DATED 29 November 2011 PLATON MARINE LLC REA MARINE LLC KRONOS MARINE LLC SOCRATES MARINE LLC (as Borrowers) - and - ABN AMRO BANK N.V. and others (as Lenders) - and - ABN AMRO BANK N.V. (as Agent) - and – ABN AMRO BANK N.V. (as Security Agent)...

Exhibit 10.11

DATED 29 November 2011

PLATON MARINE LLC

REA MARINE LLC

KRONOS MARINE LLC

SOCRATES MARINE LLC

(as Borrowers)

- and -

ABN AMRO BANK N.V.

and others

(as Lenders)

- and -

ABN AMRO BANK N.V.

(as Agent)

- and –

ABN AMRO BANK N.V.

(as Security Agent)

US$91,371,000 SECURED

LOAN AGREEMENT

m.v. “JAPAN”

m.v. “SINGAPORE”

m.v. “OOCL NETHERLANDS”

m.v. “OOCL BRITAIN”

CONTENTS


		Page

1	Definitions and Interpretation		2

2	The Loan and its Purpose		16

3	Conditions of Utilisation		16

4	Advance		18

5	Repayment		18

6	Prepayment		19

7	Interest		21

8	Indemnities		23

9	Fees		27

10	Security and Application of Moneys		28

11	Representations		32

12	Undertakings and Covenants		35

13	Events of Default		46

14	Assignment and Sub-Participation		50

15	The Agent, the Security Agent and the Lenders		52

16	Set-Off		61

17	Payments		61

18	Notices		63

19	Partial Invalidity		65

20	Remedies and Waivers		65

21	Joint and several liability		65



22	Miscellaneous	67

23	Law and Jurisdiction	68

24	General Terms and Conditions	69

SCHEDULE 1: The Lenders and the Commitments		70

SCHEDULE 2: Conditions Precedent and Subsequent		71
Part I: Conditions precedent		71
Part II: Conditions subsequent		76

SCHEDULE 3: Calculation of Mandatory Cost		77

SCHEDULE 4: Form of Drawdown Notice		80

SCHEDULE 5: Form of Transfer Certificate		81

SCHEDULE 6: Form of Compliance Certificate		84

SCHEDULE 7: General Terms and Conditions		86

LOAN AGREEMENT

Dated: 29 November 2011

BETWEEN:

(1)

PLATON MARINE LLC (“Platon”), REA MARINE LLC (“Rea”), KRONOS MARINE LLC (“Kronos”) and SOCRATES MARINE LLC (“Socrates”), each a limited liability company formed and existing under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (together, the “Borrowers” and each a “Borrower”) jointly and severally; and

(2)	the banks listed in Schedule 1 (The Lenders and the Commitments), each acting through its office at the address indicated against its name in Schedule 1 (together the “Lenders” and each a “Lender”); and

(3)	ABN AMRO BANK N.V., with its registered address at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, acting as agent, arranger and underwriter through its office at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The Netherlands, (in that capacity the “Agent”); and

(4)	ABN AMRO BANK N.V., with its registered address at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, acting as security agent through its office at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The Netherlands, (in that capacity the “Security Agent”).

WHEREAS:

(A)	Each Borrower has agreed to purchase the relevant Borrower’s Vessel from the relevant Seller on the terms of the relevant MOA and intends to register that Borrower’s Vessel under the relevant flag specified below in the definition of “Borrowers’ Vessels”.

(B)

Each of the Lenders has agreed to advance to the Borrowers on a joint and several basis its Commitment (aggregating, with all the other Commitments, up to the lesser of (a) $91,371,000 and (b) 65% of the aggregate Purchase Price of the Borrowers’ Vessels) in up to four (4) Tranches to assist the Borrowers to finance part of the aggregate purchase price of the Borrowers’ Vessels.

IT IS AGREED as follows:

1	Definitions and Interpretation

1.1

In this Agreement:

“Accounts” means the Earnings Accounts and the Retention Account.

“Account Charges” means the deeds of charge referred to in Clause 10.1.4 (Security Documents) and “Account Charge” means any one of them.

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

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

“Assignments” means the deeds of assignment referred to in Clause 10.1.2 (Security Documents) and “Assignment” means each one of them.

“Availability Termination Date” means 30 December 2011 or such later date as the Lenders may in their discretion agree.

“Borrowers’ Vessels” means the following 5,500 TEU Panamax container carrier vessels with the IMO numbers set out below, and everything now or in the future belonging to them on board and ashore, currently registered under the flag of Hong Kong in the ownership of the respective Sellers set out below and intended to be sold to the respective Borrowers set out below and upon acquisition by the relevant Borrower to be re-registered under the flag of Hong Kong in the ownership of the relevant Borrower set out below on the terms of the MOAs with the same name and “Borrower’s Vessel” means any one of them:

Name of Vessel

IMO

no.

Seller

Borrower

Year

built

“JAPAN”

▇▇▇▇▇▇▇

Newcontai-ner No.4 Shipping Inc.

Platon

1996

the “Platon Vessel”


“SINGAPORE”	9143063	Newcontain-er No.7 Shipping Inc.	Rea	1997	the “Rea Vessel”
“OOCL NETHERLANDS”	9143075	Union Faith (H.K) Limited	Kronos	1997	the “Kronos Vessel”
“OOCL BRITAIN”	9102318	Newcontai-ner No.2 Shipping Inc.	Socrates	1996	the “Socrates Vessel”

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

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

“Charters” means any time charters or other contracts of employment in respect of a Vessel entered or to be entered into between a Borrower or the Collateral Owner and the Charterer for a period of duration in excess of twenty four (24) months on the terms and subject to the conditions of which a Borrower or the Collateral Owner will charter its Vessel to a Charterer and “Charter” means each one of them.

“Charterer” means a company that has entered into a Charter with a Borrower or the Collateral Owner in respect of a Vessel.

“Collateral Assignment” means the second priority deed of assignment of the Insurances, Earnings, Charters, Initial Charter and Requisition Compensation of the Collateral Vessel referred to in Clause 10.1.9 (Security Documents).

“Collateral Guarantee” means the guarantee and indemnity referred to in Clause 10.1.8 (Security Documents).

“Collateral Managers’ Undertakings” means the undertakings referred to in Clause 10.1.10 (Security Documents) and “Collateral Managers’ Undertaking” means each one of them.

“Collateral Mortgage” means the second preferred mortgage referred to in Clause 10.1.7 (Security Documents).

“Collateral Owner” means ZEUS ONE MARINE LLC, a limited liability company formed under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.

“Collateral Security Documents” means the Collateral Mortgage, the Collateral Guarantee, the Collateral Assignment and the Collateral Managers’ Undertakings and “Collateral Security Document” means each one of them.

“Collateral Vessel” means the 5,100 TEU panamax container vessel “CMA CGM ORCA” (IMO no. 9318113), built in 2007, currently registered under the name of the Collateral Owner under the flag of the Republic of Panama and everything now or in the future belonging to her on board and ashore.

“Commitment” means, in relation to a Lender, the amount of the Loan which that Lender agrees to advance to the Borrowers as its several liability as indicated against the name of that Lender in Schedule 1 (The Lenders and the Commitments) and/or, where the context permits, the amount of the Loan advanced by that Lender and remaining outstanding and “Commitments” means more than one of them.

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate).

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

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

“Default” means an Event of Default or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any

determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

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

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

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

“Drawdown Notice” means a notice substantially in the form set out in Schedule 4 (Form of Drawdown Notice).

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

“Earnings Account” means a bank account to be opened in the name of each Borrower with the Agent and designated “[name of Borrower] - Earnings Account” and “Earnings Accounts” means more than one of them.

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

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

“Facility Period” means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the

Security Parties have ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Finance Documents.

“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Agent and the Borrowers setting out any of the fees referred to in Clause 9 (Fees).

“Final Maturity Date” means, in respect of each Tranche, the earlier of (a) the date falling five years and six months following the Drawdown Date in respect of that Tranche and (b) 30 June 2017.

“Finance Documents” means this Agreement, the Security Documents, any Fee Letter and any other document designated as such by the Agent and the Borrowers and “Finance Document” means any one of them.

“Finance Parties” means the Agent, the Security Agent and the Lenders and “Finance Party” means any one of them.

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

(a)

moneys borrowed;

(b)

any acceptance credit;

(c)

any bond, note, debenture, loan stock or similar instrument;

(d)

any finance or capital lease;

(e)

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

(f)

deferred payments for assets or services;

(g)

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

(h)

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

(i)

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

(j)

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

“General Terms and Conditions” means the Agent’s general terms and conditions of business (as amended and/or supplemented from time to time by the Agent), a copy of the current version of which is set out in Schedule 7.

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

“Guarantor” means Poseidon Containers Holdings LLC, a limited liability company formed and existing under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and/or (where the context permits) any other person who shall at any time during the Facility Period give to the Lenders or to the Security Agent on their behalf a guarantee and/or indemnity for the repayment of all or part of the Indebtedness.

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

“IFRS” means International Financial Reporting Standards issued and/or adopted by the International Accounting Standards Board.

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

“Initial Charters” means (a) in respect of the Collateral Vessel a time charter or other contract of employment in respect of the Collateral Vessel dated 27 October 2010 entered into between the Collateral Owner and the relevant Initial Charterer for a period of duration of not less than 24 months at a daily rate of hire of $24,700 on the terms and subject to the conditions of which the Collateral Owner has

chartered the Collateral Vessel to the relevant Initial Charterer and (b) in respect of each Borrower’s Vessel a time charter or other contract of employment dated 2 November 2011 entered into between each Borrower and the relevant Initial Charterer for a period of duration of not less than 36 months at a net daily rate of hire of $28,144 on the terms and subject to the conditions of which each Borrower has chartered its Borrower’s Vessel to the relevant Initial Charterer.

“Initial Charterer” means (a) in respect of the Collateral Vessel, CMA CGM, of Marseille France and (b) in respect of each Borrower’s Vessel, Orient Overseas Container Line Limited of Hong Kong.

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

“Interest Payment Date” means each date for the payment of interest in accordance with Clause 7.8 (Accrual and payment of interest).

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

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

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

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

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

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

“LIBOR” means:

(a)

the applicable Screen Rate; or

(b)

(if no Screen Rate is available for any Interest Period) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks (or by two of them if one is unable to quote) to leading banks in the London interbank market,

at 11.00 a.m. two (2) Business Days before the first day of the relevant Interest Period for the offering of deposits in Dollars in an amount comparable to the relevant Tranche (or any relevant part of the relevant Tranche) and for a period comparable to the relevant Interest Period and, if any such rate is below zero, LIBOR will be deemed to be zero.

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

“Majority Lenders” means a Lender or Lenders whose Commitments aggregate more than sixty six per cent (66%) of the aggregate of all the Commitments.

“Management Agreements” means the agreements for the commercial and/or technical management of the Vessels entered into between the Borrowers or the Collateral Owner (as the case may be) respectively and the Managers, the terms of which must be acceptable to the Agent in its discretion, and “Management Agreement” means any one of them.

