REVOLVING CREDIT FACILITY

Clause

Page

Interpretation

1

Facility

21

Conditions Precedent

22

Utilisation — Loans

23

Utilisation — Letters of Credit

24

Letters of Credit

26

Repayment and Reutilisation

29

Reduction, Prepayment, Cancellation and Increase

30

Interest

34

Terms

35

Market Disruption

36

Taxes

36

Increased Costs

39

Reserve, Charter and Operating Accounts

40

Payments

42

Guarantee and Indemnity

45

Representations

47

Information Covenants

52

Financial Covenants

54

General Covenants

58

Substitution

72

Valuation

73

Default

74

Security

79

The Administrative Parties

82

Evidence and Calculations

88

Fees

88

Indemnities and Break Costs

89

Expenses

91

Waiver of Consequential Damages

92

Amendments and Waivers

92

Changes to the Parties

94

Disclosure of Information

98

Set-Off

98

Pro Rata Sharing

98

Severability

99

Counterparts

100

Notices

100

Language

102

Governing Law

102

Enforcement

102

Clause

Page

Page

Original Parties

104

Part 1 The Owners and the Original Vessels

104

Part 2 The Original Lenders

106

Conditions Precedent

107

Part 1 Initial Conditions Precedent

107

Part 2 Additional Guarantor Documents

110

Form of Request

114

Calculation of the Mandatory Cost

115

Form of Transfer Certificate

117

Compliance Certificate

119

Standing Payment Instructions

121

Form of Accession Agreement

122

Form of Reconciliation Certificate

123

Signatories

124

(1)

QUINTANA MARITIME LIMITED , a corporation incorporated according to the laws of the Republic of the Marshall Islands with its registered office at Ajeltake Island, Ajeltake Road, Majuro, Republic of the Marshall Islands, MH 96960 (the Borrower );

(2)

THE COMPANIES listed in Part 1 of Schedule 1, each of which is a limited liability company formed according to the law of the country indicated against its name in Part 1 of Schedule 1, with its registered office at Ajeltake Island, Ajeltake Road, Majuro, Republic of the Marshall Islands, MH 96960 (each an Owner and together the Owners );

(3)

QUINTANA MANAGEMENT, LLC, a limited liability company formed according to the laws of the Republic of the Marshall Islands with its registered office at Ajeltake Island, Ajeltake Road, Majuro, Republic of the Marshall Islands, MH 96960 ( Quintana Management );

(4)

CITIBANK, N.A. and THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as original lenders (the Original Lenders );

(5)

CITIGROUP GLOBAL MARKETS LIMITED and THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as mandated lead arrangers (the Arrangers );

(6)

CITIBANK INTERNATIONAL PLC as administrative agent (the Facility Agent );

(7)

CITICORP TRUSTEE COMPANY LIMITED as security trustee for the Lenders and the Issuing Bank (each as defined herein) in relation to the Credits (as defined herein) (the Security Trustee ); and

(8)

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as issuing bank (the Issuing Bank ).

(a)

an Event of Default; or

(a)

freights, passage and hire moneys (howsoever earned);

(c)

demurrage and detention moneys; or

(a)

any land including, without limitation, surface land and sub-surface strata, sea bed or river bed under any water (as referred to below) and any natural or man-made structures;

(c)

air including, without limitation, air within buildings and other natural or man-made structures above or below ground.

(a)

pollution or contamination of the Environment, any ecological system or any living organisms which inhabit the Environment or any ecological system;

(c)

the emission, leak, release, spill or discharge into the Environment of noise, vibration, dust, fumes, gas, odours, smoke, steam effluvia, heat, light, radiation (of any kind), infection, electricity or any Hazardous Material and any matter or thing capable of constituting a nuisance or an actionable tort or breach of statutory duty of any kind in respect of such matters,

(a)

the proportion of claims for general average, salvage and salvage charges which are not recoverable as a result of the value at which that Vessel is assessed for the purpose of such claims exceeding her hull and machinery insured value; and

(a)

on or before the date it becomes a Lender; or

(a)

this Agreement;

(d)

on or after the date of its execution and delivery, any Swap Agreement;

(f)

on or after the date of its execution and delivery, the Subordination Deed;

(h)

any other document designated as such by the Facility Agent and the Borrower.

