Document:

limitedwaiverlc.htm

  
    Exhibit 4.16

     

    LIMITED WAIVER AND CONSENT
AGREEMENT

     

     

    

     

    This LIMITED WAIVER AND CONSENT
AGREEMENT (this “Waiver”), dated as of
April 20, 2010 is made by and between HSH Nordbank AG, New York Branch (“HSHN”)
and Straits Offshore Ltd. (“Straits”).

    

     

         WHEREAS,
reference is made to that certain Letter of Credit Facility Agreement dated as
of July 31, 2008 between Straits and HSHN (as amended from time to time, the
“Agreement”; capitalized terms shall have the meanings assigned in the Agreement
unless otherwise defined herein); and

     

     

         WHEREAS,
Straits has requested that HSHN waive compliance with certain requirements under
Section 7.3(d) of the Agreement, as set forth below;

     

         NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

    

     

    Section
1.                      Consent and
Waiver.

     

     

    HSHN
confirms that, with effect on 30 September 2009, it has waived the requirement
under Section 7.3(d) of the Agreement that Guarantor has on a consolidated basis
Cash and Cash Equivalents equal to the greater of $15,000,000 and 6% of long
term debt.  Instead, Section 7.3(d) shall provide as
follows:

     

    “(d)     Cash and Cash
Equivalents.  ensure that it has, on a consolidated basis, at
any time in the period beginning on 30 September 2009 and ending on 30 September
2010, Cash and Cash Equivalents equal to or greater than USD 4,000,000, and at
all times thereafter equal to or greater than USD 6,000,000.”

    

     

    Section
2.                      Representations and
Warranties.

     

    Straits
represents and warrants to HSHN that immediately after giving effect to the
terms of this Waiver, the representations and warranties set forth in the
Agreement as amended hereby are true and correct, and there exists no Event of
Default or any condition which, with the giving of notice or passage of time, or
both, would constitute an Event of Default.

    

     

    Section
3.                      Covenants.

     

    Straits
hereby affirms that it has duly performed and observed the covenants and
undertakings set forth in the Agreement, and covenants and undertakes to
continue to duly perform and observe such covenants and undertakings, as amended
hereby, so long as the Agreement as amended hereby shall remain in effect,
subject to the following qualifications or
exceptions:  None.

    

    Section
4.                      Fees and
Expenses.  Straits agrees to pay to HSHN, upon the execution
hereof, an initial fee of USD 64,462.50 (being 0.25% of the amount of the Letter
of Credit) in connection with its review and processing of the waiver request
and the preparation and execution of this Waiver.  Straits will pay an
additional fee to HSHN promptly following execution and delivery of this Waiver,
such fee to be in an amount determined by the parties in good
faith.

    

    Section
5.                      Conditions
Precedent.  The effectiveness of this Waiver is subject to the
following conditions precedent:

     

    
      	
               
      

            	
              (a)

            	
              Execution and
      Delivery.  Straits shall have duly executed and delivered
      this Waiver to HSHN;

            

    

     

     

    
      	
               
      

            	
              (b)

            	
              Consent, Agreement and
      Affirmation.  The Guarantor shall have duly executed and
      delivered the Consent, Agreement and Affirmation attached hereto;
      and

            

    

     

     

    
      	
               
      

            	
              (c)

            	
              Corporate
      Authority.  HSHN shall have received an officer’s
      certificate in form and substance satisfactory to HSHN and its counsel
      that evidences approval of this Waiver and authorizes an appropriate
      officer or officers or attorney-in-fact or attorneys-in-fact to execute
      the same on its behalf;

            

    

     

     

    Section
6.                       No Other
Amendment.  All other terms and conditions of the Agreement
shall remain in full force and effect and the Agreement shall be read and
construed as if the terms of this Waiver were included therein by way of
addition or substitution, as the case may be.

     

     

    Section
7.                      Execution in
Counterparts.  This Waiver may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

     

     

    Section
8.                      Governing
Law.  THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
CONFLICT OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).

     

    Section
9.                      Severability

    .  Any
provision of this Waiver held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions of this Waiver; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    

     

     

    

     

     

    

     

     

    

     

     

    [Remainder
of page intentionally left blank]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.

     

     

    STRAITS
OFFSHORE, LTD.,

     

     

    

     

     

    

     

     

    
      	
               
      

            	
              By:___________________________________

            

    

     

     

    
      	
               
      

            	
              Name:

            

    

     

     

    
      	
               
      

            	
              Title:

            

    

     

     

    

     

     

    

     

     

    

     

     

    HSH
NORDBANK AG, NEW YORK BRANCH

     

     

    

     

     

    

     

     

    
      	
               
      

            	
              By:___________________________________

            

    

     

     

    
      	
               
      

            	
              Name

            

    

     

     

    
      	
               
      

            	
              Title:

            

    

     

     

    

     

     

    

     

     

    

     

     

    
      	
               
      

            	
              By:___________________________________

            

    

     

     

    
      	
               
      

            	
              Name:

            

    

     

     

    
      	
               
      

            	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

     

     

    CONSENT, AGREEMENT AND
AFFIRMATION

     

     

    

     

     

    The
undersigned, referred to in the Agreement as a “Guarantor”, hereby (i) consents
and agrees to all of the terms and conditions of the foregoing Waiver dated as
of April 20, 2010 amending that certain Letter of Credit Facility Agreement,
dated as of July 31, 2008 (as amended, the “Agreement”), between STRAITS
OFFSHORE LTD., a company incorporated under the laws of the British Virgin
Islands, as account party (“Straits”) and HSH NORDBANK AG, NEW YORK BRANCH, as
letter of credit provider (“HSHN”); and (ii) reaffirms its obligations under
that certain Guaranty, dated July 31, 2008, given in favor of HSHN and that
certain Pledge Agreement, dated July 31, 2008, given in favor of HSHN with
respect to a pledge of the common shares of Straits, as all such instruments
have been amended.

     

     

    

     

     

    B+H OCEAN
CARRIERS LTD.,

     

     

    as
Guarantor

     

     

    

     

     

    

     

     

    
      	
               
      

            	
              By:

            	 

    

     

     

    
      	
               
      

            	
              Name:

            

    

     

     

    
      	
               
      

            	
              Title:

            

    

     

     

    

     

     

    

     

    
      
        
          SK 16279 0020 914275   v2obojuniorloan.htm

  
    
      	
              Exhobit 4.17

              Execution
      Version

               

            
	
              Loan
      Agreement

              relating
      to a US$3,975,230 loan facility

               

            
	
              Dated 11 
      February 2010

               

               

            
	
              BHOBO
      One Ltd.

               

              BHOBO
      Two Ltd.

               

              BHOBO
      Three Ltd.

               

              RMJ
      OBO Shipping Ltd.

               

              Sagamore
      Shipping Ltd.

               

              OBO
      Holdings Ltd.

               

              Boss
      Tankers Ltd.

               

              Agawam
      Shipping Corp.

               

              Aquidneck
      Shipping Corp.

               

              Anawan
      Shipping Corp.

               

              Isabelle
      Shipholdings Corp.

              (as
      joint and several Borrowers)

               

              B+H
      Ocean Carriers Ltd

              (as
      Guarantor)

               

              Bank
      of Scotland plc

              (as
      Lender)

               

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Contents

    

      
        
          	
                  1

                	
                  Definitions and
    interpretation

                	
                  3

                
	
                  1.1

                	
                  Definitions

                	
                  3

                
	
                  1.2

                	
                  Interpretation

                	
                  16

                
	
                  2

                	
                  Facility

                	
                  18

                
	
                  3

                	
                  Drawdown

                	
                  18

                
	
                  3.1

                	
                  Request for Advance

                	
                  18

                
	
                  3.2

                	
                  Availability

                	
                  18

                
	
                  3.3

                	
                  Drawdown Notice irrevocable

                	
                  19

                
	
                  3.4

                	
                  Disbursement of Advance by issuance of the
      Effective Date Notice

                	
                  19

                
	
                  4

                	
                  Interest

                	
                  19

                
	
                  4.1

                	
                  Payment of normal interest

                	
                  19

                
	
                  4.2

                	
                  Normal rate of interest

                	
                  19

                
	
                  4.3

                	
                  Payment of accrued interest

                	
                  19

                
	
                  4.4

                	
                  Notification of market
      disruption

                	
                  19

                
	
                  4.5

                	
                  Suspension of drawdown.

                	
                  20

                
	
                  4.6

                	
                  Negotiation of alternative rate of
      interest

                	
                  20

                
	
                  4.7

                	
                  Application of agreed alternative rate of
      interest

                	
                  20

                
	
                  4.8

                	
                  Alternative rate of interest in absence of
      agreement

                	
                  20

                
	
                  4.9

                	
                  Notice of prepayment

                	
                  20

                
	
                  4.10

                	
                  Prepayment

                	
                  20

                
	
                  4.11

                	
                  Application of prepayment

                	
                  20

                
	
                  5

                	
                  Interest Periods

                	
                  20

                
	
                  5.1

                	
                  Commencement of Interest
      Periods

                	
                  20

                
	
                  5.2

                	
                  Duration of normal Interest
      Periods

                	
                  20

                
	
                  5.3

                	
                  Duration of Interest Periods for repayment
      instalments

                	
                  21

                
	
                  5.4

                	
                  Non-availability of matching deposits for Interest
      Period selected

                	
                  21

                
	
                  6

                	
                  Default interest

                	
                  21

                
	
                  6.1

                	
                  Payment of default interest on overdue
      amounts

                	
                  21

                
	
                  6.2

                	
                  Default rate of interest

                	
                  21

                
	
                  6.3

                	
                  Calculation of default rate of
      interest

                	
                  21

                
	
                  6.4

                	
                  Notification of interest periods and default
      rates

                	
                  22

                
	
                  6.5

                	
                  Payment of accrued default
      interest

                	
                  22

                
	
                  6.6

                	
                  Compounding of default
    interest

                	
                  22

                
	
                  6.7

                	
                  Application to Master
      Agreements

                	
                  22

                
	
                  7

                	
                  Repayment and prepayment

                	
                  22

                
	
                  7.1

                	
                  Amount of repayment
    instalments

                	
                  22

                
	
                  7.2

                	
                  Mandatory repayment of Excess
      Cash

                	
                  23

                
	
                  7.3

                	
                  Final Repayment Date

                	
                  23

                
	
                  7.4

                	
                  Voluntary prepayment

                	
                  23

                
	
                  7.5

                	
                  Conditions for voluntary
      prepayment

                	
                  23

                
	
                  7.6

                	
                  Effect of notice of
    prepayment

                	
                  24

                
	
                  7.7

                	
                  Mandatory prepayment

                	
                  24

                
	
                  7.8

                	
                  Amounts payable on
    prepayment

                	
                  24

                
	
                  7.9

                	
                  Application of partial
      prepayment

                	
                  24

                
	
                  7.10

                	
                  No reborrowing

                	
                  24

                
	
                  8

                	
                  Conditions precedent

                	
                  24

                
	
                  8.1

                	
                  Documents, fees and no
    default

                	
                  24

                
	
                  8.2

                	
                  Waivers of conditions
    precedent

                	
                  26

                
	
                  9

                	
                  Representations and
    warranties

                	
                  26

                
	
                  9.1

                	
                  General

                	
                  26

                
	
                  9.2

                	
                  Status

                	
                  26

                
	
                  9.3

                	
                  Share capital and ownership

                	
                  26

                
	
                  9.4

                	
                  Corporate power

                	
                  27

                
	
                  9.5

                	
                  Consents in force

                	
                  27

                
	
                  9.6

                	
                  Legal validity; effective Security
      Interests

                	
                  27

                
	
                  9.7

                	
                  No third party Security
      Interests

                	
                  27

                
	
                  9.8

                	
                  No conflicts

                	
                  27

                
	
                  9.9

                	
                  No withholding taxes

                	
                  28

                
	
                  9.10

                	
                  No default

                	
                  28

                
	
                  9.11

                	
                  Information

                	
                  28

                
	
                  9.12

                	
                  No litigation

                	
                  28

                
	
                  9.13

                	
                  Compliance with certain
      undertakings

                	
                  28

                
	
                  9.14

                	
                  Taxes paid

                	
                  28

                
	
                  9.15

                	
                  ISM Code and ISPS Code
      compliance

                	
                  28

                
	
                  9.16

                	
                  No filing or stamp taxes

                	
                  28

                
	
                  9.17

                	
                  Own account

                	
                  29

                
	
                  9.18

                	
                  Pari passu ranking

                	
                  29

                
	
                  9.19

                	
                  No sovereign immunity

                	
                  29

                
	
                  9.20

                	
                  Barge

                	
                  29

                
	
                  10

                	
                  General undertakings

                	
                  29

                
	
                  10.1

                	
                  General

                	
                  29

                
	
                  10.2

                	
                  Title; negative pledge

                	
                  29

                
	
                  10.3

                	
                  No disposal of assets

                	
                  30

                
	
                  10.4

                	
                  No other liabilities or obligations to be
      incurred

                	
                  30

                
	
                  10.5

                	
                  Information provided to be
      accurate

                	
                  30

                
	
                  10.6

                	
                  Provision of financial statements and other
      information

                	
                  30

                
	
                  10.7

                	
                  Form of financial
statements

                	
                  30

                
	
                  10.8

                	
                  Shareholder and creditor
      notices

                	
                  31

                
	
                  10.9

                	
                  Consents

                	
                  31

                
	
                  10.10

                	
                  Maintenance of Security
      Interests

                	
                  31

                
	
                  10.11

                	
                  Notification of litigation

                	
                  31

                
	
                  10.12

                	
                  No amendment to Master
      Agreements

                	
                  31

                
	
                  10.13

                	
                  Confirmation of no default

                	
                  31

                
	
                  10.14

                	
                  Notification of default

                	
                  32

                
	
                  10.15

                	
                  Provision of further
      information

                	
                  32

                
	
                  10.16

                	
                  Due diligence

                	
                  32

                
	
                  10.17

                	
                  Further Information

                	
                  32

                
	
                  10.18

                	
                  New equity undertaking

                	
                  32

                
	
                  10.19

                	
                  Information on Trade Debt

                	
                  33

                
	
                  10.20

                	
                  Restriction on prepayments of the Nordea
      Facility

                	
                  33

                
	
                  10.21

                	
                  Information relating to chartering and financing
      of the Barge

                	
                  34

                
	
                  10.22

                	
                  Payments into retention
    account

                	
                  34

                
	
                  10.23

                	
                  Cashflow Forecasts and Cashflow
      Reports

                	
                  34

                
	
                  10.24

                	
                  Guarantor's consent and
      confirmation

                	
                  35

                
	
                  The Guarantor hereby:

                	
                  35

                	 
      
	
                  11

                	
                  Corporate undertakings

                	
                  35

                
	
                  11.1

                	
                  General

                	
                  35

                
	
                  11.2

                	
                  Maintenance of status

                	
                  35

                
	
                  11.3

                	
                  Negative undertakings

                	
                  35

                
	
                  12

                	
                  Insurance

                	
                  36

                
	
                  12.1

                	
                  General

                	
                  36

                
	
                  12.2

                	
                  Maintenance of obligatory
      insurances

                	
                  36

                
	
                  12.3

                	
                  Terms of obligatory
    insurances

                	
                  37

                
	
                  12.4

                	
                  Further protections for the
      Lender

                	
                  37

                
	
                  12.5

                	
                  Renewal of obligatory
      insurances

                	
                  37

                
	
                  12.6

                	
                  Copies of policies; letters of
      undertaking

                	
                  38

                
	
                  12.7

                	
                  Copies of certificates of
    entry

                	
                  38

                
	
                  12.8

                	
                  Deposit of original
policies

                	
                  39

                
	
                  12.9

                	
                  Payment of premiums

                	
                  39

                
	
                  12.10

                	
                  Guarantees

                	
                  39

                
	
                  12.11

                	
                  Compliance with terms of
      insurances

                	
                  39

                
	
                  12.12

                	
                  Alteration to terms of
      insurances

                	
                  39

                
	
                  12.13

                	
                  Settlement of claims

                	
                  39

                
	
                  12.14

                	
                  Provision of copies of
      communications

                	
                  40

                
	
                  12.15

                	
                  Provision of information

                	
                  40

                
	
                  12.16

                	
                  Mortgagee's interest, additional
      perils

                	
                  40

                
	
                  13

                	
                  Ship covenants

                	
                  40

                
	
                  13.1

                	
                  General

                	
                  40

                
	
                  13.2

                	
                  Ship's name and
registration

                	
                  40

                
	
                  13.3

                	
                  Repair and classification

                	
                  41

                
	
                  13.4

                	
                  Modification

                	
                  41

                
	
                  13.5

                	
                  Removal of parts

                	
                  41

                
	
                  13.6

                	
                  Surveys

                	
                  41

                
	
                  13.7

                	
                  Inspection

                	
                  41

                
	
                  13.8

                	
                  Prevention of and release from
      arrest

                	
                  42

                
	
                  13.9

                	
                  Compliance with laws etc.

