DATED 1 JUNE 2006 AS AMENDED AND RESTATED BY A FIRST SUPPLEMENTAL AGREEMENT

Letter of Credit

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DnB NOR Bank | GULFMARK OFFSHORE, INC

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Title: DATED 1 JUNE 2006 AS AMENDED AND RESTATED BY A FIRST SUPPLEMENTAL AGREEMENT
Governing Law: Delaware Date: 7/31/2008
Industry: Oil Well Services and Equipment Sector: Energy

DATED 1 JUNE 2006 AS AMENDED AND RESTATED
BY A FIRST SUPPLEMENTAL AGREEMENT, Parties: dnb nor bank , gulfmark offshore inc

Exhibit 10.24

DATED 1 JUNE 2006 AS AMENDED AND RESTATED
BY A FIRST SUPPLEMENTAL AGREEMENT
DATED JUNE 5, 2008

GULFMARK OFFSHORE, INC.
(as borrower)

— and —

DnB NOR Bank ASA
and others
(as banks)

— and —

DnB NOR Bank ASA
(as mandated lead arranger)

— and —

DnB NOR Bank ASA
(as Issuer)

— and —

DnB NOR Bank ASA
(as agent and security trustee)

US$25,000,000 SECURED
REDUCING REVOLVING LOAN
AND LETTER OF CREDIT
FACILITY AGREEMENT

STEPHENSON HARWOOD
One, St. Paul’s Churchyard
London EC4M 8SH
Tel: 020 7329 4422
Fax: 020 7329 7100
Ref: 1313/01-46-02912

CONTENTS


		Page

1	Definitions and Interpretation		1

2	The Facility and LCs and their Purpose		24

3	Conditions Precedent and Subsequent		32

4	Representations and Warranties		36

5	Repayment, Prepayment and Currency Option		41

6	Interest		45

7	Fees		46

8	Security Documents		47

9	Agency and Trust		47

10	Covenants		57

11	Earnings		64

12	Events Of Default		64

13	Set-Off and Lien		69

14	Assignment and Sub-Participation		70

15	Payments, Mandatory Prepayment, Reserve Requirements and Illegality		72

16	Communications		77

17	General Indemnities		78

18	Miscellaneous		80

19	Law and Jurisdiction		84

SCHEDULE 1			86
The Banks, the Commitments and the Proportionate Shares			86


	Page

SCHEDULE 2		87

The Vessels		87

SCHEDULE 3		88
Form of Transfer Certificate		88

SCHEDULE 4		91
Form of Drawdown Notice		91

SCHEDULE 5		93
Calculation of the Mandatory Cost		93

SCHEDULE 6		96
Form of Compliance Certificate		96

SCHEDULE 7		98
Form of Issue Request		98

LOAN FACILITY AGREEMENT DATED 1 JUNE 2006 AS AMENDED AND RESTATED BY A FIRST SUPPLEMENTAL AGREEMENT

Dated: 2008

BETWEEN:-

(1)		GULFMARK OFFSHORE, INC. , a company incorporated according to the law of the State of Delaware whose principal place of business is at 10111 Richmond Avenue, Suite 340, Houston, Texas, 77042, the United States of America (the “ Borrower ”); and

(2)		the banks and financial institutions listed in Schedule 1, each acting through its office at the address indicated against its name in Schedule 1 (together “ the Banks ” and each a “ Bank ”); and

(3)		DnB NOR Bank ASA acting as mandated lead arranger (in that capacity the “ MLA ”); and

(4)		DnB NOR Bank ASA acting as issuer of the Letters of Credit (in that capacity the “ Issuer ”); and

(5)		DnB NOR Bank ASA acting as agent and security trustee through its office at Lars Hillesgate 30, PO Box 7100, NO-5020 Bergen, Norway (in that capacity the “ Agent ”).

WHEREAS:-

Each of the Banks has agreed to advance to the Borrower its respective Commitment of an aggregate principal amount not exceeding twenty five million Dollars ($25,000,000) to assist the Borrower in refinancing the Existing Facility, and thereafter for the general corporate purposes of the Group, and the Issuer has agreed to issue the Letters of Credit at the request of the Borrower for and on behalf of the Borrower, for certain obligations of the Borrower on the terms and conditions herein set forth.

IT IS AGREED as follows:-

Definitions and Interpretation

	1.1		Definitions

			In this Agreement:-

	1.1.1		“ Accounts ” means the consolidated financial accounts of the Borrower to be provided to the Agent pursuant hereto.

	1.1.2		“ Address for Service ” means c/o Gulf Offshore N.S. Limited of 95 Aldwych, London WC2B 4JF, England or, in relation to any of the Security Parties, such other address in England and Wales as that Security Party may from time to time designate by no fewer than ten (10) Business Days’ written notice to the Agent.

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

	1.1.4		“ Advance Date ”, in relation to any Drawing, means the date on which that Drawing is advanced by the Banks to the Borrower pursuant to Clause 2.

	1.1.5		“ Agent’s Spot Rate of Exchange ” means the Agent’s spot rate of exchange for the purchase of the relevant currency with the Base Currency in the London foreign exchange market at or about 11.00 a.m. on a particular day.

	1.1.6		“ Approved Brokers ” means H. Clarkson & Co. Ltd, Simpson Spence & Young Shipbrokers Ltd, Fearnley AS, R. S. Platou AS and Seabrokers Group.

	1.1.7		“ Assignments ” means the first priority assignments of the Insurances and Requisition Compensation of the Vessels to be made between the Borrower and the Agent referred to in Clause 8.1.2 (each an “ Assignment ”).

	1.1.8		“ Base Currency ” means Dollars.

	1.1.9		“ Base Currency Amount ” means the amount specified in the Drawdown Request or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent’s Spot Rate of Exchange on the date which is three (3) Business Days before the Advance Date adjusted to reflect any repayment (other than a repayment arising from a change of currency) or prepayment.

	1.1.10		“ Borrower’s Obligations ” means all of the liabilities and obligations of the Borrower to the Finance Parties under or pursuant to the Borrower’s Security Documents, whether actual or contingent, present or future, and whether incurred alone or jointly or jointly and severally with any other and in whatever currency, including (without limitation) interest, commission and all other charges and expenses.

	1.1.11		“ Borrower’s Security Documents ” means those of the Security Documents to which the Borrower is or is to be a party.

	1.1.12		“ Break Costs ” means all documented costs, losses, premiums or penalties incurred by any of the Finance Parties in the circumstances contemplated by Clause 17.4 or as a result of any of them receiving any prepayment of all or any part of the Facility (whether pursuant to Clauses 5.2 and 5.3 or otherwise) or any other payment under or in relation to the Security Documents on a day other than the due date for payment of the sum in question, and includes (without limitation) any losses or costs incurred in liquidating or re-employing deposits from third parties acquired to effect or maintain the Facility, and any liabilities, expenses or losses incurred by any of the Finance Parties in terminating or reversing, or otherwise in connection with, any interest rate and/or currency swap, transaction or arrangement entered into by any of the Finance Parties with any member of the Group 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.