“Managers” means (i) Technomar Shipping Inc., as technical managers, a company incorporated under the laws of the Republic of Liberia whose registered address is at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and (ii) Conchart Commercial Inc., as commercial managers, a company incorporated under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ or such other commercial and/or technical managers of the Vessels nominated by the Borrowers or the Collateral Owner (as the case may be) as the Agent may approve.

“Managers’ Undertakings” means the undertakings referred to in Clause 10.1.6 (Security Documents) and “Managers’ Undertaking” means each one of them.

“Mandatory Cost” means the percentage rate per annum calculated by the Agent in accordance with Schedule 3 (Calculation of Mandatory Cost).

“Margin” means three point three five per cent (3.35%) per annum.

“Market Value”, in respect of a Borrower’s Vessel, means the market value of that Borrower’s Vessel (conclusively determined by the average of two valuations to be obtained by the Agent from two reputable, independent and first class firms of shipbrokers appointed by the Agent and reporting to the Agent (on the basis of a charter-inclusive sale from the relevant Drawdown Date in respect of the relevant Borrower’s Vessel until the second anniversary of such relevant Drawdown Date and on the basis of a charter-free sale from the second anniversary of the relevant Drawdown Date in respect of the relevant Borrower’s Vessel until the end of the Facility Period) for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and a willing buyer and the Borrowers shall bear the cost of two such valuations each calendar year, unless a Default has occurred, in which case the cost of all such valuations shall be borne by the Borrowers).

“Maximum Loan Amount” means an aggregate amount not exceeding the lesser of (a) ninety one million three hundred and seventy one thousand Dollars ($91,371,000) and (b) 65% of the aggregate Purchase Price of the Borrowers’ Vessels.

“Maximum Tranche Amount” means:-

(a)

in respect of Tranche A, an aggregate amount not exceeding the lesser of (a) twenty two million one hundred and eighty seven thousand five hundred Dollars ($22,187,500) and (b) sixty five per cent (65%) of the Purchase Price of the Socrates Vessel;

(b)

in respect of Tranche B, an aggregate amount not exceeding the lesser of (a) twenty two million one hundred and eighty seven thousand five hundred Dollars ($22,187,500) and (b) sixty five per cent (65%) of the Purchase Price of the Platon Vessel;

(c)

in respect of Tranche C, means an aggregate amount not exceeding the lesser of (a) twenty three million four hundred and ninety eight thousand Dollars ($23,498,000) and (b) sixty five per cent (65%) of the Purchase Price of the Rea Vessel; and

(d)

in respect of Tranche D, means an aggregate amount not exceeding the lesser of (a) twenty three million four hundred and ninety eight thousand Dollars ($23,498,000) and (b) sixty five per cent (65%) of the Purchase Price of the Kronos Vessel.

“Membership Interest Pledge Agreements” means the pledges of membership interests referred to in Clause 10.1.5 (Security Documents) and “Membership Interest Pledge Agreement” means each one of them.

“MOAs” means the memoranda of agreement each dated 2 November 2011 on the terms and subject to the conditions of which the relevant Seller will sell the relevant Borrower’s Vessel to the relevant Borrower respectively for the relevant Purchase Price and “MOA” means each one of them.

“Mortgages” means the statutory mortgages referred to in Clause 10.1.1 (Security Documents) together with the Deeds of Covenants and “Mortgage” means each one of them.

“Original Financial Statements” means the annual audited financial statements of the Borrowers for the financial year ending 31 December 2011 and the annual audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2010.

“Pledgor” means Poseidon Containers Holdings LLC, a limited liability company formed and existing under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.

“Proportionate Share” means, at any time, the proportion which a Lender’s Commitment (whether or not advanced) then bears to the aggregate Commitments of all the Lenders (whether or not advanced).

“Purchase Price” means:-

(a)

in respect of the Platon Vessel, an aggregate amount of thirty four million one hundred and thirty five thousand Dollars ($34,135,000);

(b)

in respect of the Rea Vessel, an aggregate amount of thirty six million one hundred and fifty thousand Dollars ($36,150,000);

(c)

in respect of the Kronos Vessel, an aggregate amount of thirty six million one hundred and fifty thousand Dollars ($36,150,000);

(d)

in respect of the Socrates Vessel, an aggregate amount of thirty four million one hundred and thirty five thousand Dollars ($34,135,000); and

(e)

in respect of all four of the Borrowers’ Vessels, an aggregate amount of one hundred and forty million five hundred and seventy thousand Dollars ($140,570,000).

“Reference Banks” means, in relation to LIBOR, the branch of ABN Amro Bank N.V. at 93, Coolsingel, 3012 AE, Rotterdam, The Netherlands, and the London branch of any other bank or financial institution selected by the Agent.

“Relevant Documents” means the Finance Documents, the MOAs, the Charters, the Initial Charters and the Management Agreements.

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

“Repayment Instalment” means any instalment of a Tranche to be repaid by the Borrowers under Clause 5.1 (Repayment of each Tranche).

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

“Retention Account” means a bank account to be opened in the names of the Borrowers with the Agent and designated “[Name of Borrower] - Retention Account”.

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

“Security Documents” means the Mortgages, the Deeds of Covenants, the Assignments, the Guarantee, the Account Charges, the Membership Interest Pledge Agreements, the Managers’ Undertakings, the Collateral Security Documents or (where the context permits) any one or more of them and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and “Security Document” means any one of them.

“Security Parties” means the Borrowers, the Collateral Owner, the Guarantor, the Pledgor, the Managers and any other person who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness, and “Security Party” means any one of them.

“Sellers” means the persons specified as such in the definition of “Borrowers’ Vessels” above and “Seller” means each one of them.

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

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

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

“Total Loss” means:

(a)

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

(b)

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

(c)

the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of a Vessel or the Collateral Vessel (not falling within (b) above), unless that Vessel or the Collateral Vessel is released and returned to the possession of the relevant Borrower or the Collateral Owner

within thirty (30) days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.

“Tranche A” means the aggregate amount of Tranche A from time to time advanced by the Lenders to the Borrowers pursuant to Clause 4, or, where the context permits, the amount advanced and for the time being outstanding.

“Tranche B” means the aggregate amount of Tranche B from time to time advanced by the Lenders to the Borrowers pursuant to Clause 4, or, where the context permits, the amount advanced and for the time being outstanding.

“Tranche C” means the aggregate amount of Tranche C from time to time advanced by the Lenders to the Borrowers pursuant to Clause 4, or, where the context permits, the amount advanced and for the time being outstanding.

“Tranche D” means the aggregate amount of Tranche D from time to time advanced by the Lenders to the Borrowers pursuant to Clause 4, or, where the context permits, the amount advanced and for the time being outstanding.

“Tranches” means any two or more of Tranche A, Tranche B, Tranche C and Tranche D as the context may require and “Tranche” means each one of them.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrowers.

“Transfer Date” means, in relation to any Transfer Certificate, the later of:

(a)

the proposed Transfer Date specified in the Transfer Certificate; and

(b)

the date on which the Agent executes the Transfer Certificate.

“Trust Property” means:

(a)

all benefits derived by the Security Agent from Clause 10 (Security and Application of Moneys); and

(b)

all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,

with the exception of any benefits arising solely for the benefit of the Security Agent.

“Vessels” means the Borrowers’ Vessels and the Collateral Vessel and “Vessel” means each one of them.

“Zeus Loan Agreement” means a secured loan facility agreement dated 10 February 2011 entered into between the Collateral Owner, as borrower and ABN AMRO BANK N.V., as lender pursuant to which ABN AMRO BANK N.V. has agreed to advance to the Collateral Owner an amount not exceeding thirty one million five hundred thousand Dollars ($31,500,000).

1.2

In this Agreement:

1.2.1

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

1.2.2

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

1.2.3

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

1.2.4

references to this Agreement include the Recitals and the Schedules;

1.2.5

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

1.2.6

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

1.2.7

references to “indebtedness” include any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

1.2.8

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

1.2.9

references to any Finance Party include its successors, transferees and assignees; and

1.2.10

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

1.3

Offer letter

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

2	The Loan and its Purpose

2.1

Amount Subject to the terms of this Agreement, the Lenders agree to make available to the Borrowers a term loan comprising all Tranches in an aggregate amount not exceeding the Maximum Loan Amount.

2.2

Finance Parties’ obligations The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other party to the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.3

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

2.4

Monitoring No Finance Party is bound to monitor or verify the application of any amount borrowed under this Agreement.

3	Conditions of Utilisation

3.1

Conditions precedent The Borrowers are not entitled to have any Tranche advanced unless the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent), save that references in Section 2 of that Part I to “the Vessel” or the “Borrower’s Vessel” or to any person or document relating to a Vessel or a Borrower’s Vessel shall be deemed to relate solely to any Vessel or any Borrower’s Vessel specified in the relevant Drawdown

Notice or to any person or document relating to that Vessel or that Borrower’s Vessel respectively.

3.2

Further conditions precedent The Lenders will only be obliged to advance a Tranche if on the date of the Drawdown Notice and on the proposed relevant Drawdown Date:

3.2.1

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

3.2.2

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

3.3

Tranche limit The Lenders will only be obliged to advance a Tranche if:

3.3.1

that Tranche will not increase the Loan to a sum in excess of the Maximum Loan Amount; and

3.3.2

that Tranche will not cause the amount of the Maximum Tranche Amount in respect of the Tranche in question to be exceeded.

3.4

Conditions subsequent The Borrowers undertake to deliver or to cause to be delivered to the Agent on, or as soon as practicable after, the relevant Drawdown Date in respect of each Tranche, the additional documents and other evidence listed in Part II of Schedule 2 (Conditions subsequent), save that references in that Part II to “the Borrower’s Vessel” or to any person or document relating to a Borrower’s Vessel shall be deemed to relate solely to any Borrower’s Vessel specified in the relevant Drawdown Notice or to any person or document relating to that Borrower’s Vessel respectively.

3.5

No waiver If the Lenders in their sole discretion agree to advance all or any part of a Tranche to the Borrowers before all of the documents and evidence required by Clause 3.1 (Conditions precedent) have been delivered to or to the order of the Agent, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the Agent no later than thirty (30) days after the relevant Drawdown Date or such other date specified by the Agent.

The advance of all or any part of a Tranche under this Clause 3.5 shall not be taken as a waiver of the Lenders’ right to require production of all the documents and evidence required by Clause 3.1 (Conditions precedent).

3.6

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

3.6.1

be in form and substance acceptable to the Agent; and

3.6.2

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

4	Advance

4.1

Drawdown Request The Borrowers may request a Tranche to be advanced in one amount on any Business Day prior to the Availability Termination Date by delivering to the Agent a duly completed Drawdown Notice not more than ten (10) and not fewer than two (2) Business Days before the proposed Drawdown Date. Any such Drawdown Notice shall be signed by an authorised signatory of the Borrowers and, once delivered, is irrevocable.

4.2

Lenders’ participation Subject to Clauses 2 (The Loan and its Purpose) and 3 (Conditions of Utilisation), the Agent shall promptly notify each Lender of the receipt of a Drawdown Notice, following which each Lender shall advance its Proportionate Share of the relevant Tranche to the Borrowers through the Agent on the relevant Drawdown Date.