                	
                  42

                
	
                  13.10

                	
                  Provision of information

                	
                  42

                
	
                  13.11

                	
                  Notification of certain
    events

                	
                  43

                
	
                  13.12

                	
                  Restrictions on chartering, appointment of
      managers etc.; undertaking to replace or extend
      charterparties

                	
                  43

                
	
                  13.13

                	
                  Notice of Mortgage

                	
                  44

                
	
                  13.14

                	
                  Sharing of Earnings

                	
                  44

                
	
                  14

                	
                  Financial covenants

                	
                  44

                
	
                  14.1

                	
                  Definitions

                	
                  44

                
	
                  14.2

                	
                  Financial covenants

                	
                  44

                
	
                  15

                	
                  Security cover

                	
                  45

                
	
                  15.1

                	
                  Minimum required security
    cover

                	
                  45

                
	
                  15.2

                	
                  Provision of additional security;
      prepayment

                	
                  45

                
	
                  15.3

                	
                  Value of additional vessel
      security

                	
                  46

                
	
                  15.4

                	
                  Valuations binding

                	
                  46

                
	
                  15.5

                	
                  Provision of information

                	
                  46

                
	
                  15.6

                	
                  Payment of valuation
    expenses

                	
                  46

                
	
                  16

                	
                  Payments and calculations

                	
                  46

                
	
                  16.1

                	
                  Currency and method of
    payments

                	
                  46

                
	
                  16.2

                	
                  Payment on non-Business Day

                	
                  46

                
	
                  16.3

                	
                  Basis for calculation of periodic
      payments

                	
                  47

                
	
                  16.4

                	
                  Lender accounts

                	
                  47

                
	
                  16.5

                	
                  Accounts prima facie
    evidence

                	
                  47

                
	
                  16.6

                	
                  Source of funds

                	
                  47

                
	
                  17

                	
                  Application of receipts

                	
                  47

                
	
                  17.1

                	
                  Normal order of application

                	
                  47

                
	
                  17.2

                	
                  Variation of order of
      application

                	
                  48

                
	
                  17.3

                	
                  Notice of variation of order of
      application

                	
                  48

                
	
                  17.4

                	
                  Appropriation rights
    overridden

                	
                  48

                
	
                  18

                	
                  Application of Earnings

                	
                  48

                
	
                  18.1

                	
                  Payment of Earnings

                	
                  48

                
	
                  18.2

                	
                  Location of accounts

                	
                  48

                
	
                  18.3

                	
                  Debits for expenses etc.

                	
                  49

                
	
                  19

                	
                  Events of Default

                	
                  49

                
	
                  19.1

                	
                  Events of Default

                	
                  49

                
	
                  19.2

                	
                  Actions following an Event of
      Default

                	
                  51

                
	
                  19.3

                	
                  Termination of Commitment

                	
                  51

                
	
                  19.4

                	
                  Acceleration of the
Advances

                	
                  52

                
	
                  19.5

                	
                  Multiple notices; action without
      notice

                	
                  52

                
	
                  19.6

                	
                  Exclusion of Lender/Swap Bank
      liability

                	
                  52

                
	
                  19.7

                	
                  Interpretation

                	
                  52

                
	
                  20

                	
                  Fees and expenses

                	
                  52

                
	
                  20.1

                	
                  Arrangement fee

                	
                  52

                
	
                  20.2

                	
                  Costs of negotiation, preparation
      etc.

                	
                  52

                
	
                  20.3

                	
                  Costs of variations, amendments, enforcement
      etc.

                	
                  52

                
	
                  20.4

                	
                  Certification of amounts

                	
                  53

                
	
                  21

                	
                  Indemnities

                	
                  53

                
	
                  21.1

                	
                  Indemnities regarding borrowing and repayment of
      the Advance

                	
                  53

                
	
                  21.2

                	
                  Breakage costs

                	
                  53

                
	
                  21.3

                	
                  Miscellaneous indemnities

                	
                  53

                
	
                  21.4

                	
                  Currency indemnity

                	
                  54

                
	
                  21.5

                	
                  Application to Master
      Agreements

                	
                  54

                
	
                  21.6

                	
                  Certification of amounts

                	
                  54

                
	
                  22

                	
                  No set-off or Tax Deduction; value added
      tax

                	
                  54

                
	
                  22.1

                	
                  Definitions

                	
                  54

                
	
                  22.2

                	
                  No set-off and counterclaim

                	
                  55

                
	
                  22.3

                	
                  Tax gross-up

                	
                  55

                
	
                  22.4

                	
                  Tax indemnity

                	
                  55

                
	
                  22.5

                	
                  Tax Credit

                	
                  56

                
	
                  22.6

                	
                  Stamp taxes

                	
                  56

                
	
                  22.7

                	
                  Value added tax

                	
                  56

                
	
                  23

                	
                  Illegality, etc.

                	
                  56

                
	
                  23.1

                	
                  Illegality

                	
                  56

                
	
                  23.2

                	
                  Notification and effect of
      illegality

                	
                  57

                
	
                  23.3

                	
                  Mitigation

                	
                  57

                
	
                  24

                	
                  Increased costs

                	
                  57

                
	
                  24.1

                	
                  Definitions

                	
                  57

                
	
                  24.2

                	
                  Increased Costs

                	
                  58

                
	
                  24.3

                	
                  Optional prepayment

                	
                  58

                
	
                  25

                	
                  Set-off

                	
                  59

                
	
                  25.1

                	
                  Set-off of matured or contingent
      liabilities

                	
                  59

                
	
                  25.2

                	
                  Existing rights unaffected

                	
                  59

                
	
                  25.3

                	
                  No Security Interest

                	
                  59

                
	
                  26

                	
                  Transfers and changes in lending
      office

                	
                  59

                
	
                  26.1

                	
                  Transfer by Borrowers

                	
                  59

                
	
                  26.2

                	
                  Assignment by Lender

                	
                  59

                
	
                  26.3

                	
                  Rights of assignee

                	
                  59

                
	
                  26.4

                	
                  Sub-participation; subrogation
      assignment

                	
                  60

                
	
                  26.5

                	
                  Disclosure of information

                	
                  60

                
	
                  26.6

                	
                  Change of lending office

                	
                  60

                
	
                  27

                	
                  Variations and waivers

                	
                  60

                
	
                  27.1

                	
                  Variations, waivers etc. by
      Lender

                	
                  60

                
	
                  27.2

                	
                  Exclusion of other or implied
      variations

                	
                  61

                
	
                  28

                	
                  Notices

                	
                  61

                
	
                  28.1

                	
                  Method and delivery

                	
                  61

                
	
                  28.2

                	
                  Addresses

                	
                  61

                
	
                  28.3

                	
                  Receipt

                	
                  62

                
	
                  28.4

                	
                  Electronic communication

                	
                  62

                
	
                  28.5

                	
                  Service Documents

                	
                  62

                
	
                  28.6

                	
                  Valid notices

                	
                  63

                
	
                  29

                	
                  Joint and several liability

                	
                  63

                
	
                  29.1

                	
                  General

                	
                  63

                
	
                  29.2

                	
                  No impairment of Borrower's
      obligations

                	
                  63

                
	
                  29.3

                	
                  Principal debtors

                	
                  63

                
	
                  29.4

                	
                  Subordination

                	
                  63

                
	
                  29.5

                	
                  Borrower's required action

                	
                  64

                
	
                  30

                	
                  Relationship between the Lender and the Swap
      Bank

                	
                  64

                
	
                  31

                	
                  Supplemental

                	
                  64

                
	
                  31.1

                	
                  Rights cumulative,
      non-exclusive

                	
                  64

                
	
                  31.2

                	
                  Invalidity

                	
                  64

                
	
                  31.3

                	
                  Counterparts

                	
                  64

                
	
                  31.4

                	
                  Third party rights

                	
                  65

                
	
                  31.5

                	
                  Entire Agreement

                	
                  65

                
	
                  32

                	
                  Governing law

                	
                  65

                
	
                  33

                	
                  Jurisdiction

                	
                  65

                
	
                  33.1

                	
                  Jurisdiction of the English
      courts

                	
                  65

                
	
                  33.2

                	
                  Proceedings in other
      jurisdictions

                	
                  65

                
	
                  33.3

                	
                  Waiver of objections

                	
                  65

                
	
                  34

                	
                  Service of process

                	
                  65

                
	
                  34.1

                	
                  Address for service

                	
                  65

                
	
                  34.2

                	
                  Agreed method of service

                	
                  65

                

        

      

      
         

      

     

    Loan
Agreement

     

     

    Dated
    11 February 2010

     

     

    Between

     

    
      	
              (1)  

            	
              BHOBO One Ltd., a
      Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
  Bermuda;

            

    

     

    
      	
              (2)  

            	
              BHOBO Two Ltd., a
      Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
  Bermuda;

            

    

     

    
      	
              (3)  

            	
              BHOBO Three Ltd., a
      Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
  Bermuda;

            

    

     

    
      	
              (4)  

            	
              RMJ OBO Shipping Ltd., a
      Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
  Bermuda;

            

    

     

    
      	
              (5)  

            	
              Sagamore Shipping Ltd.,
      a Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960 and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08,
  Bermuda;

            

    

     

    
      	
              (6)  

            	
              OBO Holdings Ltd., a
      Marshall Islands company of Trust Company Complex, Ajeltake Island,
      Majuro, Marshall Islands MH96960l and whose principal office is at Par La
      Ville Place, 14 Par-La-Ville Road, Hamilton HM08, Bermuda (OBO Holdings and
      together with BHOBO One Ltd., BHOBO Two Ltd., BHOBO Three Ltd., RMJ OBO
      Shipping Ltd. and Sagamore Shipping Ltd. are hereinafter referred to as
      the OBO
      Borrowers);

            

    

     

    
      	
              (7)  

            	
              Boss Tankers Ltd., a
      Marshall Islands company whose registered offices are at Trust Company
      Complex, Ajeltake Island, Majuro, Marshall Islands MH96960 and whose
      principal office is at Par La Ville Place, 14 Par-La-Ville Road, Hamilton
      HM08, Bermuda (Boss
      Tankers)

            

    

     

    
      	
              (8)  

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

            

    

     

    
      	
              (9)  

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

            

    

     

    
      	
              (10)  

            	
              Anawan Shipping
      Corp., being a
      corporation incorporated in the Marshall Islands whose registered offices
      are at Trust Company Complex, Ajeltake Island, Majuro, Marshall Islands
      MH96960 and whose principal office is at Par la Ville Place, 14 Par la
      Ville Road, Hamilton HM 08, Bermuda (Anawam and together with
      Boss Tankers, Agawam, Aquidneck are hereinafter referred to as the Original
      Borrowers);

            

    

     

    
      	
              (11)  

            	
              Isabelle Shipholding
      Corp., being a
      corporation incorporated in Liberia whose registered offices are at 80
      Broad Street, Monrovia, Republic of Liberia (Isabelle and together
      with Boss Tankers, Agawam, Aquidneck and Anawam are hereinafter referred
      to as the Existing
      Borrowers);

            

    

     

    the OBO
Borrowers and the Existing Borrower as joint and several Borrowers (as that term
is defined below); and

     

    
      	
              (12)  

            	
              B+H Ocean Carriers Ltd.,
      a Liberian company of 3rd Floor, Par La Ville, 14 Par La Ville Road,
      Hamilton HMOP, Bermuda  (the
      Guarantor);

            

    

     

    
      	
              (13)  

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

            

    

     

     

    Background

     

    
      	
              A  

            	
              By
      a Loan Agreement dated 30 August 2007 (the Original Loan
      Agreement), the Lender made available to the Original Borrowers a
      loan facility of up to $25,500,000 (the Original Loan) to
      finance the ships named "Agawam", "Anawan" and "Aquidneck" (the Original
      Ships).

            

    

     

    
      	
              B  

            	
              By
      a Loan Agreement dated 7 December 2007 (the December Loan
      Agreement), the Lender made available to the Existing Borrowers a
      loan facility of up to $34,000,000 in respect of (a) the refinancing of
      the Original Loan, (b) the financing of the product tanker type vessel
      named "Pequod" (together with the Original Ships, the Existing Ships) and (c)
      the provision of finance for each of the Existing Ships to be converted
      from a single hull status to a fully IMO compliant double hull status (the
      Existing
      Loan).

            

    

     

    
      	
              C  

            	
              By
      a consent letter dated 20 August 2009 from the Lender addressed to, and
      acknowledged by, the Guarantor and the Existing Borrowers (the First Consent Letter),
      the Lender gave certain consents for the benefit of the Existing
      Borrowers, and the Guarantor and the Existing Borrowers gave certain
      undertakings to the Lender and in particular agreed that any failure by
      them to comply with any of their respective obligations under the letter
      would (among other things) entitle the Lender to increase the rate of
      interest applicable to all Advances (as defined in the Existing Loan
      Agreement) to a rate of 10% per
annum.

            

    

     

    
      	
              D  

            	
              By
      a consent letter dated 16 November 2009 from the Lender addressed to, and
      acknowledged by, the Guarantor and the Existing Borrowers (the Second Consent Letter),
      the Lender gave certain further consents for the benefit of the Existing
      Borrowers, and the Guarantor and the Existing Borrowers agreed that with
      effect from 19 November 2009 the rate of interest applicable to the
      Advances (as defined in the Existing Loan Agreement) would be increased to
      a rate of 10% per annum and the Existing Loan would be repayable on
      demand.  The December Loan Agreement, the First Consent Letter
      and the Second Consent Letter are together referred to as the Existing Loan
      Agreement.

            

    

     

    
      	
              E  

            	
              The
      Existing Borrowers have requested and the Lender has agreed, subject to
      the terms of this Agreement, to make certain amendments to the Existing
      Loan Agreement, inter alia, to (i) introduce BHOBO One Ltd., BHOBO
      Two Ltd., BHOBO Three Ltd., RMJ OBO Shipping Ltd., Sagamore Shipping Ltd.
      and OBO Holdings as joint and several borrowers (ii) reschedule the
      repayment of the balance of the Existing Loan, (iii) change the basis
      of calculation of interest applicable to the Advances (as defined in the
      Existing Loan Agreement) and (iv) provide additional security to secure
      the Secured Liabilities.

            

    

     

    
      	
              F  

            	
              The
      Swap Bank has agreed to enter into a Deed of Amendment and Accession of
      the Existing Master Agreement pursuant to which the OBO Borrowers will
      accede to the Existing Master
Agreement.

            

    

     

    
      	
              G  

            	
              By
      a Guarantee dated 7 December 2007 (the Guarantee), the
      Guarantor guaranteed the liabilities of the Existing Borrowers to the
      Lender and the Swap Bank under the Finance Documents (as defined in the
      Existing Loan Agreement).

            

    

     

    
      	
              H  

            	
              The
      Guarantor enters into this Agreement to confirm that the Existing Loan
      Agreement will be replaced and superseded by this Agreement and confirms
      that the Guarantee shall extend to guarantee the Secured Liabilities as
      defined in this Agreement and shall remain in full force and effect as
      amended and extended by the terms of this
  Agreement.

            

    

     

     

    It
is agreed

     

     

    
      	
              1  

            	
              Definitions
      and interpretation

            

    

     

    
      	
              1.1  

            	
              Definitions

            

    

     

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

     

     Account Charge means in
respect of each Ship a deed creating second priority security in respect of the
relevant Earnings Account executed by the relevant Ship Owning Borrower in
favour of the Lender in form satisfactory to the Lender.

     

    Advance means an amount which
shall not exceed the Commitment and the principal amount outstanding in respect
thereof from time to time.

     

    Agent means Nordea Bank Norge
ASA in its capacity as agent on behalf of the lenders under the Nordea
Facility.

     

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

     

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

     

     Assignment Agreement means a
second priority assignment agreement executed by the each Ship Owning Borrower
assigning the Earnings, Insurances, certain bank account of the Ship Owning
Borrowers with Nordea and the Charter Guarantees in respect of each Ship in
favour of the Lender in form satisfactory to the Lender.

     

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

     

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

     

    
      	
              (i)  

            	
              5
      February 2010 (or such later date as the Lender may agree with the
      Borrowers); or

            

    

     

    
      	
              (ii)  

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

            

    

     

    Barge means MV “Safecom 1”,
being an accommodation barge to be delivered to Straits Offshore Ltd. of Palm
Grove House, Tortola, BVI and to be registered in a ship registry acceptable to
the Lender.

     

     Borrowers means each
of:

     

    
      	
              (a)  

            	
              the
      Ship Owning Borrowers;

            

    

     

    
      	
              (b)  

            	
              OBO
      Holdings; and

            

    

     

    
      	
              (c)  

            	
              the
      Existing Borrowers.

            

    

     

    Boss Tankers Account means an
account in the name of Boss Tankers Ltd. with the Lender with account no.
39452104 or any other account which is designated by the Lender as the Boss
Tankers Account for the purposes of this Agreement.

     

    Boss Tankers Account Charge
means the deed creating first priority security in respect of the Boss Tankers
Account executed by Boss Tankers Ltd. in favour of the Lender in form
satisfactory to the Lender.

     

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

     

     Cash has the meaning given to
it in Clause 15.

     

     Cash Equivalents has the
meaning given to it in Clause 15.