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

	1.1.14		“ Commitment ” means, in relation to each Bank, the amount of the Facility which that Bank agrees to advance to the Borrower as its several liability as indicated against the name of that Bank in Schedule 1, as reduced from time to time in accordance with Clause 2.4, or, where the context permits, the amount of the Facility advanced by that Bank and remaining outstanding.

	1.1.15		“ Commitment Commission ” means the commitment commission to be paid by the Borrower to the Agent on behalf of the Banks pursuant to Clause 7.

	1.1.16		“ Commitment Termination Date ” means the date falling one month prior to the Termination Date.

	1.1.17		“ Communication ” means any notice, approval, demand, request or other communication from one party to this Agreement to any other party to this Agreement.

	1.1.18		“ Communications Address ” means 10111 Richmond Avenue, Suite 340, Houston, Texas, 77042, the United States of America (fax no: +1 713 963 0541 marked for the attention of Mr E. Guthrie, email: ed.guthrie@gulfmark.com).

	1.1.19		“ Company ” means at any given time the company responsible for a Vessel’s compliance with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and/or (ii) the ISPS Code (as the case may be).

	1.1.20		“ Compliance Certificate ” means a certificate to be delivered by the Borrower to the Agent substantially in the form of Schedule 6.

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

	1.1.22		“ Default Rate ” means the rate which is the aggregate of LIBOR, any Mandatory Cost, the Margin and two per centum (2%) per annum.

	1.1.23		“ Determination Date ” means

	(a)		the last day of each calendar quarter during the Facility Period;

	(b)		after the occurrence of an Event of Default which is continuing, any date designated by the Agent upon at least

three (3) Business Days’ prior written notice to the Borrower; and

(c)

each Advance Date.

	1.1.24		“ 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.

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

	1.1.26		“ Drawdown Notice ” means a notice complying with Clause 2.3 in the form set out in Schedule 4.

	1.1.27		“ Drawing ” means a part (or, if requested and available, all) of the Facility advanced by the Banks to the Borrower in accordance with Clause 2.

	1.1.28		“ Earnings ”, in relation to a Vessel, means all hires including (without limitation) all time charter hire and bareboat charter hire, freights, pool income and other sums payable to or for the account of the Borrower in respect of that 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 that Vessel.

	1.1.29		“ Earnings Account ” means a bank account to be opened in the name of the Borrower with the Agent and designated “Vessel Net Earnings Account”.

	1.1.30		“ EBITDA ” means, for any twelve month period ending on a Determination Date, the consolidated profit on ordinary activities of the Group before Taxes:

	(a)		adjusted to exclude interest received or receivable and other similar income to the extent not already excluded;

	(b)		before the depreciation of fixed assets but after excluding any loss or gain arising on the disposal of fixed assets or shares;

	(c)		before the deduction of Interest Expense for such period;

	(d)		before any charge for the amortisation of goodwill, merger differences, acquisition costs or any other intangible asset; and

	(e)		before adding or deducting extraordinary or exceptional items (to include, for the avoidance of doubt, any redundancy costs and foreign exchange profits and losses in relation to the funding of the business) in each case for such period.

	1.1.31		“ Employee Plan ” means an employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any of its ERISA Affiliates is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

	1.1.32		“ Encumbrance ” means any mortgage, charge, pledge, lien, assignment, hypothecation, preferential right, option, title retention or trust arrangement or any other agreement or arrangement which, in any of the aforementioned instances, has the effect of creating security.

	1.1.33		“ Environmental Affiliate ” means an agent or employee of the Borrower or a person in a contractual relationship with the Borrower in respect of the Vessel owned by it (including without limitation, the operation of or the carriage of cargo of such Vessel).

	1.1.34		“ Environmental Approvals ” means any present or future permit, licence, approval, ruling, variance, exemption or other authorisation required under the applicable Environmental Laws.

	1.1.35		“ Environmental Claim ” means any and all enforcement, clean-up, removal, administrative, governmental, regulatory or judicial actions,

orders, demands or investigations instituted or completed pursuant to any Environmental Laws or Environmental Approvals together with any claims made by any third person relating to damage, contribution, loss or injury resulting from any Environmental Incident.

1.1.36

“ Environmental Incident ” means:

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

	(b)		any incident in which Environmentally Sensitive Material is released from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the relevant Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or where any guarantor, any manager (or any sub-manager of such Vessel) or any of its officers, employees or other persons retained or instructed by it (or such sub-manager) are at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

	(c)		any other incident in which Environmentally Sensitive Material is released otherwise than from such Vessel and in connection with which that Vessel is actually or potentially liable to be arrested and/or where any guarantor, any manager (or any sub-manager of the relevant Vessel) or any of its officers, employees or other persons retained or instructed by it (or such sub-manager) are at fault or allegedly at fault or otherwise liable to any legal or administrative action.

1.1.37

“ Environmental Laws ” means all present and future laws, regulations, treaties and conventions of any applicable jurisdiction which:

(a)

have as a purpose or effect the protection of, and/or prevention of harm or damage to, the environment;

	(b)		relate to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

	(c)		provide remedies or compensation for harm or damage to the environment; or

	(d)		relate to Environmentally Sensitive Materials or health or safety matters.

	1.1.38		“ Environmentally Sensitive Material ” means (i) oil and oil products and (ii) any other waste, pollutant, contaminant or other substance (including any liquid, solid, gas, ion, living organism or noise) that may be harmful to human health or other life or the environment or a nuisance to any person or that may make the enjoyment, ownership or other territorial control of any affected land, property or waters more costly for such person to a material degree.

	1.1.39		“ ERISA ” means, at any date, the United States Employee Retirement Income Security Act of 1974 (or any successor legislation thereto) as amended from time to time, and the regulations promulgated and rulings issued thereunder, all as the same may be in effect at such date.

	1.1.40		“ ERISA Affiliate ” of the Borrower means any person that for purposes of Title I and Title IV of ERISA and Section 412 of the Code would be deemed at any relevant time to be a single employer with the Borrower, pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

	1.1.41		“ ERISA Event ” means:

	(a)		any reportable event, as defined in Section 4043 of ERISA, with respect to an Employee Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified of such event;

	(b)		the filing of a notice of intent to terminate any Employee Plan, if such termination would require material additional

contributions in order to be considered a standard termination within the meaning of Section 404(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Employee Plan or the termination of any Employee Plan under Section 4041(c) of ERISA;

	(c)		the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment of a trustee to administer, any Employee Plan;

	(d)		the failure to make a required contribution to any Employee Plan that would result in the imposition of an encumbrance under Section 412 of the Code or Section 302 of ERISA or the filing of any request for a minimum funding waiver under Section 412 of the Code with respect to any Employee Plan or Multiemployer Plan;

	(e)		an engagement in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA;

	(f)		the complete or partial withdrawal of the Borrower or any of its EIRSA Affiliates from a Multiemployer Plan; and

	(g)		the Borrower or any of its ERISA Affiliates incurring any liability under Title IV of ERISA with respect to any Employee Plan (other than premiums due and not delinquent under section 4007 of ERISA).

