Agreement
      referred to below.

            

    

     

    [                                   
]

     

    
      	
              1

            	
              This
      Certificate relates to a Loan Agreement (the “Loan Agreement”)
      dated                2007
      and made between (1) Star Bulk Carriers Corp. as borrower (the “Borrower”), (2) the
      banks and financial institutions named therein as Lenders, (3) Commerzbank
      AG as Agent and (4) Commerzbank AG as Security Trustee in respect of a
      term loan facility of up to
US$120,000,000.

            

    

     

    
      	
              2

            	
              In
      this Certificate:

            

    

     

    “the Relevant Parties” means
the Agent, the Borrower, each Security Party, the Security Trustee and each
Lender;

     

    “the Transferor” means [full
name] of [lending office]; “the
Transferee” means [full name] of [lending office].

     

    Terms
defined in the Loan Agreement shall, unless the contrary intention appears, have
the same meanings when used in this Certificate.

     

     

    
      	
              3

            	
              The
      effective date of this Certificate
      is ........200    Provided that this Certificate shall not
      come into effect unless it is signed by the Agent on or before that
      date.

            

    

     

    
      	
              4

            	
              The
      Transferor assigns to the Transferee absolutely all rights and interests
      (present, future or contingent) which the Transferor has as Lender under
      or by virtue of the Loan Agreement and every other Finance Document in
      relation to [ ] per cent. of the Contribution outstanding to the
      Transferor (or its predecessors in title) which is set out
      below:

            

    

     

    Contribution                                                                           Amount
transferred

     

    5            
 By virtue of this Transfer Certificate and Clause 26 of the Loan
Agreement, the Transferor is discharged [entirely from its Commitment which
amounts to $[        ]] [from
[     ] per cent. of its Commitment, which percentage
represents $[         ]] and the
Transferee acquires a Commitment of $[       
 ].

    
 

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

    
      	
              6

            	
              The
      Transferee undertakes with the Transferor and each of the Relevant Parties
      that the Transferee will observe and perform all the obligations under the
      Finance Documents which Clause 26 of the Loan Agreement provides will
      become binding on it upon this Certificate taking
  effect.

            

    

     

    
      	
              7

            	
              The
      Agent, at the request of the Transferee (which request is hereby made)
      accepts, for the Agent itself and for and on behalf of every other
      Relevant Party, this Certificate as a Transfer Certificate taking effect
      in accordance with Clause 25 of the Loan
  Agreement.

            

    

     

    
      	
              8

            	
              The
      Transferor:

            

    

     

    
      	
              (a)

            	
              warrants
      to the Transferee and each Relevant
Party:

            

    

     

    
      	
               
      

            	
              (i)

            	
              that
      the Transferor has full capacity to enter into this transaction and has
      taken all corporate action and obtained all consents which are in
      connection with this transaction;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              that
      this Certificate is valid and binding as regards the
      Transferor;

            

    

     

    
      	
              (b)

            	
              warrants
      to the Transferee that the Transferor is absolutely entitled, free of
      encumbrances, to all the rights and interests covered by the assignment in
      paragraph 4 above;

            

    

     

    
      	
              (c)

            	
              undertakes
      with the Transferee that the Transferor will, at its own expense, execute
      any documents which the Transferee reasonably requests for perfecting in
      any relevant jurisdiction the Transferee’s title under this Certificate or
      for a similar purpose.

            

    

     

    
      	
              9

            	
              The
      Transferee:

            

    

     

    
      	
              (a)

            	
              confirms
      that it has received a copy of the Loan Agreement and each other Finance
      Document;

            

    

     

    
      	
              (b)

            	
              agrees
      that it will have no rights of recourse on any ground against either the
      Transferor, the Agent, the Security Trustee or any Lender in the event
      that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Finance Documents prove to be invalid or
  ineffective,

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Borrower or any Security Party fails to observe or perform its
      obligations, or to discharge its liabilities, under the Finance
      Documents;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              it
      proves impossible to realise any asset covered by a Security Interest
      created by a Finance Document, or the proceeds of such assets are
      insufficient to discharge the liabilities of the Borrower or any Security
      Party under the Finance Documents;

            

    

     

    
      	
              (c)

            	
              agrees
      that it will have no rights of recourse on any ground against the Agent,
      the Security Trustee or any Lender in the event that this Certificate
      proves to be invalid or
ineffective;

            

    

     

    
      	
              (d)

            	
              warrants
      to the Transferor and each Relevant Party (i) that it has full capacity to
      enter into this transaction and has taken all corporate action and
      obtained all official consents which it needs to take or obtain in
      connection with this transaction; and (ii) that this Certificate is valid
      and binding as regards the Transferee;
and

            

    

     

    
      	
              (e)

            	
              confirms
      the accuracy of the administrative details set out below regarding the
      Transferee.