(a)

moneys borrowed;

(c)

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

(e)

any agreement treated as a finance or capital lease in accordance with GAAP;

(g)

the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset;

(i)

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

(a)

in relation to a company incorporated in England and Wales, has the meaning given in Section 736 Companies Act 1985; and

(a)

an additional or increased cost;

(c)

a reduction of an amount due and payable under any Finance Document (other than a Swap Agreement),

(a)

in respect of the Original Vessels, on the date referred to in Clause 20.31; and

(a)

an Original Lender; or

(a)

the applicable Screen Rate; or

(b)if no Screen Rate is available for the relevant currency or Term of that Loan or overdue amount, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Facility Agent at its request, quoted by the Reference Banks to leading banks in the London interbank market,

as of 11.00 a.m. on the second London Business Day before the start of the Term for the offering of deposits in the currency of that Loan or overdue amount for a period comparable to that Term.

Loans means together each amount which is advanced by the Lenders to the Borrower in accordance with this Agreement (each a Loan ).

London Business Day means a day (other than a Saturday or a Sunday) on which banks are open for business in London.

Losses means each and every liability, loss, charge, claim, demand, action, proceeding, damage, judgment, order or other sanction, enforcement, penalty, fine, fee, commission, interest, lien, salvage, general average, cost and expense of whatsoever nature suffered or incurred by or imposed on the Finance Parties.

Majority Lenders means, at any time, Lenders:

Manager means (i) in respect of MV “Fearless” and MV “Iron Man” only, Blossom Maritime Corporation of 80 Broad Street, Monrovia, Liberia or (ii) Quintana Management or such other entity within the Group as the Borrower shall advise to the Facility Agent from time to time (and as shall be acceptable to the Majority Lenders).

Mandatory Cost means the properly evidenced cost of complying with certain regulatory requirements, expressed as a percentage rate per annum and calculated by the Facility Agent in accordance with Schedule 4 (Calculation of the Mandatory Cost).

Margin means zero point nine seven five per cent. (0.975%) per annum.

Market Value means, in respect of a Vessel, the market value of that Vessel calculated in accordance with Clause 22 (Valuation).

Material Adverse Effect means a material adverse effect on:

Maturity Date means the last day of the Term of a Loan.

Maximum Facility Amount means the lesser of (a) sixty-five (65) per cent. of the aggregate Market Value of the Vessels and (b) two hundred and fifty million Dollars (US$ 250,000,000).

Maximum Letter of Credit Amount means twenty five million Dollars (US$25,000,000).

Measurement Period means, at any time, the last four (4) fiscal quarters for the Borrower provided always that until four (4) fiscal quarters have elapsed from the date of this Agreement, the period beginning with the commencement of the first quarter beginning on or after the date of this Agreement and ending on the date of determination.

Memorandum of Agreement means, in relation to any Additional Vessel, the memorandum of agreement entered into or to be entered into by an Additional Guarantor pursuant to which the Additional Guarantor will acquire an Additional Vessel.

Mortgage means, in respect of a Vessel, a first preferred ship mortgage to be given by the relevant Guarantor in favour of the Security Trustee (and to be held by the Security Trustee on behalf of itself and the Lenders):

to be, in each case, where the Vessel is registered or to be registered in the Republic of the Marshall Islands, in the form attached at Appendix 5 and where the Vessel is registered or to be registered in any other Approved Flag State, in such form as the Agent (acting on the instructions of the Majority Lenders), the Borrower and the relevant Guarantor may agree.

Net Worth shall have the meaning given to it in Clause 19.1 (Financial Covenants).