1.1.42

“ EURIBOR ” means:

	(a)		the applicable Screen Rate; or

	(b)		(if no Screen Rate is available for the relevant 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 to leading banks in the European interbank market,

at 11.00 a.m. (Brussels time) on the Quotation Day for the offering of deposits in euro in an amount comparable to the Loan (or any relevant part of the Loan) and for a period comparable to the relevant Interest Period.

	1.1.43		“ euro ” and “ € ” means the single currency of the Participating Member States.

	1.1.44		“ Event of Default ” means any of the events set out in Clause 12.2.

	1.1.45		“ Execution Date ” means the date on which this Agreement is executed by each of the parties hereto.

	1.1.46		“ Existing Facility ” means a senior secured revolving reducing multi-currency credit facility agreement for $100,000,000 dated 26 June 2002 made between Gulf Offshore N.S. Limited, GulfMark Norge AS and GulfMark Offshore, Inc. as borrowers provided by the banks and institutions listed therein as lenders, GulfMark Offshore, Inc. as guarantor, Nordea Bank Norge ASA and the Royal Bank of Scotland PLC as arrangers, Nordea Norge ASA as facility agent and security trustee and Danship Ship Finance as co-arranger.

	1.1.47		“ Existing Swap Arrangements ” means a foreign exchange currency transaction dated 30 September 2005 for value 17 March 2007 between the Borrower and Nordea Bank Finland plc (New York branch).

	1.1.48		“ Facility ” means the reducing revolving credit facility made available by the Banks to the Borrower pursuant to this Agreement.

	1.1.49		“ Facility Outstandings ” at any time means the total of all Drawings made at that time, to the extent not reduced by repayments, prepayments or voluntary reductions.

	1.1.50		“ Facility Period ” means the period beginning on the Execution Date and ending on the date when the whole of the Indebtedness has been repaid in full and the Borrower has ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Security Documents.

	1.1.51		“ Fee Letter ” means a letter or letters from the Agent to the Borrower setting out certain fees payable to the Agent in connection with the Facility.

	1.1.52		“ Final Balloon Payment ” means an amount of sixteen million four hundred thousand Dollars ($16,400,000), less any voluntary cancellation pursuant to Clause 2.4.2 or any mandatory prepayment pursuant to Clause 2.4.3 or Clause 2.4.4, which shall be payable on the Termination Date.

	1.1.53		“ Finance Parties ” means the Banks, the MLA and the Agent.

	1.1.54		“ Financial Indebtedness ” means any indebtedness of any person for or in respect of:

	(a)		moneys borrowed or raised;

	(b)		amounts raised under any acceptance credit facility;

	(c)		amounts raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or similar instruments;

	(d)		amounts raised pursuant to any issue of shares of the relevant person which are expressed to be redeemable;

	(e)		the amount of any liability in respect of leases or hire purchase contracts which would, in accordance with GAAP, be treated as finance or capital leases;

	(f)		all reimbursement obligations whether contingent or not in respect of amounts paid under a letter of credit or similar instrument;

	(g)		all interest rate, currency swap and similar agreements obliging the making of payments, whether periodically or upon the happening of a contingency (and the value of such indebtedness shall be the mark-to-market valuation of such transaction at the relevant time) with the exception of the Existing Swap Arrangements;

	(h)		amounts raised under any other transaction (including, without limitation, any forward sale or purchase agreement) having the commercial effect of a borrowing; and

	(i)		any guarantee of indebtedness falling within paragraphs (a) to (h) above.

	1.1.55		“ First Reduction Date ” means the date falling sixty six (66) calendar months after the Execution Date.

	1.1.56		“ GAAP ” means either IFRS or the generally accepted accounting principles in the United States of America.

	1.1.57		“ Group ” means the Borrower and each of its Subsidiaries.

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

	1.1.59		“ Indebtedness ” means the Facility Outstandings; all other sums of any nature including costs (together with all interest on any of those sums) which from time to time may be payable by the Borrower to the Finance Parties pursuant to the Security Documents; any damages payable as a result of any breach by the Borrower of any of the Security Documents; and any damages or other sums payable as a result of any of the obligations of the Borrower under or pursuant to any of the Security Documents being disclaimed by a liquidator or any other person, or, where the context permits, the amount thereof for the time being outstanding.

	1.1.60		“ Insurances ”, in relation to a Vessel, means all policies and contracts of insurance (including but not limited to hull and machinery, 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 that Vessel or her increased value and (where the context permits) all benefits thereof, including all claims of any nature and returns of premium.

	1.1.61		“ Interest Expense ” means the interest paid by any member of the Group on the Total Debt in the twelve month period ending on a Determination Date.

	1.1.62		“ Interest Payment Date ” means each date for the payment of interest in accordance with Clause 6.

	1.1.63		“ Interest Period ” means each interest period selected by the Borrower or agreed by the Banks pursuant to Clause 6.

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

	1.1.65		“ 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.

	1.1.66		“ ISPS Code ” means the International Ship and Port Security Code as adopted by the Conference of Contracting Governments to the Safety of Life at Sea Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea Convention 1974.

	1.1.67		“ Issue Date ” means the date on which an LC is issued under Clause 2.11.

	1.1.68		“ Issue Request ” means a notice substantially in the form set out in Schedule 7.

	1.1.69		“ law ” or “ Law ” means any law, statute, treaty, convention, regulation, instrument or other subordinate legislation or other legislative or quasi-legislative rule or measure, or any order or decree of any government, judicial or public or other body or authority, or any directive, code of practice, circular, guidance note or other direction issued by any competent authority or agency (whether or not having the force of law).

	1.1.70		“ LC ” means any letter of credit, standby letter of credit, payment guarantees or other equivalent instruments which the Issuer in its absolute discretion agrees to issue hereunder.

	1.1.71		“ LC Amount ” means the aggregate from time to time of the actual and contingent liabilities of the Issuer under or pursuant to the LCs.

	1.1.72		“ LC Availability Termination Date ” means the seventh anniversary of the Execution Date.

	1.1.73		“ LIBOR ” means:

	(a)		the applicable Screen Rate; or

	(b)		(if no Screen Rate is available for any Interest Period or for any currency in which the Facility is to be denominated during that 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 to leading banks in the London interbank market,

at 11.00 a.m. (London time) on the Quotation Day for the offering of deposits in the currency in which the Facility is to be denominated during the relevant Interest Period in an amount comparable to the Facility (or any relevant part of the Facility) and for a period comparable to the relevant Interest Period.

	1.1.74		“ Majority Banks ” means any one or more Banks whose combined Proportionate Shares exceed sixty six and two thirds per centum (66 ² / 3 %).

	1.1.75		“ Manager ” means the Borrower or any entity within the Group.

	1.1.76		“ Mandatory Cost ” means for each Bank to which it applies, the cost imputed to that Bank of compliance with the mandatory liquid asset requirements of the Bank of England and/or the banking supervision or other costs imposed by the Financial Services Authority, determined in accordance with Schedule 5 (Calculation of the Mandatory Cost).