5	Repayment

5.1

Repayment of each Tranche The Borrowers agree to repay:

5.1.1

Tranche A and Tranche B to the Agent for the account of the Lenders by twenty two (22) consecutive quarterly instalments, the first twelve (1^st- 12^th) such instalments each in the sum of one million one hundred and seventy one thousand eight hundred and ninety six Dollars ($1,171,896), the following nine (12^th – 21^st) such instalments each in the sum of eight hundred and twelve thousand five hundred Dollars ($812,500) and the last (22^nd) such instalment in the sum of eight hundred and twelve thousand four hundred and ninety eight Dollars ($812,498), the first instalment falling due

on the date which is three (3) calendar months after the relevant Drawdown Date in respect of that Tranche and subsequent instalments falling due at consecutive intervals of three (3) calendar months thereafter with the final instalment being payable not later than the Final Maturity Date; and

5.1.2

Tranche C and Tranche D to the Agent for the account of the Lenders by twenty two (22) consecutive quarterly instalments, the first twelve (1^st- 12^th) such instalments each in the sum of one million two hundred and eighty one thousand forty two Dollars ($1,281,042), the following nine (12^th – 21^st) such instalments each in the sum of eight hundred and twelve thousand five hundred Dollars ($812,500) and the last (22^nd) such instalment in the sum of eight hundred and twelve thousand nine hundred and ninety five Dollars ($812,995), the first instalment falling due on the date which is three (3) calendar months after the relevant Drawdown Date in respect of that Tranche and subsequent instalments falling due at consecutive intervals of three (3) calendar months thereafter with the final instalment being payable not later than the Final Maturity Date.

5.2

Reduction of Repayment Instalments If the aggregate amount advanced to the Borrowers under Tranche A or Tranche B is less than $22,187,750 and under Tranche C or Tranche D is less than $23,498,000, the amount of each Repayment Instalment in respect of that Tranche shall be reduced pro rata to the amount actually advanced.

5.3

Synchronisation of repayment The Agent shall have the right to synchronise the repayment of the four Tranches in one single repayment profile, as shall be notified to the Borrowers.

5.4

Reborrowing The Borrowers may not reborrow any part of a Tranche which is repaid or prepaid.

6	Prepayment

6.1

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

6.1.1

that Lender shall promptly notify the Agent of that event;

6.1.2

upon the Agent notifying the Borrowers, the Commitment of that Lender (to the extent not already advanced) will be immediately cancelled; and

6.1.3

the Borrowers shall repay that Lender’s Commitment in respect of each Tranche (to the extent already advanced) on the last day of the current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the remaining Repayment Instalments in respect of that Tranche shall be reduced pro rata.

6.2

Voluntary prepayment of a Tranche The Borrowers may prepay the whole or any part of any Tranche on any Interest Payment Date (but, if in part, being an amount that reduces the Loan by a minimum amount of $500,000 or integral multiples thereof) subject as follows:

6.2.1

they give the Agent not less than 15 days’ (or such shorter period as the Majority Lenders may agree) prior notice;

6.2.2

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

6.2.3

in the case of a re-finance of the Loan in full by another bank or financial institution, the Borrowers shall, simultaneously with that re-finance, pay to the Agent, in addition to the amount prepaid, a fee of an amount equal to zero point twenty per cent (0.20%) of the amount prepaid; and

6.2.4

any prepayment under this Clause 6.2 shall satisfy the obligations under Clause 5.1 (Repayment of each Tranche) at the Borrowers’ sole discretion.

6.3

Mandatory prepayment of a Tranche If a Borrower’s Vessel is sold, re-financed or scrapped by a Borrower or becomes a Total Loss, the Borrowers shall, simultaneously with any such sale, re-finance, scrapping or within one hundred and eighty (180) days after any such Total Loss, prepay the whole of the Indebtedness corresponding to the Tranche then outstanding in relation to that Borrower’s Vessel.

6.4

Restrictions Any notice of prepayment given under this Clause 6 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall

specify the date or dates upon which the relevant prepayment is to be made and the amount of that prepayment.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs and subject to Clause 6.2.3 without premium or penalty.

If the Agent receives a notice under this Clause 6 it shall promptly forward a copy of that notice to the Borrowers or the Lenders, as appropriate.

7	Interest

7.1

Interest Periods The period during which each Tranche shall be outstanding under this Agreement shall be divided into consecutive Interest Periods of three, six, nine or twelve months’ duration, as selected by the Borrowers by written notice to the Agent not later than 11.00 a.m. on the third Business Day before the beginning of the Interest Period in question, or such other duration as may be agreed by the Agent (acting on the instructions of all the Lenders).

7.2

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

7.3

Second and subsequent Tranches If the second or any subsequent Tranche is made otherwise than on the first day of an Interest Period for the balance of the Loan, there shall be a separate initial Interest Period for that Tranche commencing on its Drawdown Date and expiring on the final date of the then current Interest Period for the balance of the Loan.

7.4

Interest Periods to meet Repayment Dates If an Interest Period will expire after the next Repayment Date in respect of the relevant Tranche, there shall be a separate Interest Period for a part of that Tranche equal to the Repayment Instalment due on that next Repayment Date and that separate Interest Period shall expire on that next Repayment Date.

7.5

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

7.6

Interest rate During each Interest Period interest shall accrue on each Tranche at the rate determined by the Agent to be the aggregate of (a) the Margin, (b) LIBOR and (c) the Mandatory Cost, if any.

7.7

Failure to select Interest Period If the Borrowers at any time fail to select or agree an Interest Period in accordance with Clause 7.1 (Interest Periods), the interest rate applicable shall be the rate determined by the Agent in accordance with Clause 7.6 (Interest rate) for an Interest Period of such duration (not exceeding six months) as the Agent may select.

7.8

Accrual and payment of interest Interest shall accrue from day to day, shall be calculated on the basis of a 360 day year and the actual number of days elapsed (or, in any circumstance where market practice differs, in accordance with the prevailing market practice) and shall be paid by the Borrowers to the Agent for the account of the Lenders on the earlier of (a) the last day of each Interest Period and (b) quarterly.

7.9

Default interest If a Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent (2%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Tranche in the currency of the overdue amount for successive Interest Periods, each selected by the Agent (acting reasonably). Any interest accruing under this Clause 7.9 shall be immediately payable by that Borrower on demand by the Agent. If unpaid, any such interest will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

7.10

Alternative interest rate If either (a) the applicable Screen Rate is not available for any Interest Period and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for that Interest Period or (b) a Lender or Lenders inform the Agent by written notice that the cost to it or them of obtaining matching deposits for any Interest Period would be in excess of LIBOR and that notice is received by

the Agent no later than close of business in London on the day LIBOR is determined for that Interest Period:

7.10.1

the Agent shall give notice to the Lenders and the Borrowers of the occurrence of such event; and

7.10.2

the rate of interest on each Lender’s Commitment in that Tranche for that Interest Period shall be the rate per annum which is the sum of:

(a)

the Margin; and

(b)

the rate notified to the Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its Commitment in that Tranche from whatever source it may reasonably select; and

(c)

the Mandatory Cost, if any, applicable to that Lender’s Commitment in that Tranche.

7.11

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

8	Indemnities

8.1

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

8.1.1

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

8.1.2

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

8.1.3

any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of the Borrowers’ Vessels).

8.2

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

8.3

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

8.4

Currency indemnity In the event of a Finance Party receiving or recovering any amount payable under a Finance Document in a currency other than the Currency of Account, and if the amount received or recovered is insufficient when converted into the Currency of Account at the date of receipt to satisfy in full the amount due, the Borrowers shall, promptly on the Agent’s written demand, pay to the Agent for the account of the relevant Finance Party such further amount in the Currency of Account as is sufficient to satisfy in full the amount due and that further amount shall be due

to the Agent on behalf of the relevant Finance Party as a separate debt under this Agreement.

8.5

Increased costs If, by reason of the introduction of any law, or any change in any law, or any change in the interpretation or administration of any law, or compliance with any request or requirement from any central bank or any fiscal, monetary or other authority occurring after the date of this Agreement (including the implementation or application of or compliance with the Basel II Accord or any other Basel II Regulation or Basel III (whether such implementation, application or compliance is by any central bank or any fiscal, monetary or other authority, a Finance Party or the holding company of a Finance Party)):

8.5.1

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

8.5.2

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

8.5.3

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

8.5.4

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

8.5.5

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

and the result of any of the above shall be to increase the cost to a Finance Party (or to the holding company of a Finance Party) of that Finance Party making or maintaining its Commitment, or to cause a Finance Party to suffer (in its opinion) a material reduction in the rate of return on its overall capital below the level which it reasonably anticipated at the date of this Agreement and which it would have been able to achieve but for its entering into this Agreement and/or performing its

obligations under this Agreement, or to cause a reduction in any amount due and payable to a Finance Party under any of the Finance Documents, then the Finance Party affected shall notify the Agent and the Borrowers shall from time to time pay to the Agent on demand for the account of that Finance Party the amount which shall compensate that Finance Party (or the relevant holding company) for such additional cost or reduced return or reduced amount. A certificate signed by an authorised signatory of that Finance Party setting out the amount of that payment and the basis of its calculation shall be submitted to the Borrowers and shall be conclusive evidence of such amount save for manifest error or on any question of law.

For the purposes of this Clause 8.5:

“Basel II Accord” means the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement;

“Basel II Approach” means, in relation to a Finance Party, either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or its holding company) for the purpose of implementing or complying with the Basel II Accord;

“Basel II Regulation” means (a) any law or regulation implementing the Basel II Accord or (b) any Basel II Approach adopted by a Finance Party;

“Basel III” means (a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated and (b) any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”; and

“holding company” means, in respect of a Finance Party, the company or entity (if any) within the consolidated supervision of which that Finance Party is included.

8.6

Events of Default The Borrowers shall indemnify each Finance Party from time to time, by payment to the Agent (for the account of that Finance Party) promptly on the

Agent’s written demand, against all losses, costs and liabilities incurred or sustained by that Finance Party as a consequence of any Event of Default.

8.7

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

8.8

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

8.9

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

Fees

9.1

Commitment fee The Borrowers shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a fee computed at the rate of forty per cent (40%) of the Margin per annum on the undrawn amount of the Loan from time to time from 10 November 2011 until the earlier of the Drawdown Date in respect

of the final Tranche and the Availability Termination Date. The accrued commitment fee is payable on the last day of each successive period of three months from the date of this Agreement until the earlier of the Drawdown Date in respect of the final Tranche and the Availability Termination Date, both dates inclusive, and shall accrue from day to day, on the basis of a 360 day year and the actual number of days elapsed, and shall be paid quarterly in arrears with a final payment on the earlier of the Drawdown Date in respect of the final Tranche and the Availability Termination Date.

9.2

Arrangement fee The Borrowers shall pay to the Agent in its capacity as agent for the account of arranger an arrangement fee in the amount and at the times agreed in a Fee Letter.