New Lender shall have the meaning to it in Clause 32.2 (Assignments and transfers by Lenders).

Obligatory Insurances means in respect of each Vessel:

Obligor means the Borrower or a Guarantor.

Operating Account means the bank account to be opened by Quintana Management with the Account Bank with account number 0/444072/008 USD, IBAN GR 97 0840 0020 0000 0044 4072 008 and designated “Quintana Management LLC – Operating Account”.

Operating Account Charge means the charge to be granted by Quintana Management in favour of the Security Trustee (and held by the Security Trustee on behalf of itself and the Lenders) in the form attached at Appendix 7, in respect of all monies standing to the credit from time to time of the Operating Account, together with any and all notices and acknowledgements entered into in connection therewith.

Operating Expenses means all costs, expenses and expenditures reasonably incurred by each Obligor in the ordinary course of the operation of its business including (i) all costs, expenses and expenditures incurred by each Guarantor (other than Quintana Management) in connection with the operation, employment, maintenance, drydocking, repair and insurance of the Vessel owned by it (including any capital expenditure in respect of that Vessel permitted under the terms of this Agreement), (ii) all costs, expenses and expenditures incurred by Quintana Management in connection with the operation of its business and its role as Manager, (iii) all costs, expenses and expenditures incurred by Quintana Management in connection with the operation of the Vessels and its role as Manager of the Vessels and (iv) all other costs, expenditures and expenses permitted to be made or incurred by an Obligor under the terms of the Finance Documents.

Original Balance Sheet means the unaudited balance sheet of the Group prepared as at 30th June, 2005.

Original Guarantors means each of the Owners and Quintana Management.

Original Lender has the meaning given to it in the Preamble.

Original Vessels means the vessels detailed in Part 1 of Schedule 1 and Original Vessel means any of them.

Owners shall have the meaning given to it in the Preamble.

Participating Member State means a member state of the European Communities that adopts or has adopted the euro as its lawful currency under the legislation of the European Union for European Monetary Union.

PBGC means the Pension Benefit Guaranty Corporation of the United States of America established pursuant to Section 4002 of ERISA, or any successor thereto.

Party means a party to this Agreement or any Finance Document.

Permitted Dividends means any dividends or distributions which the Borrower is permitted to pay pursuant to Clause 20.30 (Dividends).

Permitted Security Interests means:

in the case of paragraphs (b) to (g) inclusive provided that the amounts which give rise to such Security Interests are paid when due (unless expressly indicated above) or, if not paid when due are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves or security are at the relevant time maintained or provided to the extent required by GAAP), and provided further that such proceedings, whether by payment of adequate security into court or otherwise, do not give rise to a material risk of the relevant Vessel or any interest therein being seized, sold, forfeited or otherwise lost or of criminal liability on the Facility Agent or on any of the Lenders.

Plan means any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute) any Obligor or any ERISA Affiliate, and each such plan for the five (5) year period immediately following the latest date on which the Obligor or any ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

Pledge of Shares means (i) in respect of the Original Guarantors, the pledge of the issued share capital of the Original Guarantors to be granted by the Borrower in favour of the Security Trustee (and held by the Security Trustee on behalf of itself and the Lenders), together with any and all notices and acknowledgments entered into in connection therewith and (ii) in respect of an Additional Guarantor, the pledge of the issued share capital of that Additional Guarantor to be granted by the Borrower in favour of the Security Trustee (and held by the Security Trustee on behalf of itself and the Lenders), together with any and all notices and acknowledgments entered into in connection therewith.

Prime Rate means the rate of interest per annum publicly announced from time to time by Citibank, N.A. as its prime rate in effect at its principal office in New York City, United States of America. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

Pro Rata Share means:

(i)

the proportion which a Lender’s share of the Credits (if any) bears to all the Credits;

(ii)

if there is no Credit outstanding on that date, the proportion which its Commitment bears to the Total Commitments on that date; or

(iii)

if the Total Commitments have been cancelled, the proportion which its Commitment bore to the Total Commitments immediately before being cancelled.