	1.1.77		“ Margin ” shall be calculated on, and effective from each Determination Date in accordance with the following grid based on the ratio of (a) the Borrower’s average Total Debt over the twelve (12) month period

terminating on the relevant Determination Date to (b) the Borrower’s consolidated EBITDA determined on the relevant Determination Date:


Total Debt/EBITDA		Applicable Margin
Less than 2.5		0.70% p.a.
Equal to or greater than 2.5 but less than 5.0		0.80% p.a.
Equal to or greater than 5.0		0.90% p.a.

	1.1.78		“ Margin Stock ” means margin stock or “margin security” within the meaning of Regulations T, U and X.

	1.1.79		“ Material Adverse Effect ” means a material adverse change in, or a material adverse effect on:

	(a)		the financial condition, assets, prospects or business of any Security Party or on the consolidated financial condition, assets, prospects or business of the Group;

	(b)		the ability of any Security Party to perform and comply with its obligations under any Security Document or to avoid any Event of Default;

	(c)		the validity, legality or enforceability of any Security Document; or

	(d)		the validity, legality or enforceability of any security expressed to be created pursuant to any Security Document or the priority and ranking of any such security.

1.1.80

“ Material Subsidiary ” means any Subsidiary of the Borrower whose net asset value represents ten per cent (10%) or more of the net asset value of the Group, as indicated by the financial statements to be delivered to the Agent pursuant to Clause 10.2.1.

	1.1.81		“ Maximum Facility Amount ” means an amount not exceeding the lesser of (i) eighty per cent (80%) of the aggregate value of the Vessels as determined by the Valuations and (ii) twenty five million Dollars ($25,000,000) less the LC Amount from time to time,

			and subject to any reductions effected in accordance with Clauses 2.4, 15.7 and 15.8.

	1.1.82		“ Maximum LC Amount ” means twenty five million Dollars ($25,000,000).

	1.1.83		“ Mortgages ” means the first preferred naval mortgages over each of the Vessels made or to be made between the Borrower and the Agent referred to in Clause 8.1.1 (each a “ Mortgage ”).

	1.1.84		“ Multiemployer Plan ” means a “multiemployer plan” (as defined in Section (3)(37) of ERISA) contributed to for any employees of the Borrower or any of its ERISA Affiliates.

	1.1.85		“ Net Earnings ” means the Earnings less any Operating Commissions.

	1.1.86		“ NIBOR ” means the Norwegian interbank offered rate being the rate per annum equal to the offered quotation for deposits in amounts equal to that Drawing (and for periods equal to the Interest Period of that Drawing) appearing on Reuters Screen page NIBR, published by Reuters through its monitor service or any equivalent successor to such service at or about 12:00 p.m. (Oslo time) on the applicable Quotation Day or if no such rate is available, the arithmetic mean (rounded upwards to the nearest 1/16 of one per cent) of the rate per annum at which the Agent is able to acquire NOK in the amount and for the Interest Period equal to such Drawing in the Norwegian interbank market at or about 12:00 p.m. (Oslo time) on the applicable Quotation Day.

	1.1.87		“ Norwegian Kroner ” means the lawful currency of the Kingdom of Norway.

	1.1.88		“ Optional Currency ” means any of Dollars, Sterling, Euro and Norwegian Kroner.

	1.1.89		“ Operating Commissions ” means any commissions or fees payable by the Borrower in respect of any of the Vessels to any agents in respect of the chartering of the Vessels.

	1.1.90		“ Participating Member State ” means any member state of the European Community that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

	1.1.91		“ Party ” means a party to this Agreement.

	1.1.92		“ PBGC ” means the U.S. Pension Benefit Guaranty Corporation, or any entity succeeding to all or any of its functions under ERISA.

	1.1.93		“ Permitted Liens ” means (i) any Encumbrance which has the prior written approval of the Agent or (ii) any Encumbrances that arise either by operation of law or in the ordinary course of the business of the relevant Security Party which are discharged in the ordinary course of business.

	1.1.94		“ Potential Event of Default ” means any event which, with the giving of notice and/or the passage of time and/or the satisfaction of any materiality test, would constitute an Event of Default.

	1.1.95		“ Pre-Approved Classification Society ” means any of Det norske Veritas, Lloyds Register of Shipping, American Bureau of Shipping (ABS), Germanischer Lloyd or Bureau Veritas.

	1.1.96		“ Proceedings ” means any suit, action or proceedings begun by any of the Finance Parties arising out of or in connection with the Security Documents.

	1.1.97		“ Proportionate Share ” means, for each Bank, the percentage that its Commitment bears to the aggregate Commitments of all Banks from time to time, being initially the percentage indicated against the name of that Bank in Schedule 1.

1.1.98

“ Quotation Day ” means, in relation to any period for which an interest rate is to be determined :

	(a)		(if the currency is sterling) the first day of that period;

	(b)		(if the currency is euro) two TARGET Days before the first day of that period; or

	(c)		(for any other currency) two Business Days before the first day of that period,

unless market practice differs in the relevant interbank market for a currency, in which case the Quotation Day will be determined by the Agent in accordance with market practice in that interbank market.

	1.1.99		“ Reference Banks ” means the office of DnB NOR Bank ASA at Lars Hillesgate 30, PO Box 7100, NO-5020 Bergen, Norway, The Royal Bank of Scotland plc at 1 Albyn Place, Aberdeen AB10 1BR, Scotland and HSH Nordbank AG at Gerhart-Hauptmann-Platz 50, 20095 Hamburg, Germany or such other banks as may be appointed by the Agent in consultation with the Borrower.

	1.1.100		“ Regulations T, U and X ” means, respectively Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States (or any successor) as now and from time to time hereafter in effect.

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

	1.1.102		“ Screen Rate ” means:

(a)

in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate for the relevant currency and period; and

	(b)		in relation to EURIBOR, the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period; and

	(c)		in relation to NIBOR, Reuters screen page NIBR,

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 Borrower and the Banks.

	1.1.103		“ Security Documents ” means this Agreement, the Assignments, the Mortgages or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed as security for the payment of all or any part of the Indebtedness.

	1.1.104		“ Security Parties ” means, at any relevant time, the Borrower and any other party 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.

	1.1.105		“ 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.

	1.1.106		“ SMS ” means, in relation to each Vessel, a safety management system for that Vessel developed and implemented in accordance with the ISM Code and including the functional requirements, duties and obligations required by the ISM Code.

	1.1.107		“ Sterling ” means the lawful currency of England.

	1.1.108		“ Subsequent Reduction Dates ” means each date falling at consecutive six monthly intervals after the previous Subsequent Reduction Date which in the case of the first Subsequent Reduction Date shall be six months after the First Reduction Date.

	1.1.109		“ Subsidiary ” means a subsidiary undertaking, as defined in section 736 Companies Act 1985, or any analogous definition under any other relevant system of law.

	1.1.110		“ TARGET ” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system.

	1.1.111		“ TARGET Day ” means any day on which TARGET is open for the settlement of payments in euro.

	1.1.112		“ Taxes ” means all taxes, levies, imposts, duties, charges, fees, deductions and withholdings (including any related interest and penalties) and any restrictions or conditions resulting in any charge, other than taxes on the overall net income of a Finance Party or branch thereof, and “ Tax ” and “ Taxation ” shall be interpreted accordingly.