9.3

Agency fee The Borrowers shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

10	Security and Application of Moneys

10.1

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

10.1.1

first priority statutory mortgages over the Borrowers’ Vessels together with collateral deeds of covenants;

10.1.2

first priority deeds of assignment of the Insurances, Earnings, Charters, Initial Charter and Requisition Compensation of the Borrowers’ Vessels;

10.1.3

a guarantee and indemnity from the Guarantor;

10.1.4

first priority deeds of charge over the Accounts and all amounts from time to time standing to the credit of the Accounts;

10.1.5

first priority pledges of all the membership interests of the Borrowers;

10.1.6

letters of undertaking from the Managers in respect of the Borrowers and the Borrowers’ Vessels;

10.1.7

a second preferred mortgage over the Collateral Vessel;

10.1.8

a guarantee and indemnity from the Collateral Owner;

10.1.9

a second priority deed of assignment of the Insurances, Earnings, Charters, Initial Charter and Requisition Compensation of the Collateral Vessel; and

10.1.10

second priority letters of undertaking from the Managers in respect of the Collateral Owner and the Collateral Vessel.

10.2

Earnings and Retention Accounts The Borrowers shall maintain the Accounts with the Agent for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents.

10.3

Earnings Each Borrower shall procure that all Earnings and any Requisition Compensation are credited to the relevant Earnings Account.

10.4

Transfers to Retention Account On the day in each calendar month during the Facility Period which numerically corresponds to the first Drawdown Date in respect of each Tranche (or, if there is no such day, on the last Business Day of that month), the Borrowers shall procure that there is transferred from the relevant Earnings Account to the Retention Account:

10.4.1

firstly, any amounts due to the Lenders under the Finance Documents, other than principal and interest on the relevant Tranche; and

10.4.2

secondly, one-third of the amount of the Repayment Instalment due on the next Repayment Date (which shall be the day for that transfer if that day is a Repayment Date) and the amount of interest in respect of the relevant Tranche due on the next Interest Payment Date (which shall be deemed to be the day for that transfer if that day is an Interest Payment Date) divided by the number of months between the last Interest Payment Date (or, if none, the Drawdown Date in respect of that Tranche) and that next Interest Payment Date,

and the Borrowers irrevocably authorise the Agent to make those transfers.

10.5

Additional payments to Retention Account If for any reason the amount standing to the credit of the relevant Earnings Account is insufficient to make any transfer to

the Retention Account required by Clause 10.4 (Transfers to Retention Account), the Borrowers shall, without demand, procure that there is credited to the Retention Account, on the date on which the relevant amount would have been transferred from the Earnings Account, an amount equal to the amount of the shortfall.

10.6

Application of Retention Account The Borrowers shall procure that there is transferred from the Retention Account to the Agent:

10.6.1

any amounts due to the Lenders under the Finance Documents, other than principal and interest on the relevant Tranche, on the date when such amounts are due;

10.6.2

on each Repayment Date in respect of the relevant Tranche the amount of the Repayment Instalment then due; and

10.6.3

on each Interest Payment Date in respect of the relevant Tranche the amount of interest then due,

and the Borrowers irrevocably authorise the Agent to make those transfers.

10.7

Borrowers’ obligations not affected If for any reason the amount standing to the credit of the Retention Account is insufficient to pay any amounts due to the Agent or to make any payment of interest when due, the Borrowers’ obligation to pay that amount or to make that payment of interest shall not be affected.

10.8

Release of surplus Any amount remaining to the credit of an Earnings Account following the making of any transfer required by Clause 10.4 (Transfers to Retention Account) shall (unless a Default shall have occurred and be continuing) be released to or to the order of the Borrowers.

10.9

Relocation of Accounts At any time following the occurrence and during the continuation of a Default, the Agent may without the consent of the Borrowers relocate either or both of the Accounts to any other branch of the Agent, without prejudice to the continued application of this Clause 10 and the rights of the Finance Parties under the Finance Documents.

10.10

Application after acceleration From and after the giving of notice to the Borrowers by the Agent under Clause 13.2 (Acceleration), the Borrowers shall procure that all sums from time to time standing to the credit of either of the

Accounts are immediately transferred to the Agent for application in accordance with Clause 10.11 (General application of moneys) and the Borrowers irrevocably authorise the Agent to make those transfers.

10.11

General application of moneys Each Borrower, subject to Clause 10.12 (Application of moneys on mandatory prepayment), irrevocably authorises the Agent and the Security Agent and shall procure that the Collateral Owner shall (where relevant) irrevocably authorise the Agent and the Security Agent (subject to the prior rights of ABN AMRO Bank N.V. as lender under the Zeus Loan Agreement) to apply all sums which either of them may receive:

10.11.1

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

10.11.2

by way of payment of any sum in respect of the Insurances, Earnings, Charters, Initial Charter or Requisition Compensation of its Vessel; or

10.11.3

by way of transfer of any sum from either of the Accounts; or

10.11.4

otherwise arising under or in connection with any Security Document,

in or towards satisfaction, or by way of retention on account, of the Indebtedness, firstly in or towards payment of expenses and all sums other than principal or interest which may be due to the Lenders under the Finance Documents, secondly in or towards payment of any default interest, thirdly in or towards payment of any arrears of interest due in respect of the Loan and fourthly in or towards repayment of the Loan.

10.12

Application of moneys on mandatory prepayment Each Borrower irrevocably authorises the Agent and the Security Agent to apply all sums which any of them may receive pursuant to a sale, re-finance or scrapping by that Borrower of its Borrower’s Vessel or a Total Loss of its Borrower’s Vessel in or towards satisfaction of the prepayment due and payable by virtue of that sale, re-finance or scrapping or Total Loss under Clause 6.3 (Mandatory prepayment), but the Borrowers’ obligation to make that prepayment shall not be affected if those sums are insufficient to satisfy that obligation.

10.13

Additional security If at any time the aggregate of the Market Value of the Borrowers’ Vessels and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent in its discretion (in all other cases)) for the time being provided to the Security Agent under this Clause 10.13 is less than (a) one hundred and forty five per cent (145%) of the amount of the Loan then outstanding from the first Drawdown Date until the third anniversary of that Drawdown Date and (b) one hundred and sixty six per cent (166%) of the amount of the Loan then outstanding from the third anniversary of the first Drawdown Date until the end of the Facility Period, the Borrowers shall, within ten (10) Business Days of the Agent’s request, at the Borrowers’ option:

10.13.1

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

10.13.2

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

10.13.3

prepay the Loan in the amount of the shortfall.

Clauses 5.4 (Reborrowing), 6.2.4 (Voluntary prepayment of a Tranche) and 6.4 (Restrictions) shall apply, mutatis mutandis, to any prepayment made under this Clause 10.13 and the value of any additional security provided shall be determined as stated above.

11	Representations

11.1

Representations The Borrowers make the representations and warranties set out in this Clause 11.1 to each Finance Party on the date of this Agreement.

11.1.1

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

11.1.2

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

11.1.3

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

(a)

any law or regulation applicable to that Security Party;

(b)

the constitutional documents of that Security Party; or

(c)

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

and in borrowing the Loan, the Borrowers are acting for their own account.

11.1.4

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

11.1.5

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

(a)

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

(b)

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

have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part II of Schedule 2 (Conditions subsequent).

11.1.6

Governing law and enforcement The choice of a particular law as the governing law of any Finance Document expressed to be governed by that law will be recognised and enforced in the jurisdiction of formation or

incorporation of each relevant Security Party, and any judgment obtained in the jurisdiction submitted to in any Finance Document will be recognised and enforced in the jurisdiction of formation of each relevant Security Party.

11.1.7

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

11.1.8

No filing or stamp taxes Under the law of jurisdiction of formation of each relevant Security Party it is not necessary that 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 the Finance Documents or the transactions contemplated by the Finance Documents.

11.1.9

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

11.1.10

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

11.1.11

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

11.1.12

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

11.1.13

Disclosure of material facts The Borrowers are not aware of any material facts or circumstances which have not been disclosed to the Agent and which

might, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.

11.1.14

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

11.1.15

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

11.2

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

12	Undertakings and Covenants

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

12.1

Information undertakings

12.1.1

Financial statements The Borrowers shall supply and shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within 180 days after the end of each of their financial years, the Borrowers’ and the Guarantor’s audited financial statements for that financial year, together with a Compliance Certificate, signed by an officer or the chief accountant of the relevant Borrower or the Guarantor respectively, setting out (in reasonable detail) computations as to

compliance with Clause 12.2 (Financial covenants) as at the date as at which those financial statements were drawn up.

12.1.2

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

(a)

shall be certified by an officer or the chief accountant of the relevant Borrower or the Guarantor (as the context requires) as fairly representing its financial condition as at the date as at which those financial statements were drawn up; and

(b)

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

(i)

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

(ii)

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

12.1.3

Interim financial statements The Borrowers shall supply and shall procure that the Guarantor shall supply to the Agent as soon as the same become available, but in any event within ninety (90) days after the end of each half-year during each of its financial years, the Borrowers’ and the Guarantor’s semi-annual management accounts for that half-year, together in each case with a Compliance Certificate, signed by an officer or the chief

accountant of the relevant Borrower or Guarantor (as the context requires), setting out (in reasonable detail) computations as to compliance with Clause 12.2 (Financial covenants) as at the date as at which those accounts were drawn up.

12.1.4

Information: miscellaneous The Borrowers shall supply to the Agent:

(a)

all documents dispatched by any Borrower to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched provided same refer to matters that (i) may adversely affect the ability of the a Borrower to repay the Loan to the Lenders and (ii) may adversely affect the business, assets, financial condition or credit worthiness of a Borrower;

(b)

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

(c)

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

12.1.5

Notification of default

(a)

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

(b)

Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by a senior officer on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

12.1.6

“Know your customer” checks If:

(a)

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

(b)

any change in the status of a Borrower after the date of this Agreement; or

(c)

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

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

12.2

Financial covenants

12.2.1

Borrower’s financial covenants Each Borrower shall at all times during the Facility Period maintain a minimum quarterly average Cash with the Agent at least equal to five hundred thousand Dollars ($500,000).

12.2.2

Guarantor’s financial covenants The Borrowers shall procure that the Guarantor shall at all times during the Facility Period:

(a)

maintain Leverage of equal to or less than seventy five per cent (75%); and

(b)

maintain a Net Worth of not less than fifty million Dollars ($50,000,000).

The expressions used in this Clause 12.2 shall be construed in accordance with IFRS, and for the purposes of this Agreement:

“Cash” means cash credited in the Earnings Accounts which is not subject to any charge back or other Encumbrance (other than in favour of the Lenders) and to which the Borrowers have free, immediate and direct access.

“Financial Statements” means the financial statements of the Borrowers and the Guarantor provided in accordance with Clause 12.1.1 and Clause 12.1.3.

“Fleet Vessels” means any vessel (including the Vessels) from time to time wholly owned by the Guarantor (directly or indirectly) (each a “Fleet Vessel”).

“Fleet Market Value” means in relation to a Fleet Vessel, the market value of such Fleet Vessel conclusively determined by the average of two valuations to be provided by reputable, independent and first class firms of shipbrokers acceptable to the Agent semi-annually for each Fleet Vessel on the basis of a charter-free sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and a willing buyer and at the cost of the Borrowers.