     

     Charterers means:

     

    
      	
               
      

            	
              (a)

            	
              in
      respect of each of MV “Rip Hudner”, MV “Bonnie Smithwick”, MV “Searose G”
      and “Roger M. Jones”, TTMI Sarl. of Geneva,
  Switzerland;

            

    

     

    (b)           in
respect of MT “Sagamore”, ENOC Supply & Trading LLC of Dubai;
and

     

    (c)           any
other charterer of any of the Ships as approved by the Lender from time to
time.

     

    Charter Guarantee means the
guarantees granted by the relevant Charter Guarantor in favour of the relevant
Ship Owning Borrower as security for due performance of all the relevant
Charterers obligations under the relevant Charterparty.

     

    Charter Guarantor
means:

     

    
      	
               
      

            	
              (a)

            	
              in
      respect of (i) MV “Rip Hudner”, (ii) MV “Bonnie Smithwick” and (iii) MV
      “Searose G”, Sempra Energy of 101 Ash Street, San Diego,
      U.S.A.;

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      respect of MV “Roger M. Jones”; The Royal Bank of Scotland
      plc;

            

    

     

    
      	
               
      

            	
              (c)

            	
              in
      respect of MT  “Sagamore”, ENOC Supply & Trading LLC of
      Dubai, however only to the extent that the ENOC Supply & Trading LLC
      has nominated another company as charterers under the Charterparty for
      MT  “Sagamore”; and

            

    

     

    
      	
              (d)  

            	
              any
      other charter guarantor for any of the Vessels, as approved by the Agent
      (on behalf of the Lenders) from time to
time.

            

    

     

     Charterparty
means:

     

    
      	
              (a)  

            	
              in
      respect of each of MV “Rip Hudner” and MV “Bonnie Smithwick”, the time
      charterparties dated 4 February 2005, respectively, made between BHOBO Two
      and BHOBO One (as owners), respectively, and TTMI Sarl. (as charterers),
      for a period of six (6) years at a net daily charter rate of not less than
      USD 26,600 during year 1, USD 24,600 during year 2, USD 23,600 during year
      3, USD 22,600 during year 4, a USD 20,600 during year 5 and USD 24,400
      during year 6;

            

    

     

    
      	
              (b)  

            	
              in
      respect of MV “Searose G”, the time charterparty dated 4 February 2005
      made between BHOBO Three (as owner) and TTMI Sarl. (as charterers), for a
      charter period of six (6) years at a net daily charter rate of not less
      than USD 26,000 during year 1, USD 24,000 during year 2, USD 23,000 during
      year 3, USD 22,000 during year 4, USD 20,000 during year 5 and USD 24,400
      during year 6 and with a 35.00% profit share in years 2 –
    5;

            

    

     

    
      	
              (c)  

            	
              in
      respect of MV “Roger M. Jones”, the time charterparty dated 28 May 2008
      made between RMJ OBO Shipping Ltd. (as owner) and TTMI Sarl (as
      charterers), for a period of three (3) years commencing on 13 October
      2009, at a daily charter rate of not less than USD
  31,140;

            

    

     

    
      	
              (d)  

            	
              in
      respect of MV “Sagamore”, the time charterparty made or to be made between
      Sagamore Shipping Ltd. (as owner) and ENOC Supply & Trading LLC (as
      charterers), for a charter period of three (3) years commencing at the
      relevant Drawdown Date, at a daily charter rate of not less than USD
      21,500 (less 3.75% commission);

            

    

     

    
      	
              (e)  

            	
              any
      other time charterparty between the relevant Borrower and a
      Charterer,

            

    

     

     in any
event, in form and substance as approved by the Lender.

     

     Charterparty Assignment means
a second priority charterparty assignment executed by the each Ship Owning
Borrower assigning the Charterparty in respect of each Ship in favour of the
Lender in form satisfactory to the Lender.

     

     Commitment means $3,975,230 as
that amount may be reduced, cancelled or terminated in accordance with this
Agreement.

     

     Compliance Certificate means a
notice in the form of Schedule 5.

     

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

     

     Contractual Currency has the
meaning given in Clause 21.4.

     

     Deeds of Covenant means, in
relation to each Ship, a second priority deed of covenant collateral to the
Mortgage on that Ship executed by the relevant Ship Owning Borrower in favour of
the Lender in form satisfactory to the Lender.

     

    Designated Transaction means a
transaction which fulfils the following requirements1:

     

    
      	
              (a)  

            	
              it
      was entered into by (i) the Borrowers pursuant to the Existing Master
      Agreement with the Swap Bank or (ii) the OBO Borrowers pursuant to the
      Nordea Facility;;

            

    

     

    
      	
              (b)  

            	
              its
      purpose was the hedging of (i) the Existing Borrowers' exposure under the
      Existing Loan Agreement or (ii) the OBO Borrowers' exposure under the
      Nordea Facility, to fluctuations in LIBOR arising from the funding of the
      advances thereunder (or any part thereof) for a period expiring no later
      than the final repayment date relating to the last advance thereunder to
      be repaid; and

            

    

     

    
      	
              (c)  

            	
              in
      respect of the Designated Transactions under the Existing Loan Agreement
      only, it was designated by (i) the Existing Borrowers, by delivery by the
      Existing Borrowers to the Swap Bank and the Lender of a notice of
      designation, as a Designated Transaction for the purposes of the 'Finance
      Documents' (as defined in the Existing Loan Agreement), in the form set
      out in Schedule 4 to the Existing Loan
Agreement

            

    

     

    It  is
acknowledged that the Designated Transaction entered into under the Existing
Master Agreement is the transaction effective as of 7 September 2007 with
transaction no. 1235290TS/1235291TS.

     

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

     

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

     

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

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

     Earnings Accounts means in
relation to each Ship, an account in the name of the Ship Owning Borrower owning
that Ship and held with Nordea Bank Finland plc, London branch and designated as
follows:

     

    
      	
              (i)  

            	
              account no. 52862102 in the name
      of BHOBO One Ltd.

            

    

     

    
      	
              (ii)  

            	
              account
      no. 52863102 in the name of BHOBO Two
Ltd.

            

    

     

    
      	
              (iii)  

            	
              account
      no. 52864102 in the name of BHOBO Three
Ltd.

            

    

     

    
      	
              (iv)  

            	
              account
      no. 53182102 in the name of RMJ OBO Shipping
  Ltd.

            

    

     

    
      	
              (v)  

            	
              account
      no. 53272102 in the name of Sagamore Shipping
  Ltd.

            

    

     

    or any
other account which is designated by the Lender as the Earnings Account in
relation to the Ship for the purposes of this Agreement.

     

     Effective Date means the date
on which the Lender issues the Effective Date Notice.

     

     Effective Date Notice means a
notice in the form set out in Schedule 4.

     

     Environmental Claim
means:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

     Environmental Incident
means:

     

    
      	
              (a)  

            	
              any
      release of Environmentally Sensitive Material from a Ship;
    or

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

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

     

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

     

     Event of Default means any of
the events or circumstances described in Clause 19.1.

     

     Excess Cash means (measured
quarterly) any amount of Cash and Cash Equivalents in excess of the aggregate
amount of (i) $10,000,000 and (ii) provisions for dry-docking for the
following twelve (12) months for the Ships (as agreed for the purposes of the
Nordea Facility).

     

     Existing Borrowers means
Agawam Shipping Corp., Aquidneck Shipping Corp., Anawan Shipping Corp., Isabelle
Shipholdings Corp. and Boss Tankers Ltd.

     

     Existing Loan Agreement means
the loan facility agreement dated 7 December 2007 between the Existing
Borrowers and the Lender (as lender and swap bank) providing for a
$34 million loan facility relating to four MR product tankers as
supplemented by a consent letter dated 20 August 2009 from the Lender and agreed
to and acknowledged by the Guarantor and the Existing Borrowers, pursuant to
which the Lender, the Guarantor and the Existing Borrowers agreed that any
failure of the Guarantor or the Existing Borrowers to comply with any of its
obligations under the letter would entitle the Lender to increase the rate of
interest applicable to all Advances (as defined in the Existing Loan Agreement)
to a rate of 10% per annum (the Consent Letter) and as further supplemented by a
letter dated 16 November 2009 from the Lender and acknowledged and agreed to by
the Guarantor and the Existing Borrowers, pursuant to which the Lender exercised
its right to charge interest on the Advances (as defined in the Existing Loan
Agreement) to a rate of 10% per annum and declared the Existing Loan shall be
payable on demand.

     

     Existing Master Agreement
means the master agreement dated 31 August 2007 (as acceded to by
Isabelle Shipholdings Corp. on 7 December 2007) between the Swap Bank and the
Existing Borrowers.

     

     Existing Swap Transactions
means the Existing Master Agreement, each transaction entered into
pursuant thereto and the indemnity between the Borrowers and the Lender dated 31
August 2007 relating thereto.

     

     Finance Documents
means:

     

    
      	
              (a)  

            	
              this
      Agreement;

            

    

     

    
      	
              (b)  

            	
              the
      Guarantee;

            

    

     

    
      	
              (c)  

            	
              the
      Second Deed of Accession;

            

    

     

    
      	
              (d)  

            	
              the
      Mortgages;

            

    

     

    
      	
              (e)  

            	
              the
      Deeds of Covenant;

            

    

     

    
      	
              (f)  

            	
              the
      Assignment Agreements and any notices and acknowledgements to be delivered
      thereunder;

            

    

     

    
      	
              (g)  

            	
              the
      Charterparty Assignments and any notices and acknowledgements to be
      delivered thereunder;

            

    

     

    
      	
              (h)  

            	
              the
      Account Charges;

            

    

     

    
      	
              (i)  

            	
              the
      Share Pledge 1 and any documents to be delivered
    thereunder;

            

    

     

    
      	
              (j)  

            	
              the
      Share Pledge 2 and any documents to be delivered
    thereunder;

            

    

     

    
      	
              (k)  

            	
              the
      Nordan Share Pledge and any documents to be delivered
      thereunder;

            

    

     

    
      	
              (l)  

            	
              the
      Retention Account Charge Agreement and any notices and acknowledgements to
      be delivered thereunder;

            

    

     

    
      	
              (m)  

            	
              the
      Boss Tankers Account Charge;

            

    

     

    
      	
              (n)  

            	
              the
      Safecom Assignment Agreement;

            

    

     

    
      	
              (o)  

            	
              the
      Nordan Co-ordination Agreement;

            

    

     

    
      	
              (p)  

            	
              the
      Nordea Co-ordination Agreement;

            

    

     

    
      	
              (q)  

            	
              the
      Safecom Co-ordination Agreement; and
;

            

    

     

    
      	
              (r)  

            	
              the
      Master Agreement and each transaction entered into under or pursuant
      thereto;

            

    

     

    
      	
              (s)  

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

            

    

     

     Finance Parties means the
Lender and the Swap Bank.

     

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

            

    

     

    
      	
              (f)  

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

            

    

     

    Group means the Guarantor and
its subsidiaries.

     

     Guarantee means
the  guarantee dated 7 December 2007 executed by the Guarantor in
favour of the Lender.

     

     Guarantor means B+H Ocean
Carriers Ltd., a Liberian company of 3rd Floor, Par La Ville, 14 Par La Ville
Road, Hamilton HMOP, Bermuda.

     

     Insurances means, in relation
to a Ship:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

     Interest Period means a period
determined in accordance with Clause 5.

     

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

     

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

     

     Lender means Bank of Scotland
plc (company no. SC327000) whose registered office is at The Mound, Edinburgh
EH1 1YZ and acting for the purposes of this Agreement through its offices at New
Uberior House, 11 Earl Grey Street, Edinburgh EH3 9BN, or its successor or
assign.

     

    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 Moneyline Telerate Page 3750 at or about 11.00
      a.m. (London time) on the Quotation Date for that Interest Period (and,
      for the purposes of this Agreement, "Moneyline Telerate Page
      3750" means the display designated as "Page 3750" on the Telerate
      Service or such other page as may replace Page 3750 on that service for
      the purpose of displaying rates comparable to that rate or on such other
      service as may be nominated by the British Bankers' Association as the
      information vendor for the purpose of displaying British Bankers'
      Association Interest Settlement Rates for Dollars);
  or

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

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

     

     Margin means six point five
per cent. (6.5%) per annum.

     

    Market Value means the fair
market value of each of the Ships in US Dollars, being the average of valuations
of the respective Ship obtained from two (2) Approved Panel Brokers, with or
without physical inspection of the Ships (as the Lender may require) on the
basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing buyer and seller, on an “as is, where is”
basis, free of any existing charter or other contract of employment and/or pool
arrangement.

     

    Master Agreement means the
Existing Master Agreement as amended and acceded to pursuant to the Second Deed
of Accession and includes all Designated Transactions from time to time entered
into and Confirmations from time to time exchanged under that master
agreement.

     

     Mortgages means, in relation
to each Ship, a second priority Bahamian ship mortgage on that Ship executed by
the relevant Ship Owning Borrower in favour of the Lender in form satisfactory
to the Lender.

     

     Negotiation Period has the
meaning given in Clause 4.6.

     

     Nordan means Nordan OBO 2
Inc., a Liberian corporation.

     

    Nordan Co-ordination Agreement
means the co-ordination agreement to be entered into between the Lender, the
Agent, Nordea Bank Norge ASA (as lender under a certain USD 8,000,000 term loan
facility agreement dated 5 September 2006 (as amended) between Nordea Bank Norge
ASA and Seapowet Trading Ltd.) and Seapowet Trading Ltd., in respect of the
Nordan Share Pledge, in form and substance satisfactory to the
Lender.

     

    Nordan Senior Security Documents
means (i) the first priority share pledge dated 6 September 2006 executed
by STL in favour of the Nordea Bank Norge ASA (as lender under a certain USD
8,000,000 term loan facility agreement dated 5 September 2006 (as amended)
between Nordea Bank Norge ASA and Seapowet Trading Ltd.)  and (ii) the
second priority share pledge dated 14 December 2009 executed by STL in favour of
the Agent, each in relation to 50% of the shares in Nordan.

     

    Nordan Share Pledge means a
share pledge agreement for a third priority pledge over 50% of the shares in
Nordan OBO 2 Inc. (Liberia) to be executed by STL in favour of the Lender, in
form and substance satisfactory to the Lender and subject to the approval of
such share pledge by the first priority and second priority pledgees over such
shares.

     

     Nordea Co-ordination Agreement
means the Co-ordination Agreement dated on or about the date hereof
between the Lender, the Borrowers and the Agent.

     

     Nordea Facility means the
USD 202,000,000 Reducing Revolving Credit Facility Agreement dated
29 August 2006 (as amended by addendum no. 1 dated 10 October 2008,
addendum no. 2 and waiver agreement dated 17 July 2009 and addendum
no. 3 dated on or about the date of this Agreement) between OBO Holdings
Ltd and the Ship Owning Borrowers as borrowers, certain banks and financial
institution as lenders, Nordea Bank Finland plc as swap bank, Nordea Bank Norge
ASA as bookrunner, agent, arranger and underwriter and DVB Bank America NV, the
Lender and HSB Nordbank as co-arrangers.

     

     Payment Currency has the
meaning given in Clause 21.4.

     

     Permitted Security Interests
means:

     

    
      	
              (a)  

            	
              Security
      Interests created by the Finance
Documents;

            

    

     

    
      	
              (b)  

            	
              Security
      Interests created by the Senior Security
  Documents;

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              liens
      for salvage;

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

            	
              Security
      Interests in connection with financing of the
  Barge.

            

    

     

     Pertinent Document
means:

     

    
      	
              (a)  

            	
              any
      Finance Document;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

     Pertinent Jurisdiction, in
relation to a company, means:

     

    
      	
              (a)  

            	
              England
      and Wales;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

     Pertinent Matter
means:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

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

     

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

     

     Refinanced Amount has the
meaning given to it in Clause 3.4.

     

    Repayment Date means each
31 March, 30 June, 30 September and 31 December in each year up
to and including 2011.

     

    Retention Account means
account no. 6015.04.42640 with the Agent in the name of OBO Holdings
Ltd.

     

    Retention Account Charge
Agreement means the account charge collateral to this Agreement for the
second priority charge over the Retention Account to be executed by OBO Holdings
Ltd. in favour of the Lender as security for the Secured Liabilities, in form
and substance satisfactory to the Lender.

     

    Retention Account Senior Security
Document means the account charge dated 14 December 2009 executed by OBO
Holdings Ltd. in favour of the Agent creating a first priority charge over the
Retention Account.

     

     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.

     

    Safecom Assignment Agreement
means the assignment agreement to be executed by Straits Offshore Ltd. in favour
of the Lender collateral to this Agreement for the third priority assignment of
(i) any monies to be paid to Straits Offshore Ltd. for the operation and
chartering of the Barge and (ii) any sales proceeds to be received by Straits
Offshore Ltd. upon the sale or transfer of the Barge, in form and substance
satisfactory to the Lender and always subject to the approval by the first
priority and second priority assignees over such assets.

     

    Safecom Co-ordination
Agreement means the co-ordination agreement to be entered into between
the Agent, the Lender and Straits Offshore Ltd., in respect of i.e. the Safecom
Assignment Agreement, in form and substance satisfactory to the
Lender.