	1.1.113		“ Termination Date ” means the seventh anniversary of the Execution Date.

	1.1.114		“ Total Assets ” means the amount which is equal to the total consolidated assets of the Borrower as shown in the Borrower’s latest audited consolidated balance sheet less the goodwill (if any) of the Borrower as shown in the Borrower’s latest audited balance sheet.

	1.1.115		“ Total Debt ” means the aggregate of:-

	(a)		the amount calculated in accordance with GAAP shown as each of “long term debt”, “short term debt” and “current portion of long term debt” on the latest consolidated balance sheet of the Borrower; and

	(b)		the amount of any liability in respect of any lease or hire purchase contract entered into by the Borrower or any of its Subsidiaries which would, in accordance with GAAP, be treated as a finance or capital lease.

1.1.116

“ Total Loss ”, in relation to a Vessel, means:-

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

	(b)		the requisition for title, compulsory acquisition, nationalisation or expropriation of that Vessel by or on behalf of any government or other authority (other than by way of requisition for hire); or

	(c)		the capture, seizure, arrest, detention or confiscation of that Vessel, unless the Vessel is released and returned to the possession of the Borrower within thirty (30) days after the capture, seizure, arrest, detention or confiscation in question.

	1.1.117		“ Total Shareholders Equity ” means the aggregate of the amount paid up on the issued share capital of any relevant entity and the amount standing to the credit of its capital and revenue reserves (including any share premium account or capital redemption reserve but excluding any revaluation reserve,) plus or minus the amount standing to the credit or debit (as the case may be) of its profit and loss account.

	1.1.118		“ Transfer Certificate ” means a certificate materially in the form set forth in Schedule 3 signed by a Bank and a Transferee whereby:-

	(a)		such Bank seeks to procure the transfer to such Transferee of all or a part of such Bank’s rights and obligations under this Agreement upon and subject to the terms and conditions set out in Clause 14; and

	(b)		such Transferee undertakes to perform the obligations it will assume as a result of delivery of such certificate to the Agent as is contemplated in Clause 14.

1.1.119

“ Transfer Date ” means, in relation to any Transfer Certificate, the date for the making of the transfer specified in the schedule to such Transfer Certificate.

	1.1.120		“ Transferee ” means a bank or other financial institution to which a Bank seeks to transfer all or part of such Bank’s rights and obligations under this Agreement.

	1.1.121		“ Trust Property ” means:-

	(a)		the benefit of Clause 8 and the covenants contained in Clause 9.3; and

	(b)		all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents (other than this Agreement), with the exception of any benefits arising solely for the benefit of the Agent.

	1.1.122		“ UCC ” means the Uniform Commercial Code as from time to time in effect in the State of Delaware, or, if the Uniform Commercial Code in any other State of the United States of America is mandatorily applicable with respect to any particular matter, the Uniform Commercial Code as from time to time in effect in such other State of the United States of America.

	1.1.123		“ Valuation ” means in relation to a Vessel the average of the written valuations of that Vessel expressed in Dollars prepared by two of the Approved Brokers (or such other firms of reputable independent shipbrokers as may be acceptable to the Majority Banks), to be nominated by the Borrower. Such valuations shall be prepared at the Borrower’s expense (unless otherwise stated in this Agreement), without a physical inspection, on the basis of a sale for prompt delivery for cash at arm’s length on a charter free basis between a willing buyer and a willing seller.

	1.1.124		“ Vessels ” means, subject to Clause 2.17, those vessels listed in Schedule 2 (each a “ Vessel ”).

	1.2		Interpretation

			In this Agreement:-

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

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

	1.2.3		references to Recitals, Clauses, Schedules and Appendices are references to recitals and clauses of, and schedules and appendices to, this Agreement;

	1.2.4		references to this Agreement include the Recitals, the Schedules and the Appendices;

	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 Security Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;

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

	1.2.8		references to any of the Finance Parties include its successors, transferees and assignees;

	1.2.9		references to times of day are unless otherwise stated to London time; and

	1.2.10		unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that:

	(i)		if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not);

	(ii)		if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and

	(iii)		notwithstanding sub-paragraph (i) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate.

The Facility and LCs and their Purpose

	2.1		Agreement to lend Subject to the terms and conditions of this Agreement, and in reliance on each of the representations and warranties made or to be made in or in accordance with each of the Security Documents, each of the Banks agrees to advance to the Borrower its Commitment of an aggregate principal amount not exceeding the Maximum Facility Amount to be used by the Borrower for the purposes referred to in the Recital.

	2.2		Drawings Subject to satisfaction by the Borrower of the conditions set out in Clause 3.1 (in respect of the first Drawing), or Clause 3.2 (in respect of all subsequent Drawings) and subject to Clause 2.3, and provided that the maximum aggregate amount of the Facility Outstandings at any given time during the Facility Period shall not exceed the Maximum Facility Amount, each Drawing shall be advanced to the Borrower, in each case by the Agent transferring the amount of the Drawing to such account as the Borrower shall notify to the Agent in the relevant Drawdown Notice by such same day method of funds transfer as the Agent shall select.

	2.3		Advance of Drawings Each Drawing shall be advanced in the Base Currency. Each Drawing shall be advanced on a Business Day, provided that the Borrower shall have given to the Agent not more than ten and not fewer than three Business Days’ notice in writing materially in the form set out in Schedule 4 of the required Advance Date of the Drawing in question and provided that the requested

Drawing would not cause a breach of Clause 2.5. Each Drawdown Notice once given shall be irrevocable and shall constitute a warranty by the Borrower that:-

	2.3.1		all conditions precedent to the advance of the Drawing requested in that Drawdown Notice will have been satisfied on or before the Advance Date requested;

	2.3.2		no Event of Default or Potential Event of Default has occurred or will then have occurred; and

	2.3.3		no Event of Default or Potential Event of Default will result from the advance of the Drawing in question.

The Agent shall promptly notify each Bank of the receipt of each Drawdown Notice, following which each Bank will make its Proportionate Share of the amount of the requested Drawing available to the Borrower through the Agent on the Advance Date requested.

2.4

Facility Reduction

2.4.1

The aggregate amount of the Facility available to the Borrower for drawing under this Agreement shall be twenty five million Dollars ($25,000,000) (less the LC Amount from time to time) during the period from the Execution Date until the First Reduction Date. On the First Reduction Date and on each of the Subsequent Reduction Dates the amount of the Facility available for drawing shall be reduced by two million one hundred and fifty thousand Dollars ($2,150,000), which shall leave the Final Balloon Payment as being payable on the Termination Date. On the Termination Date the Facility available shall be reduced to zero. Subject to the proviso hereto, the mandatory reductions in the amount of the Facility available for drawing required pursuant to this Clause will be made in the amounts and at the times specified whether or not the Maximum Facility Amount is reduced pursuant to Clause 2.4.2, Clause 2.4.3, Clause 2.4.4, Clause 15.7 or Clause 15.8. PROVIDED ALWAYS THAT any mandatory reductions pursuant to Clause 2.4.2 (voluntary reductions), Clause 2.4.3 (sale) or Clause 2.4.4 (Total Loss)

shall be applied to the remaining mandatory reductions hereunder on a pro rata basis.