“Leverage” means the ratio of Total Consolidated Long Term Debt to Value Adjusted Total Assets, as shown in the applicable Financial Statement of the Guarantor for any accounting period and determined in accordance with IFRS.

“Net Worth” means equity payments already advanced in respect of the Fleet Vessels less accumulated dividends plus retained earnings of the Fleet Vessels, as each such term is defined in the applicable Financial Statements for the Guarantor determined in accordance with IFRS.

“Total Assets” means, in respect of the Guarantor, the amount of total assets of the Guarantor at any time on a consolidated basis which would be included in the applicable Financial Statements for the Guarantor as total assets determined in accordance with IFRS.

“Total Consolidated Long Term Debt” means, in respect of the Guarantor, the amount of total liabilities of the Guarantor (as such term is defined in the applicable Financial Statements of the Guarantor) at any time on a consolidated basis which would be included in the applicable Financial Statements of the Guarantor as total long term debt in accordance with IFRS including the current portion of long term debt (as such term is defined in the applicable Financial Statements for the Guarantor).

“Value Adjusted Total Assets” means the Total Assets of the Guarantor adjusted in each case for the difference of the book value of the Fleet Vessels (as evidenced in the most recent Financial Statements) and the Fleet Market Value.

12.3

General undertakings

12.3.1

Authorisations The Borrowers shall promptly:

(a)

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

(b)

supply certified copies to the Agent of,

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

12.3.2

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

12.3.3

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

12.3.4

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

12.3.5

Negative pledge and no disposals No Borrower shall without the prior written consent of the Agent create nor permit to subsist any Encumbrance or other third party rights over any of its present or future assets or undertaking nor dispose of any of those assets or of all or part of that undertaking unless incurred in the normal course of business.

12.3.6

Merger No Borrower shall and shall procure that the Guarantor shall not without the prior written consent of the Agent, such consent not to be unreasonably withheld or delayed, enter into any amalgamation, demerger, merger or corporate reconstruction.

12.3.7

Change of business No Borrower shall without the prior written consent of the Agent make any substantial change to the general nature of its business from that carried on at the date of this Agreement.

12.3.8

No other business No Borrower shall without the prior written consent of the Agent engage in any business other than the ownership, operation, chartering and management of its Borrower’s Vessel.

12.3.9

No place of business in UK or US No Borrower shall have an established place of business in the United Kingdom or the United States of America at any time during the Facility Period.

12.3.10

No borrowings No Borrower shall without the prior written consent of the Agent borrow any money (except for the Loan and unsecured Financial Indebtedness subordinated to the Loan) nor incur any obligations under leases.

12.3.11

No substantial liabilities Except in the ordinary course of business, no Borrower shall without the prior written consent of the Agent incur any liability to any third party which is in the Agent’s reasonable opinion of a substantial nature.

12.3.12

No loans or other financial commitments No Borrower shall without the prior written consent of the Agent make any loan nor enter into any guarantee or indemnity or otherwise voluntarily assume any actual or contingent liability in respect of any obligation of any other person (except for inter-company loans subordinated to the Loan).

12.3.13

No dividends No Borrower shall and shall procure that the Guarantor shall not without the prior written consent of the Agent pay any dividends or make any other distributions to shareholders if a Default has occurred and the Borrowers shall not issue any new shares.

12.3.14

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

12.3.15

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

12.3.16

No acquisitions No Borrower shall acquire any further assets other than its Borrower’s Vessel and shall not acquire rights arising under contracts entered into by or on behalf of a Borrower other than in the ordinary course of its business of owning, operating and chartering its Borrower’s Vessel.

12.3.17

No change in ownership or control No Borrower shall and shall procure that the Guarantor shall not without the prior written consent of the Agent permit any change in its beneficial ownership and control from that advised to the Agent at the date of this Agreement.

12.3.18

No cross-default No Borrower shall and shall procure that the Guarantor shall not default under any Financial Indebtedness in excess of $1,000,000 in respect of a Borrower and in excess of $3,000,000 in respect of the Guarantor, including without limitation:

(a)

any non-payment of any Financial Indebtedness when due or within any originally applicable grace period; or

(b)

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

(c)

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

12.3.19

Ownership Each Borrower undertakes to remain 100% owned (directly or indirectly) by the Guarantor.

12.4

Vessel undertakings

12.4.1

No sale of a Borrower’s Vessel No Borrower shall sell or otherwise dispose of its Borrower’s Vessel or any shares in its Borrower’s Vessel nor agree to do so without the prior written consent of the Agent, such consent not to be unreasonably withheld.

12.4.2

No chartering after Event of Default Following the occurrence and during the continuation of an Event of Default no Borrower shall without the prior written consent of the Agent let its Borrower’s Vessel on charter or renew or extend any charter or other contract of employment of its Borrower’s Vessel (nor agree to do so).

12.4.3

No change in management Each Borrower shall procure that, without the prior written consent of the Agent, there shall be no termination of, alteration to, or waiver of any term of, the Management Agreement in respect of its Borrower’s Vessel and no Borrower shall without the prior written consent of the Agent permit the Managers to sub-contract or delegate the commercial or technical management of its Borrower’s Vessel to any third party.

12.4.4

Registration of each Borrower’s Vessel Each Borrower undertakes to maintain the registration of its Borrower’s Vessel under the flag of Hong Kong for the duration of the Facility Period unless the Agent agrees otherwise in writing.

12.4.5

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

12.4.6

ISM Code compliance Each Borrower will:

(a)

procure that its Borrower’s Vessel remains for the duration of the Facility Period subject to a SMS;

(b)

maintain a valid and current SMC for its Borrower’s Vessel throughout the Facility Period and provide a copy to the Agent;

(c)

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

(d)

immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of its Borrower’s Vessel or of the DOC of the ISM Company.

12.4.7

ISPS Code compliance Each Borrower will:

(a)

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

(b)

maintain a valid and current ISSC for its Borrower’s Vessel throughout the Facility Period and provide a copy to the Agent; and

(c)

immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC of its Borrower’s Vessel.

12.4.8

Annex VI compliance Each Borrower will:

(a)

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

(b)

maintain a valid and current IAPPC for its Borrower’s Vessel throughout the Facility Period and provide a copy to the Agent; and

(c)

immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC of its Borrower’s Vessel.

12.4.9

Chartering Each Borrower shall procure that its Borrower’s Vessel is employed under an Initial Charter and in the event of its Borrower’s Vessel being employed under a Charter, the Agent shall be furnished forthwith with (a) details of the new employment and (b) a notice of assignment addressed to the Charterer and endorsed with an acknowledgement of receipt by the Charterer, each in form and substance satisfactory to the Agent.

12.4.10

No change in class Each Borrower shall class its Borrower’s Vessel with an IACS classification society acceptable to the Agent and shall maintain such classification free of all overdue recommendations and qualification for the duration of the Facility Period unless otherwise agreed by the Agent in writing and shall not change such classification society without the prior written consent of the Agent.

12.4.11

Inspection of a Borrower’s Vessel Each Borrower will permit the physical inspection of its Borrower’s Vessel by the Agent or its nominee at any time during the Facility Period, upon the Agent’s request for one or more technical survey reports of its Borrower’s Vessel by surveyors appointed by the Agent at the expense of the Borrowers, provided that the Agent gives reasonable notice to the Borrowers prior to each intended physical inspection and that such inspection does not interfere with that Borrower’s Vessel’s day to day operation and employment and that such technical survey reports are limited to maximum of two (2) per calendar year.

13	Events of Default

13.1

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

13.1.1

Non-payment The Borrowers do not pay on the due date any amount payable by them under a Finance Document at the place at and in the currency in which it is expressed to be payable unless payment is made within one (1) Business Day of its due date.

13.1.2

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

No Event of Default under this Clause 13.1.2 will occur if the failure to comply is capable of remedy and does not relate to compliance with Clause 10.13 (Additional security) and is remedied within ten (10) Business Days of the Agent giving notice to the Borrowers or the Borrowers becoming aware of the failure to comply.

13.1.3

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

13.1.4

Cross default Any Financial Indebtedness of a Borrower in excess of $1,000,000 or of the Guarantor in excess of $3,000,000:

(a)

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

(b)

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

(c)

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

No Event of Default under this Clause 13.1.4 will occur if the failure to comply is capable of remedy and is remedied within three (3) Business Day of the Agent giving notice to the Borrowers or the Borrowers becoming aware of the failure to comply with this Clause 13.1.4.

13.1.5

Insolvency

(a)

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

(b)

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

(c)

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

13.1.6

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

(a)

the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of a Security Party;

(b)

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

(c)

the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of any Security Party or any of its assets; or

(d)

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

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

13.1.7

Creditors’ process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party.

13.1.8

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

13.1.9

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

13.1.10

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

13.1.11

Conditions subsequent Any of the conditions referred to in Clause 3.4 (Conditions subsequent) is not satisfied within the time reasonably required by the Agent.

13.1.12

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

13.1.13

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

13.1.14

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

13.1.15

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

(a)

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

(b)

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

(c)

payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within one hundred and eighty (180) days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree.

13.1.16

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

13.1.17

War The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.

13.1.18

Notice of termination The Guarantor or the Collateral Owner gives notice to the Security Agent to determine its obligations under the Guarantee or the Collateral Guarantee respectively.

13.1.19

Termination of Initial Charter The Initial Charter, in respect of each of the Borrowers’ Vessels, is terminated, cancelled, repudiated or revoked.

13.1.20

Change of management There is a change of a Vessel’s Managers without the prior written consent of the Agent.

13.1.21

Material adverse change Any event or series of events occurs which, in the reasonable opinion of the Agent, has a materially adverse effect on the business, assets, financial condition or credit worthiness of a Security Party.

13.1.22

Default under the Zeus Loan Agreement Any Event of Default (as such term is defined in the Zeus Loan Agreement) occurs.

13.2

Acceleration If an Event of Default is continuing the Agent may by notice to the Borrowers cancel any part of the Maximum Loan Amount not then advanced and:

13.2.1

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

13.2.2

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

14	Assignment and Sub-Participation

14.1

Lenders’ rights A Lender may assign any of its rights under this Agreement or transfer by novation any of its rights and obligations under this Agreement to any other branch of that Lender or to any other bank or financial institution or (for the purpose of a securitisation of that Lender’s rights or obligations under the Finance Documents or a similar transaction of broadly equivalent economic effect) to any special purpose vehicle, and may grant sub-participations in all or any part of its Commitment.

14.2

Borrowers’ co-operation The Borrowers will co-operate fully with a Lender in connection with any assignment, transfer or sub-participation by that Lender; will execute and procure the execution of such documents as that Lender may require in that connection; and irrevocably authorise any Finance Party to disclose to any proposed assignee, transferee or sub-participant (whether before or after any

assignment, transfer or sub-participation and whether or not any assignment, transfer or sub-participation shall take place) all information relating to the Security Parties, the Loan, the Relevant Documents and the Borrowers’ Vessels which any Finance Party may in its discretion consider necessary or desirable.