     

    Safecom Senior Security Documents
means a first priority assignment agreement to be entered into between
Straits Offshore Ltd. in favour of a third party lender and the second priority
assignment agreement dated 14 December 2009 executed by Straits Offshore Ltd. in
favour of the Agent for the second priority assignment of (i) any monies to be
paid to Straits Offshore Ltd. for the operation and chartering of the Barge and
(ii) any sales proceeds to be received by Straits Offshore Ltd. upon the sale or
transfer of the Barge.

     

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

     

     Secured Liabilities means
all:

     

    
      	
              (a)  

            	
              liabilities
      which the Borrowers, the Security Parties or any of them have, at the date
      of this Agreement or at any later time or times, under or in connection
      with any Finance Document or any judgment relating to any Finance
      Document;

            

    

     

    
      	
              (b)  

            	
              the
      liabilities of the Owner, the Borrower and the other Obligors to the
      Mortgagee under or pursuant to the Finance
  Documents;

            

    

     

    
      	
              (c)  

            	
              indebtedness
      of the Borrowers and each of them to the Mortgagee on any current or other
      account, including interest and bank
charges;

            

    

     

    
      	
              (d)  

            	
              other
      liabilities of the Borrowers and each of them to the Mortgagee;
      and

            

    

     

    
      	
              (e)  

            	
              costs
      and expenses (including legal fees) incurred by the Lender in connection
      with that indebtedness, those liabilities and any of the Finance
      Documents, on a full indemnity
basis,

            

    

     

     together
with interest at the Default Rate on those amounts from the date on which the
liability was incurred to the date of actual payment (both before and after
judgment); and for this purpose, there shall be disregarded any total or partial
discharge of these liabilities, or variation of their terms, which is effected
by, or in connection with, any bankruptcy, liquidation, arrangement or other
procedure under the insolvency laws of any country.

     

     Security Interest
means:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

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

     

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

     

    (a)           
the Secured Liabilities have been discharged in full;

     

    
      	
               
      

            	
              (b)

            	
              there
      is no amount is owing or has accrued (without yet having become due for
      payment) to the Lender; and

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      one of the Borrowers or any Security Party has any future or contingent
      liability to the Lender.

            

    

     

    Senior Security Documents
means the Senior Ship Security Documents, the Nordan Senior Security
Documents, the Share Pledge 1 Senior Security Document, the Share Pledge 2
Senior Security Document, the Retention Account Senior Security Document and the
Safecom Senior Security Document.

     

    
      	
               
      

            	
              Senior Ship Security
      Documents has the meaning given to the term 'Senior Mortgage
      Documents' in the Nordea Co-ordination
  Agreement.

            

    

     

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

     

    Share Pledge 1 means the share
pledge agreement for the second priority pledge of all of the shares (and any
dividends and distributions in respect of such shares) in OBO Holdings Ltd. to
be executed by the Guarantor in favour of the Lender, in form and substance
acceptable to the Lender and always subject to the approval by the first
priority pledgee over such shares.

     

    Share Pledge 1 Senior Security
Document means the share pledge agreement dated 14 December 2009 executed
by the Guarantor in favour of the Agent for the first priority pledge of all of
the shares (and any dividends and distributions in respect of such shares) in
OBO Holdings Ltd.

     

    Share Pledge 2 means the share
pledge agreement for the second priority pledge of all of the shares (and any
dividends and distributions in respect of such shares) in the Ship Owning
Borrowers to be executed by OBO Holdings Ltd. in favour of the Lender, in form
and substance acceptable to the Lender and always subject to the approval by the
first priority pledgee over such shares.

     

    Share Pledge 2 Senior Security
Document means the share pledge agreement dated 14 December 2009 executed
by OBO Holdings in favour of the Agent for the first priority pledge of all of
the shares (and any dividends and distributions in respect of such shares) in
the Ship Owning Borrowers.

     

     Shareholder means, in relation
to the Ship Owning Borrowers, OBO Holdings.

     

     Ship means each
of:

     

    
      	
              (a)  

            	
              m/v
      "Bonnie Smithwick" an 83,000 dwt OBO tanker built in 1993 with IMO number
      9050084 registered in the name of BHOBO One Ltd. under the Bahamas
      flag;

            

    

     

    
      	
              (b)  

            	
              m/v
      "Rip Hudner" an 83,000 dwt OBO tanker built in 1994 with IMO number
      9077111 registered in the name of BHOBO Two Ltd. under the Bahamas
      flag;

            

    

     

    
      	
              (c)  

            	
              m/v
      "Searose G" an 83,000 dwt OBO tanker built in 1994 with IMO number 9050096
      registered in the name of BHOBO Three Ltd. under the Bahamas
      flag;

            

    

     

    
      	
              (d)  

            	
              m/v
      "Roger M. Jones" a 75,000 dwt OBO tanker built in 1992 with IMO number
      9009396 registered in the name of RMJ OBO Shipping Ltd. under the Bahamas
      flag; and

            

    

     

    
      	
              (e)  

            	
              m/v
      "Sagamore" a 68,000 dwt tanker built in 1991 with IMO number 9002192
      registered in the name of Sagamore Shipping Ltd. under the Bahamas
      flag.

            

    

     

    Ship Management Agreement
means, in respect of each Ship, the BIMCO "SHIPMAN 98" Standard Ship Management
Agreement dated 1 July 2009 between the Approved Manager and the relevant Ship
Owning Borrower.

     

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

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (j)  

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

            

    

     

     STL means Seapowet Trading
Limited.

     

     Swap Bank means Bank of
Scotland plc.

     

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

     

     Total Loss means, in relation
to a Ship:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

     Total Loss Date means, in
relation to a Ship:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              the
      date of any compromise, arrangement or agreement made by or on behalf of
      the Ship Owning Borrower owning the Ship with the Ship's insurers in which
      the insurers agree to treat the Ship as a total loss;
  and

            

    

     

    
      	
              (c)  

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

            

    

     

    Transaction has the meaning
given in each Master Agreement.

     

    
      	
              1.2  

            	
              Interpretation

            

    

     

    In this
Agreement, unless otherwise specified:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (j)  

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

            

    

     

    
      	
              (k)  

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

            

    

     

    
      	
              (l)  

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

            

    

     

    
      	
              (m)  

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

            

    

     

    
      	
              (n)  

            	
              debt or indebtedness includes
      any obligation, whether incurred as principal or as surety, for the
      payment or repayment of money, whether present or future, actual or
      contingent and whether owed jointly or severally or in any other
      capacity;

            

    

     

    
      	
              (o)  

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

            

    

     

    
      	
              (p)  

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

            

    

     

    
      	
              (q)  

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

            

    

     

    
      	
              (r)  

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

            

    

     

    
      	
              (s)  

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

            

    

     

    
      	
              (t)  

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

            

    

     

    
      	
              (u)  

            	
              references to
      liabilities include any obligation whether incurred as principal or
      surety, whether or not in respect of indebtedness, whether present or
      future, actual or contingent and whether owed jointly or severally or in
      any other capacity;

            

    

     

    
      	
              (v)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    and month and monthly shall be construed
accordingly;

     

    
      	
              (w)  

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

            

    

     

    
      	
              (x)  

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

            

    

     

    
      	
              (y)  

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

            

    

     

    
      	
              (z)  

            	
              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;

            

    

     

    
      	
              (aa)  

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

            

    

     

    
      	
              (bb)  

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

            

    

     

    
      	
              (cc)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

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

     

    
      	
              (dd)  

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

            

    

     

    
      	
              (ee)  

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

            

    

     

     

    
      	
              2  

            	
              Facility

            

    

     

    
      	
              2.1  

            	
              Subject
      to the other provisions of this Agreement, with effect from the issuance
      by the Lender of the Effective Date Notice, the terms of and conditions
      applicable to the loan facility under the Existing Loan Agreement shall be
      replaced and superseded by the terms and the conditions set out in this
      Agreement and the amount of the outstanding advances under the Existing
      Loan Agreement shall be treated as having been advanced under, and as
      being subject to the terms of, this
Agreement.

            

    

     

    
      	
              2.2  

            	
              The
      provisions of this Clause 2 shall not take effect unless and until the
      Lender issues the Effective Date
Notice.

            

    

     

     

    
      	
              3  

            	
              Drawdown

            

    

     

    
      	
              3.1  

            	
              Request
      for Advance

            

    

     

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

     

    
      	
              3.2  

            	
              Availability

            

    

     

    The
conditions referred to in Clause 3.1 are that:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              the
      amount of the Advance shall not exceed the amount referred to in
      Clause 2;

            

    

     

    
      	
              (c)  

            	
              the
      amount of the Advance shall not exceed the
  Commitment;

            

    

     

    
      	
              (d)  

            	
              the
      amount of the Advance shall be used to repay the full amount of all
      outstanding advances under the Existing Loan Agreement together with
      accrued interest and breakage costs as at the Effective Date (the Refinanced Amount);
      and

            

    

     

    
      	
              (e)  

            	
              the
      Lender shall have issued the Effective Date
  Notice.

            

    

     

    
      	
              3.3  

            	
              Drawdown
      Notice irrevocable

            

    

     

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

     

    
      	
              3.4  

            	
              Disbursement
      of Advance by issuance of the Effective Date
  Notice

            

    

     

    Subject
to the provisions of this Agreement, on the Drawdown Date the Lender shall issue
the Effective Date Notice which shall constitute the making of the Advance for
the purpose of this Agreement and whereupon:

     

    
      	
              (a)  

            	
              the
      Lender shall be deemed to have made the Advance to the Borrowers in an
      amount equal to the Refinanced Amount and all the Borrowers shall at that
      time become indebted, as principal and direct obligors, to the Lender in
      that amount; and

            

    

     

    
      	
              (b)  

            	
              the
      Borrowers shall become obliged, as principal and direct obligors, to pay
      and discharge all amounts from time to time (whether before, on or after
      the Effective Date) falling due and payable under the Existing Loan
      Agreement other than the Refinanced
Amount.

            

    

     

     

    
      	
              4  

            	
              Interest

            

    

     

    
      	
              4.1  

            	
              Payment
      of normal interest

            

    

     

    Subject
to the provisions of this Agreement, interest on the Advance in respect of each
Interest Period shall be paid by the Borrowers on the last day of that Interest
Period.

     

    
      	
              4.2  

            	
              Normal
      rate of interest

            

    

     

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

     

    
      	
              (a)  

            	
              the
      Margin;

            

    

     

    
      	
              (b)  

            	
              LIBOR;
      and

            

    

     

    
      	
              (c)  

            	
              the
      Mandatory Cost;

            

    

     

    for that
Interest Period.

     

    
      	
              4.3  

            	
              Payment
      of accrued interest

            

    

     

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

     

    
      	
              4.4  

            	
              Notification
      of market disruption

            

    

     

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

     

    
      	
              4.5  

            	
              Suspension
      of drawdown.

            

    

     

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

     

    
      	
              4.6  

            	
              Negotiation
      of alternative rate of interest

            

    

     

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

     

    
      	
              4.7  

            	
              Application
      of agreed alternative rate of
interest

            

    

     

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

     

    
      	
              4.8  

            	
              Alternative
      rate of interest in absence of
agreement

            

    

     

    If an
alternative interest rate or alternative basis is not agreed within the
Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars or in
any available currency of the relevant Advance plus the Margin and (if
applicable) the Mandatory Cost; and the procedure provided for by this
Clause 4.8 shall be repeated if the relevant
circumstances are continuing at the end of the interest period so set by the
Lender.

     

    
      	
              4.9  

            	
              Notice
      of prepayment

            

    

     

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

     

    
      	
              4.10  

            	
              Prepayment

            

    

     

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

     

    
      	
              4.11  

            	
              Application
      of prepayment

            

    

     

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

     

     

    
      	
              5  

            	
              Interest
      Periods

            

    

     

    
      	
              5.1  

            	
              Commencement
      of Interest Periods

            

    

     

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

     

    
      	
              5.2  

            	
              Duration
      of normal Interest Periods

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              5.3  

            	
              Duration
      of Interest Periods for repayment
instalments

            

    

     

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

     

    
      	
              5.4  

            	
              Non-availability
      of matching deposits for Interest Period
  selected

            

    

     

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

     

     

    
      	
              6  

            	
              Default
      interest

            

    

     

    
      	
              6.1  

            	
              Payment
      of default interest on overdue
amounts

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              6.2  

            	
              Default
      rate of interest

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              6.3  

            	
              Calculation
      of default rate of interest

            

    

     

    The rates
referred to in Clause 6.2 are:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (i)  

            	
              LIBOR;
      or

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              6.4  

            	
              Notification
      of interest periods and default
rates

            

    

     

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

     

    
      	
              6.5  

            	
              Payment
      of accrued default interest

            

    

     

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

     

    
      	
              6.6  

            	
              Compounding
      of default interest

            

    

     

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

     

    
      	
              6.7  

            	
              Application
      to Master Agreements

            

    

     

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

     

     

    
      	
              7  

            	
              Repayment
      and prepayment

            

    

     

    
      	
              7.1  

            	
              Amount
      of repayment instalments

            

    

     

    
      	
              7.1.1  

            	
              Subject
      to Clause 7.1.2, the Borrowers shall
      repay the Advance in consecutive quarterly instalments of $100,000, the
      first repayment to be made on 31 March
  2010.

            

    

     

    
      	
              7.1.2  

            	
              If
      on any Repayment Date the condition set out in Clause 7.1.3 is not satisfied, the repayment which
      would otherwise be due on that date under Clause 7.1.1 shall be deferred until the first date
      thereafter on which that condition is satisfied. This does not prejudice
      the Borrowers’ obligation under Clause 7.3 to
      repay the full outstanding balance of the Advance on the final Repayment
      Date.

            

    

     

    
      	
              7.1.3  

            	
              The
      condition referred to in Clause 7.1.2 is that
      either:

            

    

     

    
      	
              (i)  

            	
              repayment
      of the deferred reductions as set out in paragraph (a) (i) and (a) (ii) of
      Clause 6.2 of the Nordea Facility (repayment of loan)
      shall have been made in full and the requirements of clause 20.2.3 of the
      Nordea Facility (minimum
      value) shall have been complied with;
or

            

    

     

    
      	
              (ii)  

            	
              the
      Nordea Facility shall have been fully repaid and
    discharged.

            

    

     

    
      	
              7.1.4  

            	
              References
      in Clauses 7.1.3, 7.2.2, 10.20 and 19 to the provisions of the Nordea Facility are
      to those provisions as in effect on the Effective Date.  No
      subsequent amendment to the Nordea Faciility provisions shall alter the
      Borrower's obligations under this
Agreement.

            

    

     

    
      	
              7.2  

            	
              Mandatory
      repayment of Excess Cash

            

    

     

    
      	
              7.2.1  

            	
              Any
      Excess Cash allocated to this Agreement shall, in the period commencing on
      the Effective Date under the Nordea Facility, be paid to the Lender to be
      applied in the order set out in Clause 17.1.

            

    

     

    
      	
              7.2.2  

            	
              The
      Borrowers or the Guarantor (as the case may be) shall provide the Lender
      with a calculation of Cash and Cash Equivalents (as required when
      providing a Compliance Certificate under Clause 10.13) no later than five (5) Business Days
      prior to each Repayment Date.  Any Excess Cash shall thereafter
      on the relevant Repayment Date be applied as
  follows:

            

    

     

    
      	
              (a)  

            	
              firstly
      in payment to the lenders under the Nordea Facility to reduce the deferred
      reductions as set out in paragraph a)(i) and (ii) of Clause 6.2 (Repayment
      of Loans) of the Nordea Facility until such deferred reductions have been
      reduced in full;

            

    

     

    
      	
              (b)  

            	
              secondly,
      after such deferred reductions under the Nordea Facility have been reduced
      in full, in payment to the Lender provided
that:

            

    

     

    
      	
              (i)  

            	
              in
      any calendar quarter (ending 31/3, 30/6, 30/9 and 31/12 in any year) the
      Lender shall not be entitled to receive more than USD 100,000 pursuant to
      this Clause 7.2.2(b) (which amount shall form part of (and not be in
      addition to) the quarterly repayment instalments set out in Clause 7.1.1;
      and

            

    

     

    
      	
              (ii)  

            	
              the
      Lender shall not be entitled to receive any amount under this Clause 7.2.2
      at any time when the OBO Borrowers are not in compliance with the
      requirements of Clause 20.3.3 (Minimum value) of the Nordea Faciliy;
      and

            

    

     

    
      	
              (c)  

            	
              thirdly,
      any remaining balance of any Excess Cash shall be distributed between the
      lenders under the Nordea Facility and the Lender on a pro rata basis
      calculated on basis of the outstanding amount under Nordea Facility and
      under this Agreement at the relevant time, however always observing the
      first priority status of the lenders under the Nordea
      Facility.

            

    

     

    
      	
              7.2.3  

            	
              If
      at any date when Excess Cash is to be paid to the Lender in accordance
      with this Clause 7, the amount standing to
      the credit of the Earnings Accounts is less than the Excess Cash to be
      paid to the Lender, the Borrowers shall procure the Guarantor to make a
      payment to the Lender in an amount equal to (a) the repayment instalment
      then due and payable on the Repayment Date or (b) the pro rata share of
      the Excess Cash to be paid to the Lender at such time (as the case may be
      and without prejudice to the joint and several obligation of the other
      Borrowers to make such repayment).