2.4.2

The Borrower may voluntarily cancel the Maximum Facility Amount in whole or in part in an amount of not less than five million Dollars ($5,000,000) and shall be in integral multiples of one million Dollars ($1,000,000), provided that it has first given to the Agent not fewer than five (5) Business Days’ prior written notice expiring on a Business Day (the “ Cancellation Date ”) of its desire to reduce the Maximum Facility Amount. Such notice, once received by the Agent, shall be irrevocable and shall oblige the Borrower to make payment of all interest and Commitment Commission accrued on the amount so cancelled up to and including the Cancellation Date together with any Break Costs in respect of such cancelled amount if the Cancellation Date is not an Interest Payment Date. Any such reduction in the Maximum Facility Amount:

	(a)		shall not be reversed; and

	(b)		shall be applied against the Final Balloon Payment, and the Final Balloon Payment shall be reduced by the same amount as any such reduction of the Maximum Facility Amount.

2.4.3

In the event of a sale or disposal of a Vessel, if the aggregate Valuation of the remainder of the Vessels is less than one hundred and seventy five per cent (175%) of the Maximum Facility Amount, then the whole of the net sales proceeds shall be applied as a mandatory prepayment and the Maximum Facility Amount shall be reduced by an amount equal to such prepayment. Such reduction shall be made on the date of such sale or disposal. If the aggregate Valuation of the remainder of the Vessels is between one hundred and seventy five per cent (175%) and two hundred per cent (200%) of the Maximum Facility Amount, then no prepayment shall be required and there shall be no reduction to the Maximum Facility Amount until such time as seven million Dollars ($7,000,000) has been released under this Clause 2.4.3 when aggregated with those amounts similarly released under Clause 2.4.4, whereupon the whole of any further net sales proceeds shall be applied as a mandatory prepayment and the Maximum Facility Amount shall be reduced by an amount equal

to such prepayment. If the aggregate Valuation of the remainder of the Vessels is above two hundred per cent (200%) of the Maximum Facility Amount then no prepayment shall be required and there shall be no reduction to the Maximum Facility Amount. In each case, the Valuations used shall be that attached to the then most recently delivered Compliance Certificate. Any such prepayment shall oblige the Borrower to make payment of all interest and Commitment Commission accrued on the amount so reduced up to and including the date of reduction together with any Break Costs in respect of such reduced amount if the date of such reduction is not an Interest Payment Date. Any such reduction in the Maximum Facility Amount:

	(a)		shall not be reversed; and

	(b)		shall be applied against the Final Balloon Payment, and the Final Balloon Payment shall be reduced by the same amount as any such reduction of the Maximum Facility Amount.

2.4.4

In the event that a Vessel becomes a Total Loss, on the earlier to occur of (a) the date of receipt of the proceeds of the Total Loss and (b) the date falling one hundred and eighty (180) days after the occurrence of the Total Loss (the “ Reduction Date ”), if the aggregate Valuation of the remainder of the Vessels is less than one hundred and seventy five per cent (175%) of the Maximum Facility Amount then the whole of any total loss proceeds shall be applied as a mandatory prepayment and the Maximum Facility Amount shall be reduced by an amount equal to such prepayment. If the aggregate Valuation of the remainder of the Vessels is between one hundred and seventy five per cent (175%) and two hundred per cent (200%) of the Maximum Facility Amount, then no prepayment shall be required and there shall be no reduction to the Maximum Facility Amount until such time as seven million Dollars ($7,000,000) has been released under this Clause 2.4.4 when aggregated with those amounts similarly released under Clause 2.4.3, whereupon the whole of any further total loss proceeds shall be applied as a mandatory prepayment and the Maximum Facility Amount shall be reduced by an amount equal to such prepayment. If the aggregate Valuation of the remainder of the Vessels is

above two hundred per cent (200%) of the Maximum Facility Amount, then no prepayment shall be required and there shall be no reduction to the Maximum Facility Amount. In each case, the Valuation used shall be that attached to the then most recently delivered Compliance Certificate. Any such prepayment shall oblige the Borrower to make payment of all interest and Commitment Commission accrued on the amount so reduced up to and including the date of reduction together with any Break Costs in respect of such reduced amount if the date of such reduction is not an Interest Payment Date. Any such reduction in the Maximum Facility Amount:

	(a)		shall not be reversed; and

	(b)		shall be applied against the Final Balloon Payment, and the Final Balloon Payment shall be reduced by the same amount as any such reduction of the Maximum Facility Amount.

	2.4.5		To the extent that repayments or prepayments made by the Borrower to the Agent in accordance with this Agreement reduce the Facility Outstandings to less than the Maximum Facility Amount, the Borrower shall again be entitled to make Drawings up to the Commitment Termination Date in accordance with and subject to the terms of this Agreement. Any part of the Facility which is undrawn on the Commitment Termination Date shall be automatically cancelled.

	2.4.6		Simultaneously with each reduction of the Maximum Facility Amount in accordance with Clause 2.4.1, Clause 2.4.2, Clause 2.4.3 or Clause 2.4.4, (as the case may be), the Commitment of each Bank will reduce so that the Commitments of the Banks in respect of the reduced Maximum Facility Amount remain in accordance with their respective Proportionate Shares.

2.5

Restrictions on Drawings The Borrower shall not be entitled to make more than one Drawing on any Business Day and no more than five (5) Drawings may be outstanding at any one time during the Facility Period. Each Drawing shall be of an amount of not less than four million Dollars ($4,000,000) and shall be in integral multiples of one million Dollars ($1,000,000), or the equivalent in an

Optional Currency. If at any time during the Facility Period the Facility Outstandings exceed the Maximum Facility Amount then available or if a proposed Drawing added to the Facility Outstandings would result in the Maximum Facility Amount being exceeded then the Borrower shall immediately pay to the Agent on behalf of the Banks such amounts as will ensure that the Facility Outstandings are equal to or less than the Maximum Facility Amount then available.

	2.6		Termination Date No Bank shall be under any obligation to advance all or any part of its Commitment after the Commitment Termination Date.

	2.7		Several obligations The obligations of the Banks under this Agreement are several. The failure of a Bank to perform its obligations under this Agreement shall not affect the obligations of the Borrower to any Finance Party nor shall any Finance Party be liable for the failure of another Bank to perform any of its obligations under or in connection with this Agreement.

	2.8		Application of Facility Without prejudice to the obligations of the Borrower under this Agreement, no Finance Party shall be obliged to concern itself with the application of the Facility by the Borrower.

	2.9		Loan facility and control accounts The Agent will open and maintain such loan facility account or such other control accounts as the Agent shall in its discretion consider necessary or desirable in connection with the Facility.

	2.10		LCs Subject to the terms of this Agreement, the Issuer agrees to issue LCs in an amount in aggregate not exceeding the Maximum LC Amount to be applied for general corporate purpose. The Issuer will only be obliged to issue an LC (i) if after the issue of that LC, the LC Amount does not exceed the Maximum LC Amount (ii) it approves the form of the proposed LC (which shall be at the Issuer’s absolute discretion) (iii) the proposed LC has an expiry date of on or before the LC Availability Termination Date and (iv) no Event of Default or Potential Event of Default has occurred or will then have occurred or will result from the issuance of the LC in question.