14.3

Rights of assignee or transferee Any assignee or transferee of a Lender shall (unless limited by the express terms of the assignment or novation) take the full benefit of every provision of the Finance Documents benefitting that Lender PROVIDED THAT an assignment will only be effective on notification by the Agent to that Lender and the assignee that the Agent is satisfied it has complied with all necessary “Know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to the assignee.

14.4

Transfer Certificates If a Lender wishes to transfer any of its rights and obligations under or pursuant to this Agreement, it may do so following consultation with the Borrowers as to the person of the transferee, by delivering to the Agent a duly completed Transfer Certificate, in which event on the Transfer Date:

14.4.1

to the extent that that Lender seeks to transfer its rights and obligations, the Borrowers (on the one hand) and that Lender (on the other) shall be released from all further obligations towards the other;

14.4.2

the Borrowers (on the one hand) and the transferee (on the other) shall assume obligations towards the other identical to those released pursuant to Clause 14.4.1; and

14.4.3

the Agent, each of the Lenders and the transferee shall have the same rights and obligations between themselves as they would have had if the transferee had been an original party to this Agreement as a Lender

PROVIDED THAT the Agent shall only be obliged to execute a Transfer Certificate once:

(a)

it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to the transferee; and

(b)

the transferee has paid to the Agent for its own account a transfer fee of one thousand five hundred Dollars ($1,500).

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrowers a copy of that Transfer Certificate.

14.5

Finance Documents Unless otherwise expressly provided in any Finance Document or otherwise expressly agreed between a Lender and any proposed transferee and notified by that Lender to the Agent on or before the relevant Transfer Date, there shall automatically be assigned to the transferee with any transfer of a Lender’s rights and obligations under or pursuant to this Agreement the rights of that Lender under or pursuant to the Finance Documents (other than this Agreement) which relate to the portion of that Lender’s rights and obligations transferred by the relevant Transfer Certificate.

14.6

No assignment or transfer by the Borrowers No Borrower may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

14.7

Securitisation A Lender may disclose the size and term of the Loan and the name of each of the Security Parties to any investor or potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of that Lender’s rights or obligations under the Finance Documents.

15	The Agent, the Security Agent and the Lenders

15.1

Appointment

15.1.1

Each Lender appoints the Agent to act as its agent under and in connection with the Finance Documents and each Lender and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.

15.1.2

Each Lender authorises the Agent and each Lender and the Agent authorises the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

15.1.3

Except where the context otherwise requires, references in this Clause 15 to the “Agent” shall mean the Agent and the Security Agent individually and collectively.

15.2

Authority Each Lender irrevocably authorises the Agent (subject to Clauses 15.4 (Limitations on authority) and 15.18 (Instructions)):

15.2.1

to execute any Finance Document (other than this Agreement) on its behalf;

15.2.2

to collect, receive, release or pay any money on its behalf;

15.2.3

acting on the instructions from time to time of the Majority Lenders to give or withhold any waivers, consents or approvals under or pursuant to any Finance Document; and

15.2.4

acting on the instructions from time to time of the Majority Lenders to exercise, or refrain from exercising, any rights, powers, authorities or discretions under or pursuant to any Finance Document.

The Agent shall have no duties or responsibilities as agent or as security agent other than those expressly conferred on it by the Finance Documents and shall not be obliged to act on any instructions from the Lenders or the Majority Lenders if to do so would, in the opinion of the Agent, be contrary to any provision of the Finance Documents or to any law, or would expose the Agent to any actual or potential liability to any third party.

15.3

Trust The Security Agent agrees and declares, and each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 15.3, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely. Each of the other Finance Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 15.3. The Security Agent shall have the benefit of all of the provisions of this Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the Trustee ▇▇▇ ▇▇▇▇ (to the extent not inconsistent with this Agreement). In addition:

15.3.1

the Security Agent and any attorney, agent or delegate of the Security Agent may indemnify itself or himself out of the Trust Property against all

liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any other such person by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;

15.3.2

the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance; and

15.3.3

the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement.

The provisions of Part I of the Trustee Act 2000 shall not apply to the Security Agent or the Trust Property.

15.4

Limitations on authority Except with the prior written consent of all the Lenders, the Agent shall not be entitled to:

15.4.1

release or vary any security given for the Borrowers’ obligations under this Agreement; nor

15.4.2

waive the payment of any sum of money payable by any Security Party under the Finance Documents; nor

15.4.3

reduce the Margin; nor

15.4.4

change the meaning of the expression “Majority Lenders”; nor

15.4.5

exercise, or refrain from exercising, any right, power, authority or discretion, or give or withhold any consent, the exercise or giving of which is, by the terms of this Agreement, expressly reserved to the Lenders; nor

15.4.6

extend the due date for the payment of any sum of money payable by any Security Party under any Finance Document; nor

15.4.7

take or refrain from taking any step if the effect of such action or inaction may lead to the increase of the obligations of a Lender under any Finance Document; nor

15.4.8

agree to change the currency in which any sum is payable under any Finance Document (other than in accordance with the terms of the relevant Finance Document); nor

15.4.9

agree to amend this Clause 15.4.

15.5

Liability Neither the Agent nor any of its directors, officers, employees or agents shall be liable to the Lenders for anything done or omitted to be done by the Agent under or in connection with any of the Relevant Documents unless as a result of the Agent’s gross negligence or wilful misconduct.

15.6

Acknowledgement Each Lender acknowledges that:

15.6.1

it has not relied on any representation made by the Agent or any of the Agent’s directors, officers, employees or agents or by any other person acting or purporting to act on behalf of the Agent to induce it to enter into any Finance Document;

15.6.2

it has made and will continue to make without reliance on the Agent, and based on such documents and other evidence as it considers appropriate, its own independent investigation of the financial condition and affairs of the Security Parties in connection with the making and continuation of the Loan;

15.6.3

it has made its own appraisal of the creditworthiness of the Security Parties; and

15.6.4

the Agent shall not have any duty or responsibility at any time to provide it with any credit or other information relating to any Security Party unless that information is received by the Agent pursuant to the express terms of a Finance Document.

Each Lender agrees that it will not assert nor seek to assert against any director, officer, employee or agent of the Agent or against any other person acting or purporting to act on behalf of the Agent any claim which it might have against them in respect of any of the matters referred to in this Clause 15.6.

15.7

Limitations on responsibility The Agent shall have no responsibility to any Security Party or to any Lender on account of:

15.7.1

the failure of a Lender or of any Security Party to perform any of its obligations under a Finance Document; nor

15.7.2

the financial condition of any Security Party; nor

15.7.3

the completeness or accuracy of any statements, representations or warranties made in or pursuant to any Finance Document, or in or pursuant to any document delivered pursuant to or in connection with any Finance Document; nor

15.7.4

the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of any Finance Document or of any document executed or delivered pursuant to or in connection with any Finance Document.

15.8

The Agent’s rights The Agent may:

15.8.1

assume that all representations or warranties made or deemed repeated by any Security Party in or pursuant to any Finance Document are true and complete, unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary;

15.8.2

assume that no Default has occurred unless, in its capacity as the Agent, it has acquired actual knowledge to the contrary;

15.8.3

rely on any document or notice believed by it to be genuine;

15.8.4

rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it;

15.8.5

rely as to any factual matters which might reasonably be expected to be within the knowledge of any Security Party on a certificate signed by or on behalf of that Security Party; and

15.8.6

refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Majority Lenders) and unless and until the Agent has received from the Lenders any payment which the Agent may require on account of, or any security which the Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.

15.9

The Agent’s duties The Agent shall:

15.9.1

if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of any Finance Document by any Security Party or as to the existence of an Event of Default; and

15.9.2

inform the Lenders promptly of any Event of Default of which the Agent has actual knowledge.

15.10

No deemed knowledge The Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by any Security Party or actual knowledge of the occurrence of any Default unless a Lender or a Security Party shall have given written notice thereof to the Agent in its capacity as the Agent. Any information acquired by the Agent other than specifically in its capacity as the Agent shall not be deemed to be information acquired by the Agent in its capacity as the Agent.

15.11

Other business The Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with a Security Party or with a Security Party’s subsidiaries or associated companies or with a Lender as if it were not the Agent.

15.12

Indemnity The Lenders shall, promptly on the Agent’s request, reimburse the Agent in their respective Proportionate Shares, for, and keep the Agent fully indemnified in

respect of all liabilities, damages, costs and claims sustained or incurred by the Agent in connection with the Finance Documents, or the performance of its duties and obligations, or the exercise of its rights, powers, discretions or remedies under or pursuant to any Finance Document, to the extent not paid by the Security Parties and not arising solely from the Agent’s gross negligence or wilful misconduct.

15.13

Employment of agents In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to the Finance Documents, the Agent shall be entitled to employ and pay agents to do anything which the Agent is empowered to do under or pursuant to the Finance Documents (including the receipt of money and documents and the payment of money) and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by the Agent in good faith to be competent to give such opinion, advice or information.

15.14

Distribution of payments The Agent shall pay promptly to the order of each Lender that Lender’s Proportionate Share of every sum of money received by the Agent pursuant to the Finance Documents (with the exception of any amounts payable pursuant to Clause 9 (Fees) and/or any Fee Letter and any amounts which, by the terms of the Finance Documents, are paid to the Agent for the account of the Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Agent on trust absolutely for that Lender.

15.15

Reimbursement The Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum. If, however, the Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Clause 15.14 (Distribution of payments) before it has itself received payment of that amount, that Lender will, on demand by the Agent, refund to the Agent an amount equal to the sum so paid, together with an amount sufficient to reimburse the Agent for any interest which the Agent may certify that it has been required to pay on money borrowed to fund the sum in question during the period beginning on the date of payment and ending on the date on which the Agent receives reimbursement.

15.16

Redistribution of payments Unless otherwise agreed between the Lenders and the Agent, if at any time a Lender receives or recovers by way of set-off, the exercise of any lien or otherwise from any Security Party, an amount greater than that Lender’s Proportionate Share of any sum due from that Security Party to the Lenders under the

Finance Documents (the amount of the excess being referred to in this Clause 15.16 and in Clause 15.17 (Rescission of Excess Amount) as the “Excess Amount”) then:

15.16.1

that Lender shall promptly notify the Agent (which shall promptly notify each other Lender);

15.16.2

that Lender shall pay to the Agent an amount equal to the Excess Amount within ten (10) days of its receipt or recovery of the Excess Amount; and

15.16.3

the Agent shall treat that payment as if it were a payment by the Security Party in question on account of the sum due from that Security Party to the Lenders and shall account to the Lenders in respect of the Excess Amount in accordance with the provisions of this Clause 15.16.

However, if a Lender has commenced any legal proceedings to recover sums owing to it under the Finance Documents and, as a result of, or in connection with, those proceedings has received an Excess Amount, the Agent shall not distribute any of that Excess Amount to any other Lender which had been notified of the proceedings and had the legal right to, but did not, join those proceedings or commence and diligently prosecute separate proceedings to enforce its rights in the same or another court.