            

    

     

    
      	
              7.3  

            	
              Final
      Repayment Date

            

    

     

    On
31 December 2011 the Borrowers shall repay the full outstanding balance of
the Advance and shall also pay to the Lender all other sums then accrued or
owing under any Finance Document.

     

    
      	
              7.4  

            	
              Voluntary
      prepayment

            

    

     

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

     

    
      	
              7.5  

            	
              Conditions
      for voluntary prepayment

            

    

     

    The
conditions referred to in Clause 7.4 are that:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              if
      the prepayment is not made on the last day of an Interest Period, such
      fees as are specified in Clause
21.2.

            

    

     

    
      	
              7.6  

            	
              Effect
      of notice of prepayment

            

    

     

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

     

    
      	
              7.7  

            	
              Mandatory
      prepayment

            

    

     

    
      	
              7.7.1  

            	
              If
      a Ship becomes a Total Loss, the Borrowers shall be obliged to make a
      prepayment of the Advance equal to such proportion of the Advance then
      outstanding as is attributable to that Ship, and for these purposes 20% of
      the initial Advance is attributable to each of the five Ships. By way of
      example therefore, following a Total Loss and prepayment in respect of one
      Ship, the  prepayment required pursuant to this Clause 7.7.
      following a Total Loss of a second Ship shall be equal to 25% of the
      Advance. Such prepayment is subject to (i) the receipt by the Agent in
      full of the amount to be prepaid pursuant to Clause 7.1 (Mandatory prepayment –
      Total Loss and sale) of the Nordea Facility and (ii) the reduction in full
      of the deferred reductions as set out in paragraph a)(i) and (ii) of
      Clause 6.2 (Repayment of
      Loan) of the Nordea Facility. Any prepayment due to the Lender
      under this Clause 7.7.1 shall be made on the earlier of the date falling
      120 days after the Total Loss Date and the date of receipt by the Lender
      of the proceeds of insurance relating to such Total
  Loss.

            

    

     

    
      	
              7.7.2  

            	
              If,
      following the a Total Loss of a Ship and after the prepayment referred to
      in Clause 7.7.1, the security coverage ratio
      in Clause 15 is not satisfied, the provisions of Clause 15 shall
apply.

            

    

     

    
      	
              7.8  

            	
              Amounts
      payable on prepayment

            

    

     

    A
prepayment shall be made together with accrued interest (and any other amount
payable under Clause 19.2, Clause 21 or
otherwise) in respect of the amount prepaid and, if the prepayment is not made
on the last day of an Interest Period together with any sums payable under
Clause 21.1(b) but without premium or
penalty.

     

    
      	
              7.9  

            	
              Application
      of partial prepayment

            

    

     

    Each
partial prepayment of the Advance shall be applied in the order set out in
Clause 17.1.

     

    
      	
              7.10  

            	
              No
      reborrowing

            

    

     

    No amount
prepaid may be reborrowed.

     

     

    
      	
              8  

            	
              Conditions
      precedent

            

    

     

    
      	
              8.1  

            	
              Documents,
      fees and no default

            

    

     

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

     

    
      	
              (a)  

            	
              that,
      on or before the date of this
Agreement:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              that,
      on or before the service of the Drawdown Notice, the Lender receives the
      arrangement fee referred to in
Clause 20.1;

            

    

     

    
      	
              (d)  

            	
              that,
      on or before the service of any Drawdown Notice, the Lender has received
      payment of the expenses referred to in Clause 20.2; and

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (f)  

            	
              that,
      on the Drawdown Date, either (i) the Lender is satisfied that the
      Refinanced Amount does not exceed the Commitment or (ii) if the
      Lender has notified the Borrowers that the Refinanced Amount exceeds the
      Commitment, the Lender has received an amount equal to the excess from the
      Existing Borrowers in cleared
funds;

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

            	
              that,
      on or before the service of any Drawdown Notice, the Lender has received
      evidence, which shall be in form satisfactory to the Lender, (1) that STL
      is a 100% subsidiary (direct or indirect) of the Guarantor, (2) STL owns a
      50% equity interest in Nordan (3) that Nordan owns a 100% economic
      interest (via a bareboat charter with an option to purchase arrangement)
      in the vessel m.v. Seapowet, and Nordan's ownership interest is free of
      all liens and encumbrances, and (4) evidence of the terms and conditions
      governing the relationship of STL with the other shareholders of Nordan
      and (5) evidence of the terms of Nordan's option to purchase the vessel
      m.v. Seapowet;

            

    

     

    
      	
              (i)  

            	
              that,
      on or before the service of any Drawdown Notice, the Lender has received
      evidence, which shall be in form satisfactory to the Lender, that the
      amount secured by existing security interests in relation to the shares of
      STL (excluding security interests in favour of the Agent) does not exceed
      $2.5 million plus interest and
costs;

            

    

     

    
      	
              (j)  

            	
              that,
      on or before the service of any Drawdown Notice, the Lender has received
      such other information, which shall be in form satisfactory to the Lender,
      relating to the vessel m.v. Seapowet (including information relating to
      the terms of the loans or other claims secured on that vessel) as the
      Lender may request; and

            

    

     

    
      	
              (k)  

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

            

    

     

    
      	
              8.2  

            	
              Waivers
      of conditions precedent

            

    

     

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

     

     

    
      	
              9  

            	
              Representations
      and warranties

            

    

     

    
      	
              9.1  

            	
              General

            

    

     

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

     

    
      	
              9.2  

            	
              Status

            

    

     

    Each
Borrower is duly incorporated and validly existing and in good standing under
the laws of the Marshall Islands (in the case of OBO Holdings, the Original
Borrowers, Boss Tankers and the Ship Owning Borrowers) and Liberia (in the case
of Isabelle)

     

    
      	
              9.3  

            	
              Share
      capital and ownership

            

    

     

    
      	
              9.3.1  

            	
              Each
      of the Ship Owning Borrowers and Boss Tankers has an authorised share
      capital of $500 divided into 500 registered shares of $1 each, all of
      which shares have been issued fully paid, and the legal title and
      beneficial ownership of all those shares is held, free of any Security
      Interest or other claim, by the
Shareholder.

            

    

     

    
      	
              9.3.2  

            	
              Each
      of the Existing Borrowers has an authorised share capital of $500 divided
      into 500 registered shares of $1 each, all of which shares have been
      issued fully paid, and the legal title and beneficial ownership of all
      those shares is held, free of any Security Interest or other claim, by the
      Shareholder.

            

    

     

    
      	
              9.3.3  

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

            

    

     

    
      	
              9.3.4  

            	
              STL
      has the corporate capacity, and has taken all corporate action and
      obtained all consents necessary to be registered as the sole beneficial
      and legal owner of 50% of the issued share capital of
    Nordan.

            

    

     

    
      	
              9.3.5  

            	
              Nordan
      has an authorised share capital of 1,000 divided into 1,000 registered
      shares of $1 each, all of which shares have been issued fully paid, and
      the legal title and beneficial ownership of 50% of those shares is held,
      free of any Security Interest or other claim (other than the Nordan Senior
      Security Documents), by STL.

            

    

     

    
      	
              9.3.6  

            	
              STL
      is a 100% subsidiary, indirect of the Guarantor, (1) STL owns a 50% equity
      interest in Nordan (2) Nordan owns a 100% economic interest (via an option
      to purchase arrangement pursuant to the terms of a bareboat charter) in
      the vessel m.v. Seapowet and Nordan's option to purchase m.v.
      Seapowet is free of all liens and encumbrances other than as referred
      to in Clause 9.3.7 below;

            

    

     

    
      	
              9.3.7  

            	
              The
      principal amount of the financing provided under the Seapowet bareboat
      charter on which Nordan's purchase option is based does not exceed
      $8,000,000 and the amount secured by the first pledge of the Nordan shares
      held by STL in favour Nordea Bank Norge ASA (as lender under a certain USD
      8,000,000 term loan facility agreement dated 5 September 2006 (as amended)
      between Nordea Bank Norge ASA and Seapowet Trading Ltd.)  not
      exceed $2,500,000 plus interest and
costs;

            

    

     

    
      	
              9.3.8  

            	
              the
      total amount of outstanding advances and accrued interest under the Nordea
      Facility does not exceed
$63,000,000.

            

    

     

    
      	
              9.4  

            	
              Corporate
      power

            

    

     

    
      	
              9.4.1  

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

            

    

     

    
      	
              9.4.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              9.5  

            	
              Consents
      in force

            

    

     

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

     

    
      	
              9.6  

            	
              Legal
      validity; effective Security
Interests

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              9.7  

            	
              No
      third party Security Interests

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              9.8  

            	
              No
      conflicts

            

    

     

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

     

    
      	
              (a)  

            	
              any
      law or regulation; or

            

    

     

    
      	
              (b)  

            	
              the
      constitutional documents of that Borrower;
or

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              9.9  

            	
              No
      withholding taxes

            

    

     

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

     

    
      	
              9.10  

            	
              No
      default

            

    

     

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

     

    
      	
              9.11  

            	
              Information

            

    

     

    
      	
              9.11.1  

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

            

    

     

    
      	
              9.11.2  

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

            

    

     

    
      	
              9.11.3  

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

            

    

     

    
      	
              9.12  

            	
              No
      litigation

            

    

     

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

     

    
      	
              9.13  

            	
              Compliance
      with certain undertakings

            

    

     

    At the
date of this Agreement, the Borrowers are in compliance with the Nordea Facility
and with Clauses 0, 10.4, 10.9 and 10.13.

     

    
      	
              9.14  

            	
              Taxes
      paid

            

    

     

    
      	
              9.14.1  

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

            

    

     

    
      	
              9.14.2  

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

            

    

     

    
      	
              9.15  

            	
              ISM
      Code and ISPS Code compliance

            

    

     

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

     

    
      	
              9.16  

            	
              No
      filing or stamp taxes

            

    

     

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

     

    
      	
              9.17  

            	
              Own
      account

            

    

     

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

     

    
      	
              9.18  

            	
              Pari
      passu ranking

            

    

     

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

     

    
      	
              9.19  

            	
              No
      sovereign immunity

            

    

     

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

     

    
      	
              9.20  

            	
              Barge

            

    

     

    In the
good faith opinion of the Guarantor and the Borrowers, Straits Offshore Ltd.,
which has contracted to purchase the Barge, is presently entitled to cancel its
obligation to purchase the Barge without any requirement to pay any
compensation.

     

     

    
      	
              10  

            	
              General
      undertakings

            

    

     

    
      	
              10.1  

            	
              General

            

    

     

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

     

    
      	
              10.2  

            	
              Title;
      negative pledge

            

    

     

    
      	
              10.2.1  

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

            

    

     

    
      	
              10.2.2  

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

            

    

     

    
      	
              10.2.3  

            	
              The
      Guarantor shall not create or permit to arise any Security Interest
      (except for Permitted Security Interests) over its shares in OBO Holdings
      Ltd.

            

    

     

    
      	
              10.2.4  

            	
              OBO
      Holdings shall not create or permit to arise any Security Interest (except
      for Permitted Security Interests) over (i) any of its shares in the
      Ship Owning Borrowers or (ii) the Retention
  Account.

            

    

     

    
      	
              10.2.5  

            	
              The
      Guarantor shall procure that STL shall not create or permit to arise any
      Security Interest (except for Permitted Security Interests) over its
      shares in Nordan.

            

    

     

    
      	
              10.2.6  

            	
              The
      Guarantor shall procure that Straits Offshore Ltd. shall not create or
      permit to arise any Security Interest (except for Permitted Security
      Interests) over the property subject to the Safecom Assignment
      Agreement.

            

    

     

    
      	
              10.3  

            	
              No
      disposal of assets

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              10.4  

            	
              No
      other liabilities or obligations to be
incurred

            

    

     

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

     

    
      	
              10.5  

            	
              Information
      provided to be accurate

            

    

     

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

     

    
      	
              10.6  

            	
              Provision
      of financial statements and other
information

            

    

     

    The
Guarantor shall send or cause to be sent to the Lender:

     

    
      	
              (a)  

            	
              its
      audited accounts and its audited consolidated accounts as soon as possible
      but in no event later than 180 days after the end of each applicable
      financial year;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              10.7  

            	
              Form
      of financial statements

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              10.8  

            	
              Shareholder
      and creditor notices

            

    

     

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

     

    
      	
              10.9  

            	
              Consents

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

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

     

    
      	
              10.10  

            	
              Maintenance
      of Security Interests

            

    

     

    Each
Borrower shall:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              10.11  

            	
              Notification
      of litigation

            

    

     

    
      	
              10.11.1  

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

            

    

     

    
      	
              10.11.2  

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

            

    

     

    
      	
              10.12  

            	
              No
      amendment to Master Agreements

            

    

     

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

     

    
      	
              10.13  

            	
              Confirmation
      of no default

            

    

     

    
      	
              10.13.1  

            	
              The
      chief financial officer of the Guarantor shall, on a three-monthly basis
      commencing 31 March 2010, serve on the Lender a Compliance
      Certificate, which is signed by the chief financial officer of the
      Guarantor and which, as the case may
be:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              10.13.2  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              10.14  

            	
              Notification
      of default

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              10.15  

            	
              Provision
      of further information

            

    

     

    
      	
              10.15.1  

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

            

    

     

    
      	
              10.15.2  

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

            

    

     

    
      	
              10.16  

            	
              Due
      diligence

            

    

     

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

     

    
      	
              10.17  

            	
              Further
      Information

            

    

     

    The
Borrowers shall provide to the Lender promptly after the date of this Agreement
and in any event not later than 28 February 2010, confirmation in respect of
cash flow projections to the satisfaction of the Lender, including the full
amount of the Advance and of the deferred reductions in accordance with
paragraph (a)(i) and (ii) of clause 6.2 of the Nordea Facility (Repayment of Loans),
evidencing sufficient cash flow of the Borrowers and the Guarantor up until (and
including) the Final Repayment Date.

     

    
      	
              10.18  

            	
              New
      equity undertaking

            

    

     

    
      	
              10.18.1  

            	
              The
      Guarantor shall raise a minimum of $7,000,000, of which minimum $5,000,000
      shall be raised by 31 May 2010 and the balance amount up to $7,000,000 by
      30 September 2010 to improve its liquidity by any combination of one or
      more of the following:

            

    

     

    
      	
              (a)  

            	
              new
      equity (or other capital acceptable to the Lender);
  and

            

    

     

    
      	
              (b)  

            	
              sale
      of one or more of the Guarantor's assets, to generate sufficient free cash
      ensuring that their budgeted expenses (including, but not limited to,
      principal and interest payments towards its lenders) are covered until 31
      December 2011.

            

    

     

    
      	
              10.18.2  

            	
              Subject
      to the full reduction of the deferred scheduled reductions in clause
      6.2(a)(i) and (ii) of the Nordea Facility (Repayment of Loans),
      any capital raised in accordance with this Clause 10.18 shall not be included when calculating the
      Excess Cash to be mandatorily prepaid in accordance with Clause 7.2 (Mandatory reduction – Excess
      Cash).

            

    

     

    
      	
              10.19  

            	
              Information
      on Trade Debt

            

    

     

    
      	
              10.19.1  

            	
              The
      Borrowers and the Guarantor shall provide the Lender with evidence on a
      monthly basis no later than five (5) Business Days (or such longer period
      as may be agreed by the Lender) after the end of each calendar month, of
      the status of repayment of the Guarantor's trade debt (on a consolidated
      basis), starting on 7 January 2010 (for December
  2009).

            

    

     

    
      	
              10.19.2  

            	
              The
      Borrowers shall procure that such repayment of trade debt shall be in
      accordance with the payment schedule outlined in the report prepared by
      Mr. James Christodoulou and published on Intralinks on 25 November 2009
      (the Payment
      Report) and so that the third party trade debt as set out in the
      Payment Report shall be repaid on 30 September 2010 at the latest,
      bringing the total acceptable third party debt to a maximum of $3,500,000
      and not above a maximum of $3,500,000 at any point
    thereafter.

            

    

     

    
      	
              10.19.3  

            	
              The
      Guarantor's total third party outstanding trade debt (on a consolidated
      basis), shall at all times following 30 September 2010 be a maximum of
      $3,500,000.

            

    

     

    
      	
              10.19.4  

            	
              If
      the amount of Cash and Cash Equivalents of the Guarantor at the end of any
      month until 30 September 2010 exceeds $5,000,000, such excess amount
      (above $5,000,000) shall be used to repay the Guarantor's trade debt (on a
      consolidated basis) until the total third party debt is a maximum of
      $3,500,000. Any such repayment of trade debt as set out in this Clause 10.19.4 shall accelerate the repayment schedule
      as set out in the Payment Report by a corresponding
  amount.

            

    

     

    
      	
              10.19.5  

            	
              The
      Lender shall, at the cost of the Borrowers, appoint an adviser (which
      shall be the same advisor as appointed by the Agent under the Nordea
      Facility) to provide the Lender with confirmations with regard
      to:

            

    

     

    
      	
              (a)  

            	
              the
      Guarantor's trade debt balance (on a consolidated
  basis);

            

    

     

    
      	
              (b)  

            	
              the
      compliance with the provisions set out in Clauses 10.19.1, 10.19.2 and
      10.19.3 above;

            

    

     

    
      	
              (c)  

            	
              the
      Guarantor's commitments and Financial Indebtedness as set out in Clause
      11.3.4; and

            

    

     

    
      	
              (d)  

            	
              such
      other information as the Lender may require from time to
    time,

            

    

     

    on a
monthly basis.