	2.11		LC Requests The Borrower may request an LC to be issued on any Business Day prior to the LC Availability Termination Date by delivery to the Issuer of a

duly completed Issue Request not more than ten (10) and not fewer than three (3) Business Days before the proposed Issue Date. Each Issue Request once given shall be irrevocable and shall constitute a warranty by the Borrower that:-

	2.11.1		all conditions precedent to the issue of the LC requested in that Issue Request will have been satisfied on or before the Issue Date requested;

	2.11.2		no Event of Default or Potential Event of Default has occurred or will then have occurred; and

	2.11.3		no Event of Default or Potential Event of Default will result from the advance of the Drawing in question.

2.12

LC Indemnity In consideration of the Issuer agreeing to issue the LCs (and for other good and valuable consideration (the receipt and adequacy of which the Borrower hereby acknowledges), the Borrower unconditionally and irrevocably agrees:

	2.12.1		to pay to the Issuer in the relevant currency upon the Issuer’s written demand each and every amount which the Issuer is called upon to pay pursuant to an LC;

	2.12.2		at all times as a continuing security to keep the Issuer indemnified against all demands, claims, payments, costs, liabilities, damages, losses, proceedings and expenses incurred or suffered by the Issuer directly or indirectly by reason of or in connection with an LC;

	2.12.3		to supply the Issuer promptly with such evidence as the Issuer may reasonably require at the termination or reduction of the Issuer’s liability under that LC; and

	2.12.4		to pay interest to the Issuer in the relevant currency upon the Issuer’s written demand from time to time on each amount payable by the Borrower under this Clause 2.12 at a date of the Issuer’s payment until the date of the Borrower’s payment to the Issuer before or after any relevant judgment.

2.13

Direction to pay under LCs The Borrower irrevocably directs the Issuer to make such payments and comply with such demands or claims made on the Issuer

in respect of or purporting to be in respect of an LC as the Issuer in its absolute discretion thinks fit without any reference to or further authority or direction from the Borrower, or any necessity to obtain the Borrower’s confirmation or verification, and notwithstanding that the Borrower may have disputed the Issuer’s liability to pay or comply or that all or any part of the Issuer’s obligations under the LC may not legally exist or be legally binding on the Issuer. The Borrower agrees that the Issuer may treat the Issuer’s obligations under an LC as payable on first demand and that any such payment or compliance or purported compliance by the Issuer shall as between the Issuer and the Borrower be conclusive evidence that the Issuer was liable to make the payment or comply with the demand or claim.

	2.14		Transaction underlying LC The Borrower agrees that the Issuer shall be concerned only with the demand or claim made on it in respect of an LC and, where a demand or claim must be accompanied by any other document, with any such document, in each case as presented to the Issuer, and not with any transaction to which the demand, claim or document relates, or as to whether the payment demanded or the claim made was in fact due.

	2.15		Demand under LC The Issuer shall be entitled to rely without further enquiry on any demand, claim, document or communication in respect of an LC believed by it acting in good faith to be genuine and correct and to have been signed or otherwise executed or made by the proper person. In particular, but without limitation, the Issuer acting in good faith shall not be obliged to investigate the propriety of any such demand, claim, document or communication or the authority or identity of the person producing, claiming, signing or making such demand, claim, document or communication.

	2.16		Currency for payment of LC The Issuer may, if called on to make a payment or to comply with a demand or claim in respect of an LC, purchase in accordance with its usual practice the amount of the relevant currency necessary to make that payment or to comply with that demand or claim (unless the Issuer has already been put in funds by the Borrower).

	2.17		Substitute Vessels It is agreed and acknowledged that the Borrower may request amendments to the list of Vessels set out at Schedule 2. Any such request shall be considered by the Banks acting reasonably, and subject to:

2.17.1

the Banks being satisfied that the replacement vessels are:

	(i)		offshore PSVs or AHTSs of the Borrower’s usual standard and quality;

	(ii)		registered in an acceptable registry and classed with a Pre-Approved Classification Society;

	(iii)		built no earlier than 1997 and being no more than two (2) years older than the Vessel it is to replace;

	(iv)		have a Valuation no less than eighty per cent (80%) of the Valuation of the Vessel to be replaced;

	2.17.2		the Borrower, as owner of the replacement vessel, granting security over such replacement vessel equivalent to the other Security Documents; and

	2.17.3		the Agent receiving such conditions precedent (including but not limited to corporate papers and legal opinions) as it may reasonably require,

the Banks shall consent to such substitutions and the definitions of “ Vessels ”.

Conditions Precedent and Subsequent

3.1

Conditions Precedent — First Drawing Before any Bank shall have any obligation to advance the first Drawing under the Facility and/or the Issuer has any obligation to issue an LC, the Borrower shall pay to the Agent the relevant fees referred to in Clause 7 and deliver or cause to be delivered to or to the order of the Agent the following documents and evidence:-

3.1.1

Evidence of incorporation Such evidence as the Agent may reasonably require that each Security Party was duly incorporated in its country of incorporation and remains in existence and, where appropriate, in good standing, with power to enter into, and perform its obligations under, those of the Security Documents to which it is, or is intended to be, a party, including (without limitation) a copy, certified by a director or an officer of the Security Party in question as true, complete, accurate and

unamended, of all documents establishing or limiting the constitution of each Security Party.

	3.1.2		Corporate authorities A copy, certified by a director or any duly authorised officer of the Security Party in question as true, complete, accurate and neither amended nor revoked, of a resolution of the directors of each Security Party (together, where appropriate, with signed waivers of notice of any directors’ meetings) approving, and authorising or ratifying the execution of, those of the Security Documents to which that Security Party is or is intended to be a party and all matters incidental thereto.

	3.1.3		Officer’s certificate A certificate (i) signed by a duly authorised officer or representative of each of the Security Parties setting out the names of the directors and officers of that Security Party and (ii) issued by each Security Party’s company registry confirming due incorporation and valid existence and (when such information is maintained by the registry) the names of its directors and shareholders.

	3.1.4		Power of attorney The power of attorney (notarially attested and legalised, if necessary, for registration purposes) of each of the Security Parties under which any documents are to be executed or transactions undertaken by that Security Party.

	3.1.5		The Security Documents The Security Documents, together with all notices and other documents required by any of them, duly executed.

	3.1.6		Drawdown Notice A duly completed Drawdown Notice.

	3.1.7		Process agent A letter from Gulf Offshore N.S. Limited accepting their appointment by each of the Security Parties as agent for service of Proceedings pursuant to the Security Documents.

	3.1.8		Legal opinions Confirmation satisfactory to the Agent that all legal opinions required by the Agent and the Finance Parties will be given substantially in the form required by the Agent and the Finance Parties.

	3.1.9		Consents A certificate from the Borrower that all (if any) consents, licences, approvals and authorisations of, or registrations with or declarations to, any governmental authority, bureau or agency which may be required in connection with the Security Documents have been made or obtained and remain in full force and effect.