            

    

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

    
      	
              10

            	
              The
      Transferor and the Transferee each undertake with the Agent and the
      Security Trustee severally, on demand, fully to indemnify the Agent and/or
      the Security Trustee in respect of any claim, proceeding, liability or
      expense (including all legal expenses) which they or either of them may
      incur in connection with this Certificate or any matter arising out of it,
      except such as are shown to have been mainly and directly caused by the
      gross and culpable negligence or dishonesty of the Agent’s or the Security
      Trustee’s own officers or
employees.

            

    

     

    
      	
              11

            	
              The
      Transferee shall repay to the Transferor on demand so much of any sum paid
      by the Transferor under paragraph 10 above as exceeds one-half of the
      amount demanded by the Agent or the Security Trustee in respect of a
      claim, proceeding, liability or expense which was not reasonably
      foreseeable at the date of this Certificate; but nothing in this paragraph
      shall affect the liability of each of the Transferor and the Transferee to
      the Agent or the Security Trustee for the full amount demanded by
      it.

            

    

     

    
      	
              [Name
      of Transferor]

            	
              [Name
      of Transferee]

            
	
              By:

            	
              By:

            
	
              Date:

            	
              Date:

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              Agent

            	 
      
	 
      	 
      
	
              Signed
      for itself and for and on behalf of itself as Agent and for every other
      Relevant Party

            	 
      
	 
      	 
      
	
              COMMERZBANK
      AG

            	 
      
	 
      	 
      
	
              By:

            	 
      
	 
      	 
      
	
              Date:

            	 
      
	 
      	 
      

    

    
      
         

      

      
        79

        
          

        

      

      
         

      

    

    Administrative
Details of Transferee

     

     

    Name of
Transferee:

     

    Lending
Office:

     

    Contact
Person

    (Loan
Administration Department):

     

    Telephone:

     

    Telex:

     

    Fax:

     

    Contact
Person

    (Credit
Administration Department):

     

    Telephone:

     

    Telex:

     

    Fax:

     

    Account
for payments:

     

     

     

     

    
      	
               Note:

            	
              This
      Transfer Certificate alone may not be sufficient to transfer a
      proportionate share of the Transferor’s interest in the security
      constituted by the Finance Documents in the Transferor’s or Transferee’s
      jurisdiction. It is the responsibility of each Lender to ascertain whether
      any other documents are required for this
  purpose.

            

    

     

    

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

    SCHEDULE
6

     

     

    FORM
OF COMPLIANCE CERTIFICATE

     

    
      	
              To
      :

            	
              Commerzbank
      AG

            	 
      
	 
      	
              Ness
      7-9

            	 
      
	 
      	
              D-20457
      Hamburg Germany

            	 
      
	 
      	 
      	 
      
	 
      	
              [●] 200[●]

            

    

     

    Dear
Sirs,

     

    We refer
to a loan agreement dated [●] 2007 (the “Loan Agreement”) made between
(amongst others) yourselves and ourselves in relation to a term loan facility of
up to $120,000,000.

     

    Words and
expressions defined in the Loan Agreement shall have the same meaning when used
in this compliance certificate.

     

    We
enclose with this certificate a copy of the [audited]/[unaudited] consolidated
accounts for the Group for the [financial year] [6-month period] ended [●]. The accounts
(i) have been prepared in accordance with all applicable laws and GAAP all
consistently applied, (ii) give a true and fair view of the state of affairs of
the Group at the date of the accounts and of its profit for the period to which
the accounts relate and (iii) fully disclose or provide for all significant
liabilities of the Group.

     

    We also
enclose copies of the valuations of all the Fleet Vessels which were used for
the purpose of calculating the Market Value Adjusted Equity Ratio as at [●].

     

    The
Borrower represents that no Event of Default or Potential Event of Default has
occurred as at the date of this certificate [except for the following matter or
event [set out all material
details of matter or event]]. In addition as of [●], the Borrower
confirms compliance with the financial covenants set out in Clause 12.5 of the
Loan Agreement for the 3 months ending as of the date to which the enclosed
accounts are prepared.

     

    We now
certify that, as at [●]:

     

    (a)           the
Market Value Adjusted Equity Ratio is [●] per cent.;
and

     

    (b)           the
Liquid Funds are $[●],

     

    as shown
in the attached calculation sheets.

     

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

     

    

     

    ________________________________

    [●]

    Chief
Financial Officer of

    STAR
BULK CARRIERS CORP.

    

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

    

    EXECUTION
PAGE

     

    

     

    
      	
              BORROWER

            	 
      
	 
      	 
      
	
              SIGNED by Vassiliki
      Poziopoulou

            	
              )

            
	
              for
      and on behalf of

            	
              )

            
	
              STAR
      BULK CARRIERS CORP.