     

    
      	
              10.20  

            	
              Restriction
      on prepayments of the Nordea
Facility

            

    

     

    The
Borrowers and the Guarantor shall procure that no prepayments or repayments
under the Nordea Facility are made other than:

     

    
      	
              (a)  

            	
              payments
      of Excess Cash as provided for in Clause 6.3
      of the Nordea Facility (Mandatory prepayment – Excess Cash) made
      concurrently with a prepayment of the Advance in accordance with
      Clause 7.2 of this Agreement;

            

    

     

    
      	
              (b)  

            	
              any
      prepayments required by Clause 7.1 of the Nordea Facilty;
    and

            

    

     

    
      	
              (c)  

            	
              any
      other prepayment of the Nordea Facility made concurrently with a
      prepayment of the Advance bearing the same proportion to the Advance as
      the prepayment of the Nordea Facility bears to the outstanding balance
      under the Nordea Facility.

            

    

     

    
      	
              10.21  

            	
              Information
      relating to chartering and financing of the
  Barge

            

    

     

    
      	
              10.21.1  

            	
              Subject
      to Clause 10.21.3, the Guarantor shall and the Borrowers shall procure
      that Straits Offshore Ltd. shall provide evidence satisfactory to the
      Lender of a satisfactory charter agreement and long term financing of the
      Barge, at the earlier of 30 September 2010 and (b) one (1) month prior to
      the delivery date of the Barge to Straits Offshore
  Ltd.

            

    

     

    
      	
              10.21.2  

            	
              Subject
      to Clause 10.21.3, the Guarantor and the Borrowers shall procure that the
      other companies in the Group (including the Guarantor (on a consolidated
      basis)) shall not incur any further costs, expenses or capital expenses
      related to the Barge in the period commencing on the date of this
      Agreement and ending on 30 June 2010, or, if later, the date of compliance
      with the provisions of Clause 10.18 (New equity
      undertaking).

            

    

     

    
      	
              10.21.3  

            	
              The
      obligations of the Borrower under this Clause 10.21 and any of obligations
      set out in this Agreement in respect of the Safecom Assignment Agreement
      and the Safecom Co-ordination Agreement shall cease to apply if the
      Borrowers deliver to the Lender evidence satisfactory to the Lender
      establishing that Straits Offshore Ltd. has cancelled its obligation to
      acquire the Barge and that no member of the Group has incurred any
      additional liability in respect of the obligation to acquire the Barge or
      its cancellation.

            

    

     

    
      	
              10.22  

            	
              Payments
      into retention account

            

    

     

    
      	
              10.22.1  

            	
              The
      Borrowers and the Guarantor shall procure that the provisions of
      clause 6.4 of the Nordea Facility are complied with within the time
      periods set out therein.

            

    

     

    
      	
              10.22.2  

            	
              OBO
      Holdings shall maintain the Retention Account with the Agent which shall
      be blocked and pledged on a second priority basis in favour of the Lender
      under the Retention Account Charge
Agreement.

            

    

     

    
      	
              10.22.3  

            	
              The
      Borrowers shall procure that on the last day of each calendar month an
      amount equal to 1/3 of the amount of interest falling due for payment
      under Clause 4 on the next following
      Repayment Date is transferred from the Earnings Accounts to the Retention
      Account.

            

    

     

    
      	
              10.22.4  

            	
              After
      any application required under clause 6.4 of the Nordea Facility, the
      accumulated amount in the Retention Account shall automatically be applied
      against the next following payment of interest due under Clause 4 on the relevant Repayment
  Date.

            

    

     

    
      	
              10.22.5  

            	
              Each
      of the Borrowers hereby irrevocably authorises the Lender to instruct the
      Agent to make any transfer required under this Clause 10.22.

            

    

     

    
      	
              10.23  

            	
              Cashflow Forecasts and Cashflow
      Reports

            

    

     

    
      	
              10.23.1  

            	
              Not
      later than 15 Business Days after the date of this Agreement, the
      Guarantor shall provide the Lender with a cashflow forecast (with
      assumptions as agreed with the Lender and in a form approved by the
      Lender) showing the unaudited consolidated cashflow forecast for the Group
      with respect to the period from 1 January 2010 to 31 December
      2017.

            

    

     

    
      	
              10.23.2  

            	
              Not
      later than 30 days after the end of each calendar month, the Guarantor
      shall provide the Lender with unaudited consolidated monthly management
      accounts and financial statements for the Group with respect to the
      previous calendar month.

            

    

     

    
      	
              10.24  

            	
              Guarantor's
      consent and confirmation

            

    

     

    The
Guarantor hereby:

     

    
      	
              (a)  

            	
              consents
      to the Existing Borrowers entering into this Agreements and the other
      Finance Documents;

            

    

     

    
      	
              (b)  

            	
              consents
      to this Agreement replacing and superseding the Existing Loan Agreement
      and consents to the Borrowers executing the Second Deed of Accession
      amending the Existing Master
Agreement;

            

    

     

    
      	
              (c)  

            	
              confirms
      and undertakes to the Lender that the Guarantee shall continue to be in
      full force and effect and shall be extended so as to secure the full
      payment and discharge of all of the Secured
  Liabilities;

            

    

     

    
      	
              (d)  

            	
              confirms
      and undertakes to the Lender that its obligations under the Guarantee
      shall not be prejudiced, restricted or diminished by reason of the
      execution of this Agreement or the Second Deed of Accession by the
      Existing Borrowers;

            

    

     

    
      	
              (e)  

            	
              agrees
      that the Guarantee shall be amended so that the expression "Finance
      Documents" when used in the Guarantee shall have the meaning given to that
      expression in this Agreement.

            

    

     

     

    
      	
              11  

            	
              Corporate
      undertakings

            

    

     

    
      	
              11.1  

            	
              General

            

    

     

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

     

    
      	
              11.2  

            	
              Maintenance
      of status

            

    

     

    Each
Borrower shall maintain its separate corporate existence and remain in good
standing under the laws of the Marshall Islands (in the case of OBO Holdings,
the Existing Borrowers and the Ship Owning Borrowers) or Liberia (in the case of
the Guarantor and Isabelle).

     

    
      	
              11.3  

            	
              Negative
      undertakings

            

    

     

    
      	
              11.3.1  

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

            

    

     

    
      	
              11.3.2  

            	
              Boss
      Tankers Ltd shall not, without the consent of the Lender, carry on any
      business other than the ownership of the shares in the Existing
      Borrowers.

            

    

     

    
      	
              11.3.3  

            	
              OBO
      Holdings shall not, without the consent of the Lender, carry on any
      business other than the ownership of the shares in Ship Owning Borrowers
      and ownership of the Retention
Account.

            

    

     

    
      	
              11.3.4  

            	
              With
      effect from the date of the Agreement and subject to Clause 11.3.2, each
      of the Existing Borrowers shall not carry on any business other than
      receiving debts outstanding or monies due to it and ancillary to the
      business of operating the vessel previously operated by it and shall not
      shall incur any liability or obligation except liabilities or obligations
      pursuant to this Agreement or any Finance
  Document.

            

    

     

    
      	
              11.3.5  

            	
              None
      of the Borrowers shall enter into any new Financial Indebtedness or assume
      or grant any guarantee liabilities, other than current liabilities related
      to the day to day operation of the
Vessels.

            

    

     

    
      	
              11.3.6  

            	
              No
      Borrower shall:

            

    

     

    
      	
              (a)  

            	
              alter
      its financial year;

            

    

     

    
      	
              (b)  

            	
              subject
      to Clause 11.3.7, pay any dividend or make
      any other form of distribution or effect any form of redemption, purchase
      or return of share capital or repay any loans to its shareholders;
      or

            

    

     

    
      	
              (c)  

            	
              provide
      any form of credit or financial assistance
to:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

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

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              11.3.7  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

     

    
      	
              12  

            	
              Insurance

            

    

     

    
      	
              12.1  

            	
              General

            

    

     

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

     

    
      	
              12.2  

            	
              Maintenance
      of obligatory insurances

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              war
      risks;

            

    

     

    
      	
              (c)  

            	
              protection
      and indemnity risks; and

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              12.3  

            	
              Terms
      of obligatory insurances

            

    

     

    
      	
              12.3.1  

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

            

    

     

    
      	
              (a)  

            	
              in
      Dollars;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              on
      approved terms; and

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              12.3.2  

            	
              The
      Ship Owning Borrowers shall ensure that in the case of fire and usual
      marine risks and war risks insurance relating to all Ships, the aggregate
      insured value is at all times at least 120% of the aggregate of
      (i) the Advance, (ii) the Swap Exposure and (iii) the
      outstanding amount under the Nordea Facility, in each case as at the
      commencement of each policy year.

            

    

     

    
      	
              12.4  

            	
              Further
      protections for the Lender

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              12.5  

            	
              Renewal
      of obligatory insurances

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              12.6  

            	
              Copies
      of policies; letters of undertaking

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              12.7  

            	
              Copies
      of certificates of entry

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              12.8  

            	
              Deposit
      of original policies

            

    

     

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

     

    
      	
              12.9  

            	
              Payment
      of premiums

            

    

     

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

     

    
      	
              12.10  

            	
              Guarantees

            

    

     

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

     

    
      	
              12.11  

            	
              Compliance
      with terms of insurances

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              12.12  

            	
              Alteration
      to terms of insurances

            

    

     

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

     

    
      	
              12.13  

            	
              Settlement
      of claims

            

    

     

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

     

    
      	
              12.14  

            	
              Provision
      of copies of communications

            

    

     

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

     

    
      	
              (a)  

            	
              the
      approved brokers; and

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              12.15  

            	
              Provision
      of information

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              12.16  

            	
              Mortgagee's
      interest, additional perils 

            

    

     

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

     

     

    
      	
              13  

            	
              Ship
      covenants

            

    

     

    
      	
              13.1  

            	
              General

            

    

     

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

     

    
      	
              13.2  

            	
              Ship's
      name and registration

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              13.3  

            	
              Repair
      and classification

            

    

     

    
      	
              13.3.1  

            	
              The
      Borrowers shall ensure that no Ship Owning Borrower shall change the
      classification society of any of the
Ships.

            

    

     

    
      	
              13.3.2  

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

            

    

     

    
      	
              (a)  

            	
              consistent
      with first-class ship ownership and management
  practice;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              13.4  

            	
              Modification

            

    

     

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

     

    
      	
              13.5  

            	
              Removal
      of parts

            

    

     

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

     

    
      	
              13.6  

            	
              Surveys

            

    

     

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

     

    
      	
              13.7  

            	
              Inspection

            

    

     

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

     

    
      	
              13.8  

            	
              Prevention
      of and release from arrest

            

    

     

    Each Ship
Owning Borrower shall promptly discharge:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              all
      other outgoings whatsoever in respect of the Ship owned by it, the
      Earnings or the Insurances;

            

    

     

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

     

    
      	
              13.9  

            	
              Compliance
      with laws etc.

            

    

     

    Each Ship
Owning Borrower shall:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              13.10  

            	
              Provision
      of information

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              any
      towages and salvages;

            

    

     

    
      	
              (e)  

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

            

    

     

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

     

    
      	
              13.11  

            	
              Notification
      of certain events

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              any
      intended dry docking of the Ship owned by
it;

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

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

     

    
      	
              13.12  

            	
              Restrictions
      on chartering, appointment of managers etc.; undertaking to replace or
      extend charterparties

            

    

     

    
      	
              13.12.1  

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

            

    

     

    
      	
              (a)  

            	
              let
      that Ship on bareboat charter for any
period;

            

    

     

    
      	
              (b)  

            	
              enter
      into any agreement related to the chartering and operation of that Ship,
      including any  time or consecutive voyage charter, for a term
      which exceeds, or which by virtue of any optional extensions may exceed,
      12 months;

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

            	
              de-activate
      or lay up that Ship.

            

    

     

    
      	
              13.12.2  

            	
              The
      Borrowers shall within 31 December 2010 or by 31 January 2011 at the
      latest facilitate new charterparties for the Ships or extension of the
      existing Charterparties (which expire during 2011) by nine (9) months on
      average, in any event at average rates for all Ships sufficient to
      cover the Borrowers’ budgeted expenses (including, but not limited to,
      principal and interest payments to their lenders) until 31 December
      2011.

            

    

     

    
      	
              13.13  

            	
              Notice
      of Mortgage

            

    

     

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

     

    
      	
              13.14  

            	
              Sharing
      of Earnings

            

    

     

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

     

     

    
      	
              14  

            	
              Financial
      covenants

            

    

     

    
      	
              14.1  

            	
              Definitions

            

    

     

     For the
purposes of the financial covenants set out herein, the following definitions
shall apply:

     

     Cash and Cash Equivalents
means, in respect of the Group, and at any time:

     

    
      	
              (a)  

            	
              cash
      in hand or on deposits with any acceptable bank available for cash
      management purposes;

            

    

     

    
      	
              (b)  

            	
              investment
      grade certificates of deposit or investment grade marketable debt
      securities, maturing within one (1) year  after the relevant
      date of calculation; or

            

    

     

    
      	
              (c)  

            	
              any
      other instrument, security or investment approved by the Lender, in each
      case, to which any member of the Group beneficially entitled at that time
      and which is capable of being applied against the Total
    Debt,

            

    

     

    Equity means Total Assets less
Total Debt;

     

    Equity Ratio means Equity
divided by Total Assets;

     

     Quarter Date means each 31
March, 30 June, 30 September and 31 December.

     

     Total Assets means, on a
consolidated basis, the aggregate book value of all of the assets of the
Guarantor (on a consolidated basis), however excluding Cash and Cash Equivalents
in excess of the minimum Cash and Cash Equivalents requirements in Clause 14.2.4 (Cash and Cash
Equivalents).

     

     Total Debt means, on a
consolidated basis, the aggregate book value of all provisions, other long term
liabilities and current liabilities of the Borrowers and the Guarantor (on a
consolidated basis) however reduced by Cash and Cash Equivalents in excess of
the minimum Cash and Cash Equivalents requirements in Clause 14.2.4 (Cash and Cash
Equivalents).

     

     Value Adjusted Equity means
Value Adjusted Total Assets less Total Debt.

     

     Value Adjusted Total Assets
means, on a consolidated basis, the total market value of all of the assets of
the Guarantor (on a consolidated basis), however excluding Cash and Cash
Equivalents in excess of the minimum Cash and Cash Equivalents requirements in
Clause 14.2.4 (Cash and Cash
Equivalents).

     

    
      	
              14.2  

            	
              Financial
      covenants

            

    

     

    
      	
              14.2.1  

            	
              Minimum
      Value Adjusted Equity

            

    

     

     The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain a minimum Value Adjusted Equity of $30,000,000.

     

    
      	
              14.2.2  

            	
              Positive
      working capital

            

    

     

     The
Guarantor (on a consolidated basis) shall at all times following the delivery of
the Compliance Certificate for the period ending on 30 June 2010, ensure that
its current assets exceed its current liabilities (excluding the current portion
of long term debt), all as determined in accordance with GAAP.

     

    
      	
              14.2.3  

            	
              Minimum
      value

            

    

     

     The
Borrowers shall ensure that the Market Value of the Ships be at least the higher
of:

     

    
      	
              (a)  

            	
              one
      hundred and thirty-five per cent (135%) of the amount outstanding under
      the Nordea Facility at any time;
and

            

    

     

    
      	
              (b)  

            	
              one
      hundred and twenty per cent (120%) of the aggregate of (i) the amount
      outstanding under the Nordea Facility and (ii) the
  Advance;

            

    

     

    
      	
              14.2.4  

            	
              Cash
      and Cash Equivalents

            

    

     

     The
Guarantor (on a consolidated basis) shall at all times in the period from the
Effective Date and ending on the earlier of (i) 30 September 2010 and
(ii) the delivery of the Barge to Straits Offshore Ltd., ensure that it has
Cash and Cash Equivalents equal to or greater than $4,000,000 and at all times
thereafter ensure that the Guarantor (on a consolidated basis) has Cash and Cash
Equivalents equal to or greater than $6,000,000.

     

    
      	
              14.2.5  

            	
              Minimum
      Equity Ratio

            

    

     

     The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain an Equity Ratio of minimum twenty-five per cent
(25.00%).

     

     

    
      	
              15  

            	
              Security
      cover

            

    

     

    
      	
              15.1  

            	
              Minimum
      required security cover

            

    

     

    Clause 15.2 applies if the Lender notifies the Borrowers
that:

     

    
      	
              (a)  

            	
              the
      aggregate of the Market Values of the Ships;
  plus

            

    

     

    
      	
              (b)  

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

            

    

     

    is below,
either:

     

    
      	
              (i)  

            	
              one
      hundred and thirty-five per cent (135%) of the amount outstanding under
      the Nordea Facility at any time;
and

            

    

     

    
      	
              (ii)  

            	
              one
      hundred and twenty per cent (120%) of the aggregate of (i) the amount
      outstanding under the Nordea Facility and (ii) the
  Advance.