	3.1.10		Fee Letter The Fee Letter duly signed and payment of all fees that have fallen due thereunder.

	3.1.11		Accounts The audited consolidated accounts for the Borrower for the year ended 2005.

	3.1.12		Evidence of Borrower’s title Evidence that on the date of the Drawing (i) the Vessels are registered under the flag stated in Schedule 2 in the ownership of the Borrower and the relevant Mortgages will be capable of being immediately registered against the Vessels with first priority.

	3.1.13		Evidence of insurance Evidence that the Vessels are 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 a written opinion on the Insurances from an insurance adviser appointed by the Agent.

	3.1.14		Confirmation of class A Certificate of Confirmation of Class for hull and machinery confirming that the Vessels are classed with the highest class applicable to vessels of her type with a Pre-Approved Classification Society.

	3.1.15		Vessel Documents Photocopies, certified as true, accurate and complete by an authorised signatory of the Borrower, of:

	(i)		current SMC of each of the Vessels; and

	(ii)		each ISM Company’s current DOC,

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

3.1.16

Valuations Valuation in respect of m.v. “SEA GUARDIAN”.

3.2

Conditions Precedent — Subsequent Drawings Before any Bank shall have any obligation to advance any subsequent Drawings under the Facility and/or the Issuer has any obligation to issue any further LC, the Borrower shall deliver or cause to be delivered to the order of the Agent:

	3.2.1		Officer’s certificate A certificate signed by a duly authorised officer of each Security Party dated no later than five (5) Business Days before the date of the Drawing confirming that none of the documents and evidence delivered to the Agent pursuant to Clauses 3.1.1, 3.1.2, 3.1.3 and 3.1.4 has been amended, modified or revoked in any way since its delivery to the Agent.

	3.2.2		Drawdown Notice Drawdown Notice or an Issue Request (as applicable).

3.3

Conditions Subsequent The Borrower undertakes to deliver or to cause to be delivered to the Agent on, or, in respect of Clause 3.3.1 and Clause 3.3.3 not later than ten (10) days, or in respect of Clause 3.3.2 not later than fifteen (15) Business Days, or such other period as the Agent may have consented to after, the earlier of the first Advance Date and the First Issue Date, the following additional documents and evidence:-

	3.3.1		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 Agent.

	3.3.2		Evidence of Borrower’s title Certificates of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the relevant Vessel’s flag state confirming that (a) the Vessels are permanently registered under that flag in the ownership of the Borrower (b) the Mortgages have been registered with first priority against the Vessels and (c) there are no further Encumbrances registered against the Vessels.

	3.3.3		Evidence of UCC filing Evidence that financing statement pursuant to the UCC in respect of the Assignments entered into between the Borrower and the Agent have been filed.

	3.4		No waiver If the Banks in their sole discretion agree to advance any part of the Facility to the Borrower or if the Issuer agrees in its sole discretion to issue an LC before all of the documents and evidence required by Clause 3.1 or Clause 3.2 (as the case may be) have been delivered to or to the order of the Agent, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Agent no later than the date agreed by the Agent and the Borrower and the advance of any part of the Facility or the issue of an LC shall not be taken as a waiver of the Agent’s right to require production of all the documents and evidence required by Clause 3.1 or Clause 3.2 (as the case may be).

	3.5		Form and content All documents and evidence delivered to the Agent pursuant to this Clause shall:-

	3.5.1		be in form and substance reasonably acceptable to the Agent;

	3.5.2		be accompanied, if required by the Agent, by translations into the English language, certified in a manner acceptable to the Agent acting reasonably;

	3.5.3		if required for registration purposes, be certified, notarised, legalised or attested in a manner acceptable for registration.

4		Representations and Warranties

		The Borrower represents and warrants to each of the Finance Parties at the Execution Date and (by reference to the facts and circumstances then pertaining) at the date of each Drawdown Notice, at each Advance Date, at each Issue Date and at each Interest Payment Date as follows (except that the representation and warranty contained at Clause 4.17 shall only be made on the first Advance Date and that the representation and warranty contained at Clause 4.9 shall only be made on the Execution Date) :-

4.1

Incorporation and capacity Each of the Security Parties is a body corporate duly constituted, organised and validly existing and (where applicable) in good standing under the law of its country of incorporation, in each case with perpetual corporate existence and the power to sue and be sued, to own its assets and to carry on its business, and all of the corporate shareholders (if any) of each Security Party are duly constituted and existing under the laws of their countries of incorporation with perpetual corporate existence and the power to sue and be

sued, to own their assets and to carry on their business and are acting on their own account.

	4.2		Solvency None of the Security Parties is insolvent or in liquidation or administration or subject to any other insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any of the Security Parties. For this purpose a Security Party will be deemed insolvent if it is unable to pay its debts within the meaning of S.123 of the Insolvency Act 1986.

	4.3		Binding obligations The Security Documents when duly executed and delivered will constitute the legal, valid and binding obligations of the Security Parties enforceable in accordance with their respective terms subject to applicable laws regarding creditors’ rights in general.

	4.4		Satisfaction of conditions All acts, conditions and things required to be done and satisfied and to have happened prior to the execution and delivery of the Security Documents in order to constitute the Security Documents the legal, valid and binding obligations of the Security Parties in accordance with their respective terms have been done, satisfied and have happened in compliance with all applicable laws.

	4.5		Registrations and consents All (if any) consents, licences, approvals and authorisations of, or registrations with or declarations to, any governmental authority, bureau or agency which may be required in connection with the execution, delivery, performance, validity or enforceability of the Security Documents have been obtained or made and remain in full force and effect and the Borrower is not aware of any event or circumstance which could reasonably be expected adversely to affect the right of any of the Security Parties to hold and/or obtain renewal of any such consents, licences, approvals or authorisations.

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

	4.7		No material litigation There is no action, suit, arbitration or administrative proceeding nor any contemplated action, suit, arbitration or administrative proceeding pending or to its knowledge about to be pursued before any court, tribunal or governmental or other authority which is not covered by adequate insurance which would, or would be likely to, have a Material Adverse Effect.

	4.8		No breach of law or contract The execution, delivery and performance of the Security Documents will not contravene any contractual restriction or any law binding on any of the Security Parties or on any shareholder (whether legal or beneficial) of any of the Security Parties, or the constitutional documents of any of the Security Parties, nor result in the creation of, nor oblige any of the Security Parties to create, any Encumbrance over all or any of its assets, with the exception of the Encumbrances created by or pursuant to the Security Documents and Permitted Liens.

	4.9		No deductions To the best of its knowledge belief and without undue enquiry, none of the Security Parties is required to make any deduction or withholding from any payment which it may be obliged to make to any of the Finance Parties under or pursuant to the Security Documents.

	4.10		Use of Facility The Facility will be used for the purpose specified in the recital.

	4.11		Material Adverse Change There has been no change in the business, assets, operations or condition (financial or otherwise) of any of the Security Parties or in the facts and information regarding such entities as represented to date which constitutes a Material Adverse Effect.