15.17

Rescission of Excess Amount If all or any part of any Excess Amount is rescinded or must otherwise be restored to any Security Party or to any other third party, the Lenders which have received any part of that Excess Amount by way of distribution from the Agent pursuant to Clause 15.16 (Redistribution of payments) shall repay to the Agent for the account of the Lender which originally received or recovered the Excess Amount, the amount which shall be necessary to ensure that the Lenders share rateably in accordance with their Proportionate Shares in the amount of the receipt or payment retained, together with interest on that amount at a rate equivalent to that (if any) paid by the Lender receiving or recovering the Excess Amount to the person to whom that Lender is liable to make payment in respect of such amount, and Clause 15.16.3 (Redistribution of payments) shall apply only to the retained amount.

15.18

Instructions Where the Agent is authorised or directed to act or refrain from acting in accordance with the instructions of the Lenders each of the Lenders shall provide the Agent with instructions within three (3) Business Days of the Agent’s request

(which request may be made orally or in writing). If a Lender does not provide the Agent with instructions within that period, that Lender shall be bound by the decision of the Agent. Nothing in this Clause 15.18 shall limit the right of the Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders if the Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with the Finance Documents. In that event, the Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Agent pursuant to this Clause 15.18.

15.19

Payments All amounts payable to a Lender under this Clause 15 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Agent.

15.20

“Know your customer” checks Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

15.21

Resignation Subject to a successor being appointed in accordance with this Clause 15.21, the Agent may resign as agent and/or security agent at any time without assigning any reason by giving to the Borrowers and the Lenders notice of its intention to do so, in which event the following shall apply:

15.21.1

the Lenders may within thirty (30) days after the date of the Agent’s notice appoint a successor to act as agent and/or security agent or, if they fail to do so, the Agent may appoint any other bank or financial institution as its successor;

15.21.2

the resignation of the Agent shall take effect simultaneously with the appointment of its successor on written notice of that appointment being given to the Borrowers and the Lenders;

15.21.3

the Agent shall thereupon be discharged from all further obligations as agent and/or security agent but shall remain entitled to the benefit of the provisions of this Clause 15; and

15.21.4

the Agent’s successor and each of the other parties to this Agreement shall have the same rights and obligations amongst themselves as they would have had if that successor had been a party to this Agreement.

15.22

No fiduciary relationship Except as provided in Clauses 15.3 (Trust) and 15.14 (Distribution of payments), the Agent shall not have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in any Finance Document shall constitute a partnership between any two or more Lenders or between the Agent and any other person.

16	Set-Off

A Finance Party may set off any matured obligation due from the Borrowers under any Finance Document (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to any Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, that Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

17	Payments

17.1

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

17.2

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

17.3

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

17.4

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

17.5

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

17.6

Control account The Agent shall open and maintain on its books a control account in the names of the Borrowers showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrowers’ obligations to repay the Loan and to pay interest and all other sums due

under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 17.6 and those entries will, in the absence of manifest error, be conclusive and binding.

17.7

Clawback The Agent shall have no liability to pay any sum to the Borrowers until it has itself received payment of that sum. If, however, the Agent does pay any sum to the Borrowers on account of any amount prospectively due to the Borrowers pursuant to Clause 4 (Advance) before it has itself received payment of that amount, the Borrowers will, on demand in writing by the Agent, refund to the Agent an amount equal to the sum so paid (the “Advance Payment”), together with an amount sufficient to reimburse the Agent for any interest which the Agent may certify that it has been required to pay on money borrowed to fund the sum in question during the period beginning on the date of payment and ending on the date on which the Agent receives reimbursement, provided always that no such refund will be made by the Borrowers (i) if the Agent fails to make its demand hereunder within thirty (30) days from the date of the Advance Payment or (ii) in case such Agent’s demand is made after the repayment of the Loan by the Borrowers.

18	Notices

18.1

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

18.2

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

18.2.1

in the case of the Borrowers, ▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ (fax no: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇) marked for the attention of Legal Department;

18.2.2

in the case of each Lender, those appearing opposite its name in Schedule 1 (The Lenders and the Commitments);

18.2.3

in the case of the Agent, ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (fax no: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ) marked for the attention of Loans Administration; and

18.2.4

in the case of the Security Agent, ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (fax no: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ) marked for the attention of Loans Administration;

or any substitute address, fax number, department or officer as any party may notify to the Agent (or the Agent may notify to the other parties, if a change is made by the Agent) by not less than five (5) Business Days’ notice.

18.3

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

18.3.1

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

18.3.2

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

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

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

All notices from or to the Borrowers shall be sent through the Agent.

18.4

Notification of address and fax number Promptly upon receipt of notification of an address, fax number or change of address, pursuant to Clause 18.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other parties to this Agreement.

18.5

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

18.5.1

in English; or

18.5.2

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

19	Partial Invalidity

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

20	Remedies and Waivers

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

21	Joint and several liability

21.1

Nature of liability The representations, warranties, covenants, obligations and undertakings of the Borrowers contained in this Agreement shall be joint and several so that each Borrower shall be jointly and severally liable with all the Borrowers for all of the same and such liability shall not in any way be discharged, impaired or otherwise affected by:

21.1.1

any forbearance (whether as to payment or otherwise) or any time or other indulgence granted to any other Borrower or any other Security Party under or in connection with any Finance Document;

21.1.2

any amendment, variation, novation or replacement of any other Finance Document;

21.1.3

any failure of any Finance Document to be legal valid binding and enforceable in relation to any other Borrower or any other Security Party for any reason;

21.1.4

the winding-up or dissolution of any other Borrower or any other Security Party;

21.1.5

the release (whether in whole or in part) of, or the entering into of any compromise or composition with, any other Borrower or any other Security Party; or

21.1.6

any other act, omission, thing or circumstance which would or might, but for this provision, operate to discharge, impair or otherwise affect such liability.

21.2

No rights as surety Until the Indebtedness has been unconditionally and irrevocably paid and discharged in full, each Borrower agrees that it shall not, by virtue of any payment made under this Agreement on account of the Indebtedness or by virtue of any enforcement by a Finance Party of its rights under this Agreement or by virtue of any relationship between, or transaction involving, the relevant Borrower and any other Borrower or any other Security Party:

21.2.1

exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by a Finance Party or any other person; or

21.2.2

exercise any right of contribution from any other Borrower or any other Security Party under any Finance Document; or

21.2.3

exercise any right of set-off or counterclaim against any other Borrower or any other Security Party; or

21.2.4

receive, claim or have the benefit of any payment, distribution, security or indemnity from any other Borrower or any other Security Party; or

21.2.5

unless so directed by the Agent (when the relevant Borrower will prove in accordance with such directions), claim as a creditor of any other Borrower or any other Security Party in competition with any Finance Party

and each Borrower shall hold in trust for the Finance Parties and forthwith pay or transfer (as appropriate) to the Agent any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.

22	Miscellaneous

22.1

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

22.2

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

22.3

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

22.4

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

22.5

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

22.6

Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce or to enjoy the benefit of any term of this Agreement.

23	Law and Jurisdiction

23.1

Governing law This Agreement and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law.

23.2

Jurisdiction For the exclusive benefit of the Finance Parties, the parties to this Agreement irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any dispute (a) arising from or in connection with this Agreement or (b) relating to any non-contractual obligations arising from or in connection with this Agreement and that any proceedings may be brought in those courts.

23.3

Alternative jurisdictions Nothing contained in this Clause 23 shall limit the right of the Finance Parties to commence any proceedings against the Borrowers in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrowers in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

23.4

Waiver of objections Each Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause 23, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction.

23.5

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

23.5.1

irrevocably appoints Messrs. ▇▇▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

23.5.2

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

24	General Terms and Conditions

The General Terms and Conditions form part of and shall be deemed to be incorporated in this Agreement save to the extent that there is an inconsistency between the terms thereof and the terms of any other provision of this Agreement, in which case the terms of that other provision shall prevail.

SCHEDULE 1: The Lenders and the Commitments


The Lenders		The Commitments

ABN AMRO BANK N.V. ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ The Netherlands		$91,371,000

SCHEDULE 2: Conditions Precedent and Subsequent

Part I: Conditions precedent

1	Security Parties

(a)

Constitutional Documents Copies of the constitutional documents of each Security Party together with such other evidence as the Agent may reasonably require that each Security Party is duly formed in its country of formation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.

(b)

Certificates of good standing A certificate of good standing in respect of each Security Party (if such a certificate can be obtained).

(c)

Board or Member resolutions A copy of a resolution of the members or the board of directors (as applicable) of each Security Party:

(i)

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

(ii)

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

(d)

Copy passports A copy of the passport of each person authorised by the resolutions referred to in paragraph (c) above.

(e)

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

(f)

Officer’s certificates A certificate of a duly authorised officer of each Security Party certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect and setting out the names of the directors or members, officers, shareholders or membership interest

holders of that Security Party and the proportion of shares or membership interest held by each shareholder or membership interest holders.

(g)

Evidence of registration Where such registration is required or permitted under the laws of the relevant jurisdiction, evidence that the names of the directors or members, officers, shareholders or membership interest holders of each Security Party are duly registered in the companies registry or other registry in the country of incorporation of that Security Party.

(h)

Powers of attorney The notarially attested and legalised power of attorney of each Security Party under which any documents are to be executed or transactions undertaken by that Security Party.

2	Security and related documents

(a)

Vessel documents Photocopies, certified as true, accurate and complete by a director or member or the secretary or the legal advisers of the Borrower or the Collateral Owner (as the context requires), of:

(i)

the MOA;

(ii)

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

(iii)

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

(iv)

any charterparty or other contract of employment of the Vessel which will be in force on the Drawdown Date including, without limitation, the Initial Charter and/or any Charter;

(v)

the Management Agreements;

(vi)

the Borrower’s Vessel’s and the Collateral Vessel’s current Safety Construction, Safety Equipment, Safety Radio, Oil Pollution Prevention and Load Line Certificates;

(vii)

evidence of the Borrower’s Vessel’s and the Collateral Vessel’s current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution ▇▇▇ ▇▇▇▇;

(viii)

the Borrower’s Vessel’s and the Collateral Vessel’s current SMC;

(ix)

the ISM Company’s current DOC;

(x)

the Borrower’s Vessel’s and the Collateral Vessel’s current ISSC;

(xi)

the Borrower’s Vessel’s and the Collateral Vessel’s current IAPPC;

(xii)

the Borrower’s Vessel’s and the Collateral Vessel’s current Tonnage Certificate;

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

(b)

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

(c)

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

(d)

Evidence of Collateral Owner’s title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag of Panama confirming that the Collateral Vessel is permanently registered under that flag in the ownership of the Collateral Owner, (b) the Collateral Mortgage has been registered with second priority against the Collateral Vessel and (c) there are no further Encumbrances registered against the Collateral Vessel, other than a first preferred mortgage under the Zeus Loan Agreement.

(e)

Evidence of insurance Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent)

the written approval of the Insurances by an insurance adviser appointed by the Agent at the Borrowers’ expense.

(f)

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

(g)

Survey report A report by a surveyor instructed by the Agent to inspect the Borrower’s Vessel confirming that the condition of the Borrower’s Vessel is in all respects acceptable to the Agent.