            

    

     

    
      	
              15.2  

            	
              Provision
      of additional security; prepayment

            

    

     

    If the
Lender serves a notice on the Borrowers under Clause 15.1, the Borrowers shall, within 1 month after the
date on which the Lender's notice is served, either:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              pay
      to the Lender such amount so as to ensure once such sum has been applied
      in accordance  with Clause 15.1, such shortfall will have been
      eliminated.

            

    

     

    
      	
              15.3  

            	
              Value
      of additional vessel security

            

    

     

    The net
realisable value of any additional security which is provided under
Clause 15.2 and which consists of a Security
Interest over a vessel shall be determined in accordance with its Market
Value.

     

    
      	
              15.4  

            	
              Valuations
      binding

            

    

     

    Any
valuation under Clause 2 (b), 15.2 or 15.3 shall be binding and conclusive as regards the
Borrowers, as shall be any valuation which the Lender makes of any additional
security which does not consist of or include a Security Interest.

     

    
      	
              15.5  

            	
              Provision
      of information

            

    

     

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

     

    
      	
              15.6  

            	
              Payment
      of valuation expenses

            

    

     

    Without
prejudice to the generality of the Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers shall, on demand, pay the Lender
the amount of the fees and expenses of any shipbroker or expert instructed by
the Lender under this Clause and all legal and other expenses incurred by the
Lender in connection with any matter arising out of this Clause. Provided no
Event of Default or Potential Event of Default has occurred and is continuing,
the Borrower shall only be required to pay such fees and expenses for one
valuation per Ship in each calendar year.

     

     

    
      	
              16  

            	
              Payments
      and calculations

            

    

     

    
      	
              16.1  

            	
              Currency
      and method of payments

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              16.2  

            	
              Payment
      on non-Business Day

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              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  

            	
              Lender
      accounts

            

    

     

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

     

    
      	
              16.5  

            	
              Accounts
      prima facie evidence

            

    

     

    If the
account maintained under Clause 16.4 shows an amount to be owing by a
Borrower or a Security Party to the Lender, that account shall be prima facie
evidence that that amount is owing to the Lender.

     

    
      	
              16.6  

            	
              Source
      of funds

            

    

     

    
      	
              16.6.1  

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

            

    

     

    
      	
              16.6.2  

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

            

    

     

     

    
      	
              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 the Lender under or by virtue of any Finance Document after service
of notice on the Borrowers under Clause 19.2(a) or (b) shall be
applied:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              17.2  

            	
              Variation
      of order of application

            

    

     

    The
Lender may, by notice to the Borrowers and the Security Parties, provide for a
different manner of application from that set out in Clause 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
Lender 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.

     

    
      	
              17.4  

            	
              Appropriation
      rights overridden

            

    

     

    This
Clause and any notice which the Lender gives under Clause 17.2 shall
override any right of appropriation possessed, and any purported appropriation
made, by any Borrower or any Security Party.

     

     

    
      	
              18  

            	
              Application
      of Earnings

            

    

     

    
      	
              18.1  

            	
              Payment
      of Earnings

            

    

     

    Each Ship
Owning Borrower undertakes with the Lender to ensure that, throughout the
Security Period (and subject only to the provisions of the Assignment Agreement)
all the Earnings of the Ship owned by it are paid into the Earnings Account for
that Ship all payments by the Swap Bank to a Borrower under each Designated
Transaction are paid into the Earnings Account held in the name of that
Borrower.

     

    
      	
              18.2  

            	
              Location
      of accounts

            

    

     

    Boss
Tankers shall promptly:

     

    
      	
              (a)  

            	
              comply
      with any requirement of the Lender as to the location or re-location of
      the Boss Tankers Account ; and

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              18.3  

            	
              Debits
      for expenses etc.

            

    

     

    The
Lender shall be entitled (but not obliged) from time to time to debit any
Earnings Account without prior notice in order to discharge any amount due and
payable to it under Clause 20 or 21 or payment of which it has become
entitled to demand under Clause 20 or 21.

     

     

    
      	
              19  

            	
              Events
      of Default

            

    

     

    
      	
              19.1  

            	
              Events
      of Default

            

    

     

    An Event
of Default occurs if:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              any
      breach occurs of Clause 8.2, 0, 10.3, 11.2, 11.3, 12, 14, or 15.1;
      or

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              any
      Financial Indebtedness of any Borrower or the Guarantor becomes due and
      payable or capable of being declared due and payable prior to its stated
      maturity date as a consequence of any event of default or an Event of
      Default (as defined in the Nordea Facility) occurs;
  or

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

    
      	
              (v)  

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

            

    

     

    
      	
              (g)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

    
      	
              (h)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (j)  

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

            

    

     

    
      	
              (k)  

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

            

    

     

    
      	
              (l)  

            	
              it
      becomes unlawful in any Pertinent Jurisdiction or
    impossible:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (m)  

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

            

    

     

    
      	
              (n)  

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

            

    

     

    
      	
              (o)  

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

            

    

     

    
      	
              (p)  

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

            

    

     

    
      	
              (q)  

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

            

    

     

    
      	
              (r)  

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

            

    

     

    
      	
              (s)  

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

            

    

     

    
      	
              (t)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

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

     

    
      	
              19.2  

            	
              Actions
      following an Event of Default

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              19.3  

            	
              Termination
      of Commitment

            

    

     

    On the
service of a notice under Clause 19.2(a) the
Commitment, and all other obligations of the Lender to the Borrowers under this
Agreement, shall terminate.

     

    
      	
              19.4  

            	
              Acceleration
      of the Advances

            

    

     

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

     

    
      	
              19.5  

            	
              Multiple
      notices; action without notice

            

    

     

    The
Lender may serve notices under Clauses 19.2(a)
and (b) simultaneously or on different dates and it
may take any action referred to in Clause 19.2
if no such notice is served or simultaneously with or at any time after the
service of both or either of such notices.

     

    
      	
              19.6  

            	
              Exclusion
      of Lender/Swap Bank liability

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              19.7  

            	
              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.

     

     

    
      	
              20  

            	
              Fees
      and expenses

            

    

     

    
      	
              20.1  

            	
              Arrangement
      fee

            

    

     

    The
Borrowers shall pay to the Lender on or before the date of this Agreement, an
arrangement fee of $75,000.

     

    
      	
              20.2  

            	
              Costs
      of negotiation, preparation etc.

            

    

     

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

     

    
      	
              20.3  

            	
              Costs
      of variations, amendments, enforcement
etc.

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              any
      consent or waiver by the Lender or the Swap Bank 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 or any
      other matter relating to such security;
or

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

    
      	
              20.4  

            	
              Certification
      of amounts

            

    

     

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

     

     

    
      	
              21  

            	
              Indemnities

            

    

     

    
      	
              21.1  

            	
              Indemnities
      regarding borrowing and repayment of the
Advance

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              21.2  

            	
              Breakage
      costs

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              21.3  

            	
              Miscellaneous
      indemnities

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              any
      other Pertinent Matter;

            

    

     

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

     

    Without
prejudice to its generality, this Clause 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, ISPS Code or any Environmental Law.

     

    
      	
              21.4  

            	
              Currency
      indemnity

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              enforcing
      any such order or judgment;

            

    

     

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

     

    In this
Clause 21.4, the available rate of exchange
means the rate at which the Lender is able at the opening of business (London
time) on the Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.

     

    This
Clause 21.4 creates a separate liability of
the Borrowers which is distinct from their other liabilities under the Finance
Documents and which shall not be merged in any judgment or order relating to
those other liabilities.

     

    
      	
              21.5  

            	
              Application
      to Master Agreements

            

    

     

    For the
avoidance of doubt, Clause 21.4 does not apply in
respect of sums due from the Borrowers to the Swap Bank under or in connection
with a Master Agreement as to which sums the provisions of section 8 (contractual currency) of that
Master Agreement shall apply.

     

    
      	
              21.6  

            	
              Certification
      of amounts

            

    

     

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

     

     

    
      	
              22  

            	
              No
      set-off or Tax Deduction; value added
tax

            

    

     

    
      	
              22.1  

            	
              Definitions

            

    

     

    In this
Clause:

     

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

     

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

     

    Tax Payment means either an
increase in a payment made by a Borrower to the Lender under Clause 22.3 or a payment under Clause 22.4.

     

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

     

    
      	
              22.2  

            	
              No
      set-off and counterclaim

            

    

     

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

     

    
      	
              22.3  

            	
              Tax
      gross-up

            

    

     

    
      	
              22.3.1  

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

            

    

     

    
      	
              22.3.2  

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

            

    

     

    
      	
              22.3.3  

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

            

    

     

    
      	
              22.3.4  

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

            

    

     

    
      	
              22.4  

            	
              Tax
      indemnity

            

    

     

    
      	
              22.4.1  

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

            

    

     

    
      	
              22.4.2  

            	
              Sub-clause 22.4.1 shall not
  apply:

            

    

     

    
      	
              (a)  

            	
              in
      relation to any tax assessed on the
Lender:

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

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

     

    
      	
              (b)  

            	
              to
      the extent that the liability or requirement is compensated for by an
      increased payment under Clause 22.3.

            

    

     

    
      	
              22.5  

            	
              Tax
      Credit

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              that
      Tax Payment;

            

    

     

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

     

    
      	
              22.6  

            	
              Stamp
      taxes

            

    

     

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

     

    
      	
              22.7  

            	
              Value
      added tax

            

    

     

    
      	
              22.7.1  

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

            

    

     

    
      	
              22.7.2  

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

            

    

     

     

    
      	
              23  

            	
              Illegality,
      etc.

            

    

     

    
      	
              23.1  

            	
              Illegality

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

            	
              contrary
      to, or inconsistent with, any
regulation,

            

    

     

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

     

    
      	
              23.2  

            	
              Notification
      and effect of illegality

            

    

     

    On the
Lender notifying the Borrowers under Clause 23.1, the Commitment shall
terminate; and thereupon or, if later, on the date specified in the Lender's
notice under Clause 23.1 as the date on which the notified event would
become effective the Borrowers shall prepay the Advances in full in accordance
with Clause 7.

     

    
      	
              23.3  

            	
              Mitigation

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

     

    
      	
              24  

            	
              Increased
      costs

            

    

     

    
      	
              24.1  

            	
              Definitions

            

    

     

    In this
Clause the following definitions apply.

     

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

     

    
      	
              (a)  

            	
              any
      law, regulation, practice or concession;
or

            

    

     

    
      	
              (b)  

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

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    Tax Liability means, in
respect of any person:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

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

     

    
      	
              24.2  

            	
              Increased
      Costs

            

    

     

    
      	
              24.2.1  

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

            

    

     

    
      	
              24.2.2  

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

            

    

     

    
      	
              24.2.3  

            	
              The
      Borrowers shall not be obliged to make a payment in respect of an
      Increased Cost under this Clause if and to the extent that the
      Increased Cost has been compensated for by the payment of the Mandatory
      Cost or the operation of Clause 22.3.

            

    

     

    
      	
              24.3  

            	
              Optional
      prepayment

            

    

     

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

     

     

    
      	
              25  

            	
              Set-off

            

    

     

    
      	
              25.1  

            	
              Set-off
      of matured or contingent
liabilities

            

    

     

    
      	
              25.1.1  

            	
              In
      consideration of the Lender making or continuing to make banking
      facilities available to the Borrowers, each of the Borrowers hereby
      authorises the Lender (without prior notice) to
  apply:

            

    

     

    
      	
              (a)  

            	
              any
      credit balance (whether or not then due) in any currency which is at any
      time held by the Lender at any office of the Lender in any country for the
      account of that Borrower on any account whatsoever;
  and

            

    

     

    
      	
              (b)  

            	
              any
      other amount owed by the Lender to that Borrower on any account whatsoever
      (whether in connection with any Finance Document or
    otherwise)

            

    

     

    in or
towards satisfaction of all or any of the monies, obligations and liabilities
which may now or at any time in the future be due owing or incurred by that
Borrower to the Lender whether actual or contingent and whether alone severally
or jointly as principal, guarantor, surety or otherwise and until all contingent
liabilities shall have been fully discharged and satisfied. The Lender may
retain such monies under as the Lender in its absolute discretion may consider
necessary to meet such obligations or liabilities.

     

    
      	
              25.1.2  

            	
              If
      the obligations to be set-off against each other under Clause 25.1.1 are
      in different currencies, the Lender may convert either obligation at a
      market rate of exchange in its usual course of business for the purpose of
      the set-off.

            

    

     

    
      	
              25.2  

            	
              Existing
      rights unaffected

            

    

     

    The
Lender shall not be obliged to exercise any of its rights under
Clause 25.1.1 and those rights shall be without prejudice and in addition
to any right of set-off, combination of accounts, charge, lien or other right or
remedy to which the Lender is entitled (whether under the general law or any
document).

     

    
      	
              25.3  

            	
              No
      Security Interest

            

    

     

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

     

     

    
      	
              26  

            	
              Transfers
      and changes in lending office

            

    

     

    
      	
              26.1  

            	
              Transfer
      by Borrowers

            

    

     

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

     

    
      	
              26.2  

            	
              Assignment
      by Lender

            

    

     

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

     

    
      	
              26.3  

            	
              Rights
      of assignee

            

    

     

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

     

    
      	
              26.4  

            	
              Sub-participation;
      subrogation assignment

            

    

     

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

     

    
      	
              26.5  

            	
              Disclosure
      of information

            

    

     

    The
Lender may disclose to any Permitted Disclosee any information which the Lender
has received in relation to any Borrower, any Security Party or their affairs
under or in connection with any Finance Document.

     

    For these
purposes each of the following is a Permitted Disclosee:

     

    
      	
              (i)  

            	
              any
      potential transferee, assignee or sub-participant of the Lender's rights
      and interests under the Finance Documents and their affiliates and
      professional advisers

            

    

     

    
      	
              (ii)  

            	
              rating
      agencies and their professional
advisers;

            

    

     

    
      	
              (iii)  

            	
              any
      party (and the professional advisers of any party) with (or through) whom
      the Lender enters into (or may potentially enter into), whether directly
      or indirectly, any transaction under which payments are to be made or may
      be made by reference to any of the Finance
  Documents;

            

    

     

    
      	
              (iv)  

            	
              any
      party (and the professional advisers of any party) who invests in or other
      finances a transaction where the Lender has assigned or transferred all or
      any of its rights and interests under the Finance
    Documents;

            

    

     

    
      	
              (v)  

            	
              any
      party (and the professional advisers of any party) to whom or for whose
      benefit the Lender charges, assigns or otherwise creates security over its
      rights and interest under the Finance
Documents;

            

    

     

    
      	
              (vi)  

            	
              the
      Lender's affiliates and professional
advisers;

            

    

     

    
      	
              (vii)  

            	
              administrative,
      settlement or numbering service providers,
and

            

    

     

    
      	
              (viii)  

            	
              persons
      required for legal or regulatory
purposes.

            

    

     

    
      	
              26.6  

            	
              Change
      of lending office

            

    

     

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

     

    
      	
              (a)  

            	
              the
      date on which the Borrowers receive the notice;
  and

            

    

     

    
      	
              (b)  

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

            

    

     

     

    
      	
              27  

            	
              Variations
      and waivers

            

    

     

    
      	
              27.1  

            	
              Variations,
      waivers etc. by Lender

            

    

     

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

     

    
      	
              27.2  

            	
              Exclusion
      of other or implied variations

            

    

     

    Except
for a document which satisfies the requirements of Clause 27.1, no
document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) being taken to
have varied, waived, suspended or limited, or being precluded (permanently or
temporarily) from enforcing, relying on or exercising:

     

    
      	
              (a)  

            	
              a
      provision of this Agreement or another Finance Document;
  or

            

    

     

    
      	
              (b)  

            	
              an
      Event of Default; or

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

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

     

     

    
      	
              28  

            	
              Notices

            

    

     

    
      	
              28.1  

            	
              Method
      and delivery

            

    

     

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

     

    
      	
              (a)  

            	
              in
      writing in English;

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              delivered
      by hand, or sent by prepaid first class post (or international courier in
      the case of an address outside the United Kingdom) to the address set out
      in Clause 28.2, or sent by fax to the
      number set out in Clause 28.2;

            

    

     

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

     

    
      	
              28.2  

            	
              Addresses

            

    

     

    The
addresses and numbers of the parties for the purposes of Clause 28.1 are:

     

    
      	
              (a)  

            	
              the
      Borrowers

            

    

     

    Par La
Ville Place

    14 Par La
Ville Road

    Hamilton
HM08

    Bermuda

    Attention:                      Mrs.
Deborah Davis

    Fax
number:                                 441-295-6796

    

    

    
      	
              (b)  

            	
              the
      Lender

            

    

     

    The
Governor and Company of the Bank of Scotland

     

    New
Uberior House

    11 Earl
Grey Street

    Edinburgh  EH3
0BN

     

    Attention:                      Marine
Finance

    Fax
number:                                 +44
131 658 3220

    

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

     

    
      	
              (a)  

            	
              any
      effective date specified in that notice;
or

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              28.3  

            	
              Receipt

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (aa)  

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

            

    

     

    
      	
              (bb)  

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

            

    

     

    
      	
              28.4  

            	
              Electronic
      communication

            

    

     

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

     

    
      	
              28.5  

            	
              Service
      Documents

            

    

     

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

     

    
      	
              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.