            	
              )

            
	 
      	 
      
	 
      	 
      
	
              LENDERS

            	 
      
	 
      	 
      
	
              SIGNED by Vassiliki
      Georgopoulos

            	
              )

            
	
              for
      and on behalf of

            	
              )

            
	
              COMMERZBANK
      AG

            	
              )

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              AGENT

            	 
      
	 
      	 
      
	
              SIGNED by Vassiliki
      Georgopoulos

            	
              )

            
	
              for
      and on behalf of

            	
              )

            
	
              COMMERZBANK
      AG

            	
              )

            
	 
      	 
      
	 
      	 
      
	
              SECURITY
      TRUSTEE

            	 
      
	 
      	 
      
	
              SIGNED by Vassiliki
      Georgopoulos

            	
              )

            
	
              for
      and on behalf of

            	
              )

            
	
              COMMERZBANK
      AG

            	
              )

            
	 
      	 
      
	 
      	 
      
	
              Witness
      to all the above signatures

            	 
      
	 
      	 
      
	
              Name:      

            	 
      
	        	 
	
              Address:   

            	 
      
	        	 

    
        

    
      
         

      

      
        82

        
          

        

      

      
         

      

    

    IRREVOCABLE
PROXY AND POWER OF ATTORNEY

     

    KNOW ALL
MEN BY THESE PRESENTS that STAR
BULK CARRIERS CORP. (the “Pledgor”) being the Sole
Member of the STAR THETA
LLC (the “Company”), a Marshall
Islands Limited liability Company, and the legal and beneficial owner of 100 LLC
Shares (the “Shares”) of
STAR THETA LLC HEREBY
MAKES CONSTITUTES AND APPOINTS Commerzbank AG (the “Security Trustee”) acting with
full power of substitution as the true and lawful attorney and proxy of the
Pledgor to appear, act and vote upon and in all matters which may arise at any
meetings of the Members of the Company and at any adjournments thereof and to
take any and all such action by unanimous written consent in lieu of such a
meeting for the transaction of any business which may and lawfully come or have
come before any such meeting (including, without limitation, the removal of all
or any Officers of the Company, with or without cause and the appointment of the
Officers to fill such vacancies as are created by such removal) as fully as the
Pledgor would do if personally present and to waive notice of any such meeting,
hereby revoking with effect from the date hereof all or any proxies and/or
powers of attorney previously given in favour of any other person or persons in
relation to the Shares.

     

    The
Pledgor hereby ratifies and confirms all that the Security Trustee or any
substitute or substitutes shall do or cause to be done by virtue
hereof.

     

    The
Shares have been pledged to the Security Trustee by a Shares Pledge dated 27
December 2007 (the “Shares
Pledge”) and this Proxy and Power of Attorney is given by way of security
and shall remain irrevocable for as long as any moneys secured by the Shares
Pledge remain outstanding (but shall not be exercised until after the occurrence
of a Default and the service of an Enforcement Notice (each as referred to in
the Shares Pledge)).

     

    This Deed
is governed by English law.

     

    IN WITNESS whereof the Pledgor
has caused this deed to be duly executed this 27th day of December
2007.

     

    
      	
              PLEDGOR

            	 
      
	 
      	 
      
	
              EXECUTED
      AND DELIVERED AS A DEED

            	 
      
	 
      	 
      
	
              on
      behalf of

            	
              )

            
	
              STAR
      BULK CARRIERS CORP.

            	
              )

            
	
              by

            	
              )

            
	
              its
      duly authorized attorney

            	
              )

            
	
              in
      the presence of:

            	
              )

            
	 
      	 
      
	
              SECURITY
      TRUSTEE

            	 
      
	 
      	 
      
	
              EXECUTED
      AND DELIVERED AS A DEED

            	 
      
	 
      	 
      
	
              on
      behalf of

            	
              )

            
	
              COMMERZBANK
      AG

            	
              )

            
	
              by

            	
              )

            
	
              its
      duly authorized attorney

            	
              )

            
	
              in
      the presence of:

            	
              )

            
	 
      	 
      

    

    
 

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LETTER
OF RESIGNATION

     

    

     

    To:           STAR THETA LLC (the “Company”)

     

    

     

    

     

    Dear
Sirs,

     

    

     

    I, VIKTORIA POZIOPOULOU hereby
resign from my position as President and Secretary of the Company with effect
from the date of this letter.

     

    I hereby
confirm that I have no claim whatsoever against the Company for loss of office
or otherwise.

     

    Yours
faithfully,

     

    

     

    

     

    __________________________

     

    VIKTORIA
POZIOPOULOU

    President
and Secretary

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