(h)

Valuations Two valuations of the Borrower’s Vessel addressed to the Agent from two brokers acceptable to the Lender certifying a value for the Borrower’s Vessel, assessed in such manner as the Agent may require, acceptable to the Agent.

(i)

Security Documents The Security Documents, together with all other documents required by any of them, including, without limitation, all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients.

(j)

Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Accounts, as the Agent may require.

(k)

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

3	Legal opinions

(a)

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

4	Other documents and evidence

(a)

Drawdown Notice A duly completed Drawdown Notice.

(b)

Process agent Evidence that any process agent referred to in Clause 23.5 (Service of process) and any process agent appointed under any other Finance Document has accepted its appointment.

(c)

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

(d)

Financial statements Copies of the Original Financial Statements of each Borrower.

(e)

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

(f)

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

Part II: Conditions subsequent

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

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

3	Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge given pursuant to any Security Documents received by the Agent pursuant to Part I of this Schedule 2.

4	Legal opinions Such of the legal opinions specified in Part I of this Schedule 2 as have not already been provided to the Agent.

5	Master’s receipt The master’s receipt for the Collateral Mortgage.

SCHEDULE 3: Calculation of Mandatory Cost

The Mandatory Cost is an addition to the interest rate to compensate the Lenders 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.

On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Loan) and will be expressed as a percentage rate per annum.

The Additional Cost Rate for any Lender lending from an office in the euro-zone will be the percentage notified by that Lender to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in the relevant Tranche) of complying with the minimum reserve requirements of the European Central Bank as a result of participating in the relevant Tranche from that office.

4	The Additional Cost Rate for any Lender lending from an office in the United Kingdom will be calculated by the Agent as follows:

(a)

where the relevant Tranche is denominated in sterling:

BY + S(Y - Z) + F x 0.01 per cent per annum

100 - (B + S)

(b)

where the relevant Tranche is denominated in any currency other than sterling:

F x 0.01 per cent per annum

300

where:

is the percentage of eligible liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements;

is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the relevant Tranche is an overdue amount, the additional rate of interest specified in Clause 7.9 (Default interest)) payable for the relevant Interest Period on the relevant Tranche;

is the percentage (if any) of eligible liabilities which that Lender is required from time to time to maintain as interest bearing special deposits with the Bank of England;

is the interest rate per annum payable by the Bank of England to that Lender on special deposits; and

is the charge payable by that Lender to the Financial Services Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or the equivalent provisions in any replacement regulations (with, for this purpose, the figure for the minimum amount in paragraph 2.02b or such equivalent provision deemed to be zero), expressed in pounds per £1 million of the fee base of that Lender.

5	For the purpose of this Schedule:

(a)

“eligible liabilities” and “special deposits” have the meanings given to them at the time of application of the formula by the Bank of England;

(b)

“fee base” has the meaning given to it in the Fees Regulations;

(c)

“Fees Regulations” means the regulations governing periodic fees contained in the Financial Services Authority Fees 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.

6	In the application of the formula B, Y, S and Z are included in the formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is calculated as 0.5. x 15. Each rate calculated in accordance with the formula is, if necessary, rounded upward to four decimal places.

7	If a Lender does not supply the information required by the Agent to determine its Additional Cost Rate when requested to do so, the applicable Mandatory Cost shall be determined on the basis of the information supplied by the remaining Lenders.

If a change in circumstances has rendered, or will render, the formula inappropriate, the Agent shall notify the Borrowers of the manner in which the Mandatory Cost will subsequently be calculated. The manner of calculation so notified by the Agent shall, in the absence of manifest error, be binding on the Borrowers.

SCHEDULE 4: Form of Drawdown Notice

To:	ABN AMRO BANK N.V.

From:

PLATON MARINE LLC

REA MARINE LLC

KRONOS MARINE LLC

SOCRATES MARINE LLC

[Date]

Dear Sirs

Drawdown Notice

We refer to the Loan Agreement dated 2011 made between, amongst others, ourselves and yourselves (the “Agreement”).

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

Pursuant to Clause 4.1 of the Agreement, we irrevocably request that you advance a Tranche in the sum of [ ] to us on 2011, which is a Business Day, by paying the amount of the Tranche in accordance with the MOA in respect of the Vessel named [ ].

We warrant that the representations and warranties contained in Clause 11.1 of the Agreement are true and correct at the date of this Drawdown Notice and will be true and correct on 2011, that no Default has occurred and is continuing, and that no Default will result from the advance of the Tranche requested in this Drawdown Notice.

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

Yours faithfully

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

For and on behalf of

PLATON MARINE LLC

REA MARINE LLC

KRONOS MARINE LLC

SOCRATES MARINE LLC

SCHEDULE 5: Form of Transfer Certificate

To:	ABN AMRO BANK N.V.

TRANSFER CERTIFICATE

This transfer certificate relates to a secured loan facility agreement (as from time to time amended, varied, supplemented or novated the “Loan Agreement”) dated 29 November 2011, on the terms and subject to the conditions of which a secured loan facility of up to $91,371,000 was made available to Platon Marine LLC, Rea Marine LLC, Kronos Marine LLC and Socrates Marine LLC on a joint and several basis by a syndicate of banks on whose behalf you act as agent and security agent.

1	Terms defined in the Loan Agreement shall, unless otherwise expressly indicated, have the same meaning when used in this certificate. The terms “Transferor” and “Transferee” are defined in the schedule to this certificate.

2	The Transferor:

2.1

confirms that the details in the Schedule under the heading “Transferor’s Commitment” accurately summarise its Commitment; and

2.2

requests the Transferee to accept by way of novation the transfer to the Transferee of the amount of the Transferor’s Commitment specified in the Schedule by counter-signing and delivering this certificate to the Agent at its address for communications specified in the Loan Agreement.

3	The Transferee requests the Agent to accept this certificate as being delivered to the Agent pursuant to and for the purposes of clause 14.4 of the Loan Agreement so as to take effect in accordance with the terms of that clause on the Transfer Date specified in the Schedule.

4	The Agent confirms its acceptance of this certificate for the purposes of clause 14.4 of the Loan Agreement.

5	The Transferee confirms that:

5.1

it has received a copy of the Loan Agreement together with all other information which it has required in connection with this transaction;

5.2

it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such information; and

5.3

it has not relied and will not in the future rely on the Transferor or any other party to the Loan Agreement to keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of any Security Party.

Execution of this certificate by the Transferee constitutes its representation and warranty to the Transferor and to all other parties to the Loan Agreement that it has the power to become a party to the Loan Agreement as a Lender on the terms of the Loan Agreement and has taken all steps to authorise execution and delivery of this certificate.

The Transferee undertakes with the Transferor and each of the other parties to the Loan Agreement that it will perform in accordance with their terms all those obligations which by the terms of the Loan Agreement will be assumed by it after delivery of this certificate to the Agent and the satisfaction of any conditions subject to which this certificate is expressed to take effect.

The Transferor makes no representation or warranty and assumes no responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any document relating to any Finance Document, and assumes no responsibility for the financial condition of any Finance Party or for the performance and observance by any Security Party of any of its obligations under any Finance Document or any document relating to any Finance Document and any conditions and warranties implied by law are expressly excluded.

9	The Transferee acknowledges that nothing in this certificate or in the Loan Agreement shall oblige the Transferor to:

9.1

accept a re-transfer from the Transferee of the whole or any part of the rights, benefits and/or obligations transferred pursuant to this certificate; or

9.2

support any losses directly or indirectly sustained or incurred by the Transferee for any reason including, without limitation, the non-performance by any party to any Finance Document of any obligations under any Finance Document.

10	The address and fax number of the Transferee for the purposes of clause 18 of the Loan Agreement are set out in the Schedule.

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

12	This certificate and any non-contractual obligations arising out of or in connection with it shall be governed by and interpreted in accordance with English law.

THE SCHEDULE

1	*Transferor*:

2	*Transferee*:

3	*Transfer Date* (not earlier than the fifth Business Day after the date of delivery of the Transfer Certificate to the Agent):

4	*Transferor’s Commitment*:

5	*Amount transferred*:

6	*Transferee’s address and fax number for the purposes of clause 18 of the Loan Agreement*:


*[name of Transferor]*		*[name of Transferee]*

By:		By:

Date:		Date:


ABN AMRO BANK N.V. as Agent

By:

Date:

SCHEDULE 6: Form of Compliance Certificate

To:	ABN AMRO BANK N.V.

From:

PLATON MARINE LLC

REA MARINE LLC

KRONOS MARINE LLC

SOCRATES MARINE LLC

Dated:

Dear Sirs

Platon Marine LLC, Rea Marine LLC, Kronos Marine LLC and Socrates Marine LLC – US$91,371,000 Loan Agreement dated 29* November 2011 (the “Agreement”)

We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

We confirm that:

The aggregate of the Market Value of the Borrowers’ Vessels and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent in its discretion (in all other cases)) for the time being provided to the Security Agent under clause 10.13 of the Agreement is equal to [ ] per cent ([ ]%) of the amount of the Loan currently outstanding.

2.	The Guarantor maintains Leverage equal to [ ] per cent ([ ]%).

3.	The average quarterly cash balance in the accounts #[ ] and #[ ] is $[.....] (>500k per Borrower’s Vessel).

4.	The Guarantor maintains a Net Worth equal to [ ] million Dollars ($[ ]).

5.	No Default is continuing.


Signed:	..................	..................

	Director	Director

	of	Of

	Platon Marine LLC	Rea Marine LLC

Signed:	..................	..................

	Director	Director

	of	Of

	Kronos Marine LLC	Socrates Marine LLC


Signed:		..................

		Director

		of

		Poseidon Containers Holdings LLC

SCHEDULE 7: General Terms and Conditions

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


SIGNED by Filanthi Katsafadou		)
/s/ Filanthi Katsafadou		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
PLATON MARINE LLC		)
in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by Filanthi Katsafadou		)
/s/ Filanthi Katsafadou		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
REA MARINE LLC		)
in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by Filanthi Katsafadou		)
/s/ Filanthi Katsafadou		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
KRONOS MARINE LLC		)


in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by Filanthi Katsafadou		)
/s/ Filanthi Katsafadou		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
SOCRATES MARINE LLC in the presence of:		) )

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
/s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
ABN AMRO BANK N.V.		)
(as a Lender)		)
in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
/s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
ABN AMRO BANK N.V.		)
(as the Agent)		)
in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇


SIGNED by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
/s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇		)
as duly authorised		)
attorney-in-fact		)
for and on behalf of		)
ABN AMRO BANK N.V.		)
(as the Security Agent)		)
in the presence of:		)

/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇

Solicitor

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇▇

▇▇

DATED 29 November 2011 PLATON MARINE LLC REA MARINE LLC KRONOS MARINE LLC SOCRATES MARINE LLC (as Borrowers) - and - ABN AMRO BANK N.V. and others (as Lenders) - and - ABN AMRO BANK N.V. (as Agent) - and – ABN AMRO BANK N.V. (as Security Agent)...

Document Metadata

Document Metadata

Table of Contents