            

    

     

     

    
      	
              29  

            	
              Joint
      and several liability

            

    

     

    
      	
              29.1  

            	
              General

            

    

     

    All
liabilities and obligations of the Borrowers under this Agreement shall, whether
expressed to be so or not, be several and, if and to the extent consistent with
Clause 29.2, joint.

     

    
      	
              29.2  

            	
              No
      impairment of Borrower's
obligations

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

            	
              any
      combination of the foregoing.

            

    

     

    
      	
              29.3  

            	
              Principal
      debtors

            

    

     

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

     

    
      	
              29.4  

            	
              Subordination

            

    

     

    Subject
to Clause 29.5, during the Security Period, no Borrower shall:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              exercise
      or assert any combination of the
foregoing.

            

    

     

    
      	
              29.5  

            	
              Borrower's
      required action

            

    

     

    If during
the Security Period, the Lender, by notice to a Borrower, requires it to take
any action referred to in paragraphs (a) to (d) of Clause 29.4, in
relation to any other Borrower, that Borrower shall take that action as soon as
practicable after receiving the Lender's notice.

     

     

    
      	
              30  

            	
              Relationship
      between the Lender and the Swap
Bank

            

    

     

    Each
Borrower acknowledges that:

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

     

    
      	
              31  

            	
              Supplemental

            

    

     

    
      	
              31.1  

            	
              Rights
      cumulative, non-exclusive

            

    

     

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

     

    
      	
              (a)  

            	
              cumulative;

            

    

     

    
      	
              (b)  

            	
              may
      be exercised as often as appears expedient;
and

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              31.2  

            	
              Invalidity

            

    

     

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

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              31.3  

            	
              Counterparts

            

    

     

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

     

    
      	
              31.4  

            	
              Third
      party rights

            

    

     

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

     

    
      	
              31.5  

            	
              Entire
      Agreement

            

    

     

    The
parties agree that this Agreement replaces and supersedes the Existing Loan
Agreement and together with the Finance Documents, sets out the entire agreement
between the parties in relation to the subject matter of the Existing Loan
Agreement.

     

    

     

     

    
      	
              32  

            	
              Governing
      law 

            

    

     

    This
Agreement, and any non-contractual obligations arising out of or in connection
with it, shall be governed by and construed in accordance with English
law.

     

     

    
      	
              33  

            	
              Jurisdiction

            

    

     

    
      	
              33.1  

            	
              Jurisdiction
      of the English courts

            

    

     

    The
parties irrevocably agree, for the benefit of the Lender, and subject to
Clause 33.2, that the English courts shall have
exclusive jurisdiction to settle any dispute, including any dispute relating to
a non-contractual obligation, arising out of or in connection with this
Agreement.

     

    
      	
              33.2  

            	
              Proceedings
      in other jurisdictions

            

    

     

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

     

    
      	
              33.3  

            	
              Waiver
      of objections

            

    

     

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

     

     

    
      	
              34  

            	
              Service
      of process

            

    

     

    
      	
              34.1  

            	
              Address
      for service

            

    

     

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

     

    
      	
              34.2  

            	
              Agreed
      method of service

            

    

     

    Any
Service Document may be served on a Borrower by posting it by pre-paid first
class recorded delivery post to the address for service specified in this
Clause, or to such other address for service within England as may be notified
in accordance with Clause 28 to the
Lender.

     

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

     

    

      

    

      
      1 BoS to
provide swap confirmations

    

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule 1  -
Drawdown Notice

     

    
      	
              To:

            	
              Bank
      of Scotland plc (the Lender)

            

    

     

    
      	
               
      

            	
              Attention:
      Marine Finance

            

    

     

    Fax:           0131
658 3220

     

     

    Drawdown
Notice

     

    
      	
              1  

            	
              We
      refer to the loan agreement (the Loan Agreement) dated January 2010 and
      made between ourselves, as Borrowers, and yourselves, as Lender, in
      connection with a facility of up to $3,975,230.  Terms defined
      in the Loan Agreement have their defined meanings when used in this
      Drawdown Notice.

            

    

     

    
      	
              2  

            	
              We
      request to borrow as follows:

            

    

     

    
      	
              (a)  

            	
              Amount:The
      lower of (i) the Commitment and (ii) the amount notified to us by the
      Lender as being the sum of all outstanding advances under the Existing
      Loan Agreement together with accrued interest and breakage costs as at the
      Effective Date (the Total
      Accrued Debt);

            

    

     

    
      	
              (b)  

            	
              Drawdown
      Date:  **                    ;
      and

            

    

     

    
      	
              (c)  

            	
              the
      first Interest Period applicable to the Advance shall be
      **                     months
      commencing on the Effective Date.

            

    

     

    
      	
              3  

            	
              We
      represent and warrant that:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              4  

            	
              We
      acknowledge and agree that:

            

    

     

    
      	
              (a)  

            	
              the
      Total Accrued Debt:

            

    

     

    
      	
              (i)  

            	
              at
      the date of this notice is
      $**                    ;
      and

            

    

     

    
      	
              (ii)  

            	
              as
      of the Drawdown Date will be
      $**                    ;

            

    

     

    
      	
              (b)  

            	
              during
      the period from 19 November 2009 to the date of the notice, the interest
      periods applicable to the Existing Loan have been periods of less than one
      month as particularly specified in correspondence between the Lender and
      the Guarantor; and

            

    

     

    
      	
              (c)  

            	
              as
      of the Effective Date, the interest period applicable to the Existing Loan
      will terminate and in accordance with Clause 21.2 of the Existing Loan
      Agreement we shall be liable for all breakage costs associated with such
      termination on that date, which costs shall form part of the Total Accrued
      Debt.

            

    

     

    
      	
              5  

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

            

    

     

    [Name of
Signatory]

     

    

     

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

    Director

    for and
on behalf of

    [                              ]

     

    *delete
as appropriate

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule 2  -
Condition precedent documents

     

    Part
A

     

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

     

    
      	
              1  

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

            

    

     

    
      	
              2  

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

            

    

     

    
      	
              3  

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

            

    

     

    
      	
              4  

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

            

    

     

    
      	
              5  

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

            

    

     

    
      	
              6  

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

            

    

     

    
      	
              7  

            	
              Documentary
      evidence that the agent for service of process named in Clause 34 has accepted its
  appointment.

            

    

     

    
      	
              8  

            	
              Written
      confirmation from the Borrowers and the Guarantor acknowledging and
      agreeing to the amount of the Total Accrued Debt (as defined in the
      Drawdown Notice) as set out in the Effective Date
  Notice.

            

    

     

    
      	
              9  

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

            

    

     

    
      	
              10  

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

            

    

     

    
      	
              11  

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

            

    

     

    
      	
              12  

            	
              The
      Lender being satisfied that:

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

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

            

    

     

    
      	
              (f)  

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

            

    

     

    

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Part
B

     

    The
following are the documents referred to in Clause 8.1(b) and apply in relation to each of the Ship
Owning Borrowers and the Ship respectively owned by them:

     

    
      	
              1  

            	
              A
      duly executed original of the:

            

    

     

    
      	
              (a)  

            	
              Mortgage;

            

    

     

    
      	
              (b)  

            	
              Assignment
      Agreement;

            

    

     

    
      	
              (c)  

            	
              Deed
      of Covenant;

            

    

     

    
      	
              (d)  

            	
              Accounts
      Charge,

            

    

     

    
      	
              (e)  

            	
              Charterparty
      Assignment

            

    

     

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

     

    
      	
              2  

            	
              Documentary
      evidence that:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

            	
              the
      Ship maintains the following class free of all overdue recommendations and
      conditions of such Classification
Society:

            

    

     

    
      	
              (i)  

            	
              in
      respect of m.v. "Bonnie Smithwick" and m.v. "Roger M. Jones", class 1 A1
      Bulk Carrier or Tanker for Oil ESP HC-E E0 with Det Norske
      Veritas;

            

    

     

    
      	
              (ii)  

            	
              in
      respect of m.v. "Rip Hudner", class 1 A1 Bulk Carrier or Tanker for Oil
      ESP HC-EA E0 with Det Norske
Veritas;

            

    

     

    
      	
              (iii)  

            	
              in
      respect of m.v. "Searose G", class 1 A1 Bulk Carrier or Tanker for Oil ESP
      HC-EA GRAIN-U PST E0 LCS-SI IB(+) with Det Norske Veritas;
    and

            

    

     

    
      	
              (iv)  

            	
              in
      respect of mv. "Sagamore", class NKK NS* (Tob) (ESP)/MNS* with Nippon
      Kaiji Kyokai.

            

    

     

    
      	
              (f)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              3  

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

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              4  

            	
              Evidence
      that the relevant Borrowers have established the relevant Earnings Account
      and the Retention Account.

            

    

     

    
      	
              5  

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

            

    

     

    
      	
              6  

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

            

    

     

    
      	
              7  

            	
              The
      Lender being satisfied that:

            

    

     

    
      	
               
      

            	
              (a)

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

            

    

     

    
      	
               
      

            	
              (b)

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

            

    

     

    
      	
               
      

            	
              (c)

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

            

    

     

    

     

    

     

    

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule 3  –
Mandatory Cost formula

     

    
      	
              1  

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

            

    

     

    
      	
              2  

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

            

    

     

    
      	
              3  

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

            

    

     

    
      	
              E x 0.01

            	
              per
      cent per annum

            
	
              300

            	 
      

    

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

     

    
      	
              4  

            	
              For
      the purposes of this Schedule:

            

    

     

    
      	
              (a)  

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

            

    

     

    
      	
              (b)  

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

            

    

     

    
      	
              (c)  

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

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              5  

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

            

    

     

    
      	
              6  

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

            

    

     

    

     

    

     

    Schedule 4 –
Form of Effective Date Notice

     

    Bank
of Scotland plc

     

    New
Uberior House

     

    11 Earl
Grey Street

     

    Edinburgh
EH3 9BN

     

    
      	
              To:

            	
              BHOBO
      One Ltd.;

            

    

    BHOBO Two
Ltd.;

    BHOBO
Three Ltd.;

    RMJ OBO
Shipping Ltd.;

    Sagamore
Shipping Ltd.;

    OBO
Holdings Ltd.;

    Agawam
Shipping Corp.;

    Aquidneck
Shipping Corp.;

    Anawan
Shipping Corp.;

    Isabelle
Shipholdings Corp.

    Boss
Tankers Ltd.

    Date:                      ____
February 2010

     

    Dear
Sirs

     

    Effective
Date Notice

     

    We refer
to :

     

    
      	
              (i)

            	
              the
      loan agreement (the Existing Loan Agreement)
      dated 7 December 2007 between Agawam Shipping Corp., Aquidneck Shipping
      Corp., Anawan Shipping Corp., Isabelle Shipholdings Corp., Boss Tankers
      Ltd. (the Existing
      Borrowers) and Bank of Scotland plc relating to a $34,00,000
      facility to finance four MR product tankers;
and

            

    

     

    
      	
              (ii)

            	
              the  replacement
      loan agreement (the New
      Facility) dated ___ February 2010 between BHOBO One Ltd., BHOBO Two
      Ltd., BHOBO Three Ltd., RMJ OBO Shipping Ltd., Sagamore Shipping Ltd., OBO
      Holdings Ltd. Agawam Shipping Corp., Aquidneck Shipping Corp., Anawan
      Shipping Corp., Isabelle Shipholdings Corp., and Boss Tankers Ltd. (as
      joint and several borrowers) and Bank of Scotland plc relating to a
      $3,975,230 loan facility which replaces and supersedes the Existing Loan
      Agreement.

            

    

     

    We write
to confirm that:

     

    
      	
               
      

            	
              (i)

            	
              **                     2010
      is the Effective Date for the purpose of the New Facility and accordingly
      the provisions of Clause 2 of the New Facility shall apply;
      and

            

    

     

    (ii)           the
Total Accrued Debt (as defined in the Drawdown Notice) as at today's date is
$**                    .

     

    This
notice is governed by English law.  Clause 32 of the Loan Agreement
(jurisdiction) applies
in relation to this letter in the same way as it applies in relation to the Loan
Agreement.

     

    Yours
faithfully

     

    

     

    _______________________________

     

    for and
on behalf of Bank of Scotland
plc

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule 5  –
Form of Compliance Certificate

     

    COMPLIANCE
CERTIFICATE

     

    To:           Bank
of Scotland plc

     

    
      	
              From:

            	
              [·]

            

    

     

    
      	
              Date:

            	
              [•]
      [To be delivered no
      later than [one hundred and twenty (120) /forty-five (45)] days after each
      Reporting Date]

            

    

     

    

     

    $3,975,230
LOAN AGREEMENT DATED __ FEBRUARY 2010 (“AS AMENDED”) (THE
“AGREEMENT”)

     

    We refer
to the Agreement. Terms defined in the Agreement shall have the same meaning
when used in this Compliance Certificate.

     

    With
reference to clauses 10.13 (Compliance certificate) and
14 (Financial
covenants) of the Agreement, we confirm that as at [•] [insert relevant
Reporting Date]:

     

     

    a)           Minimum Value Adjusted
Equity

     

    The
Minimum Value Adjusted Equity of the Guarantor (on a consolidated basis) was
US$[•].

    

    The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain a Minimum Value Adjusted Equity of US$ 30,000,000.

     

    The
covenant set out in Clause 14.2.1 (Minimum Value Adjusted
Equity) is thus [not] satisfied.

     

     

    
      	
              b)

            	
              Positive working
      capital

            

    

     

    The
working capital of the Guarantor (on a consolidated basis) was [·].

     

    The
Guarantor (on a consolidated basis) shall at all times following the delivery of
the Compliance Certificate for the period ending 30 June 2010, ensure that its
current assets exceeds its current liabilities (excluding the current portion of
long term debt), all as determined in accordance with GAAP.

    

     

    The
covenant set out in Clause 14.2.2 (Positive working capital) is
thus [not] satisfied.

     

     

    c)           Minimum value

     

    The
Market Value of the Ships pursuant to the attached survey is [•].

    

     The
Borrowers shall ensure that the Market Value of the Ships shall be at least the
higher of:

     

    
      	
              (a)  

            	
              one
      hundred and thirty-five per cent (135%) of the amount outstanding under
      the Nordea Facility at any time;
and

            

    

     

    
      	
              (b)  

            	
              [●]
      per cent ([●]%) of the aggregate of (i) the amount outstanding under the
      Nordea Facility and (ii) the Advance at any
  time;

            

    

     

    The
covenant in Clause 14.2.3 (Minimum value) is thus [not]
satisfied.]

     

     

    d)           Cash and Cash
Equivalents

     

    The Cash
and Cash Equivalent of the Guarantor (on a consolidated basis) is [·].

     

    The
Guarantor (on a consolidated basis) shall at any time in the period from the
Effective Date and ending on the earlier of (i) 30 September 2010 and (ii) the
delivery of the Barge to Straits Offshore Ltd., ensure that it has Cash and Cash
Equivalents equal to or greater than $4,000,000 and at all times thereafter
endure that (on a consolidated basis) has Cash and Cash Equivalents equal to or
greater than USD 6,000,000.

    

    The
covenant in Clause 14.2.4 (Cash and Cash Equivalents) is
this [not] satisfied.

     

    e)           Minimum Equity
Ratio

     

    The
Equity Ratio of the Guarantor (on a consolidated basis) is [·]%.

     

    The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain an Equity Ratio of minimum twenty-five per cent
(25%).

     

    The
covenant in Clause 14.2.5 (Minimum Equity Ratio) is thus
[not] satisfied.

     

     

    
      	
              f)

            	
              Insurance. We confirm
      that each of the Ships is insured against such risks and in such amounts
      as set out in Appendix 1 hereto.

            

    

     

    
      	
              g)

            	
              We
      confirm that, as of the date hereof (i) each of the representations and
      warranties set out in clause 9 (Representations and
      warranties) of the Agreement is true and correct; and (ii) no event
      or circumstances has occurred and is continuing which constitute or may
      constitute an Event of Default.

            

    

    Yours
sincerely

     

    for and
on behalf of

     

    [·]

     

    

     

    By:
__________________________________

     

    Name:

     

    Title:  [authorised
officer]

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Borrowers

     

    

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    BHOBO One
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    BHOBO Two
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    BHOBO Three
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    RMJ OBO Shipping
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Sagamore Shipping
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    OBO Holdings
Ltd.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Boss Tankers
Ltd.                                                                )

    

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Agawam Shipping
Corp.                                                                )

    

    

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Aquidneck Shipping
Corp.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Anawan Shipping
Corp.                                                                )

    

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Isabelle Shipholdings
Corp.                                                                           )

    

     

    

     

    Guarantor

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    B+H Ocean Carriers
Ltd.                                                                )

    

     

    Lender

     

    Signed
by                                                                )

    duly
authorised for and on behalf
of                                                                           )

    Bank of Scotland
plc                                                                )

     

    
      
        
          
            GRK/54321.31100/8688553.08 Page

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