(a)

whose share in the outstanding Credits and whose undrawn Commitments then aggregate more than eighty five (85) per cent. of the aggregate of all the outstanding Credits and the undrawn Commitments of all the Lenders;

(b)

if there are no Credits then outstanding, whose undrawn Commitments then aggregate more than eighty five (85) per cent. of the Total Commitments; or

Requisition Compensation means, in respect of a Vessel, all moneys or other compensation payable by reason of requisition for title to, or other compulsory acquisition of, that Vessel including requisition for hire.

Reserve Account means the interest bearing bank account to be opened in the name of the Borrower with the Account Bank with account number 10863688 and designated “Quintana Maritime Limited– Reserve Account”.

Reserve Account Charge means the charge to be granted by the Borrower in favour of the Security Trustee (and held by the Security Trustee on behalf of itself and the Lenders) in the form attached at Appendix 3, in respect of all monies standing to the credit from time to time of the Reserve Account, together with any and all notices and acknowledgements entered into in connection therewith.

Revised Total Commitments shall have the meaning given to it in Clause 8.1 (Automatic reduction and cancellation).

Rollover Loan means one or more Loans:

Screen Rate means, for LIBOR, and in respect of a Term, the percentage rate per annum for a period substantially the same as the relevant Term displayed on page 3750 of the Telerate screen. If the relevant page is replaced or the service ceases to be available, the Facility Agent may specify another page or service displaying the appropriate rate.

Secured Liabilities means all present and future obligations and liabilities (actual or contingent) of the Obligors to the Finance Parties or any of them under or in connection with any Finance Document.

Security Agreements means the Junior Security Documents, the Senior Security Documents and any other documents designated as such in writing by the Borrower and the Facility Agent.

Security Assets means any asset which is the subject of a Security Interest created by a Security Document.

Security Document means:

(a)

in respect of a person incorporated or formed outside England and Wales, any company or entity directly or indirectly controlled by such person, and for this purpose control means either the ownership of more than fifty (50) per cent. of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management whether by contract or otherwise; and

(b)

in respect of a person incorporated in England and Wales, a subsidiary within the meaning of Section 736 Companies Act 1985.

execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand.

(a)

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

(b)

requisition for title or other compulsory acquisition of that Vessel otherwise than by requisition for hire;

(c)

capture, seizure, arrest, detention, or confiscation of that Vessel by any person or government or by persons acting or purporting to act on behalf of any government or any other person which deprives the Owner of that Vessel, or as the case may be the Charterer, of the use of that Vessel, for more than sixty (60) days after that occurrence; and

(d)

requisition for hire of that Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Owner, or as the case may be the Charterer, of the use of that Vessel.

1.2

Construction

(i)

an amendment includes a supplement, novation, restatement or re-enactment and amended will be construed accordingly;

assets includes present and future properties, revenues and rights of every description;

an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration or notarisation under Applicable Law;

disposal means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly;

indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money;

a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality and their successors in title, permitted assigns and permitted transferees;

a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(b)

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:

(c)

Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability) or termination of that Finance Document.

(d)

Unless the contrary intention appears or unless the context otherwise permits:

(e)

Joint and several liability

(f)

The headings in this Agreement do not affect its interpretation.

Subject to the terms of this Agreement, the Lenders make available to the Borrower a revolving credit facility in a maximum aggregate amount equal to US$250,000,000. Subject to the provisions of Clause 2.3 (Purpose), each Loan shall be capable of being drawn up to the Maximum Facility Amount.

The Facility includes an option for the Borrower to request the Issuing Bank to issue Letters of Credit. Each Letter of Credit shall be capable of being requested in a principal amount of up to the lesser of:

2.3

Purpose

(a)

re-financing the Existing Credit Facility;

(b)

financing the Deposit Costs of the Additional Vessels;

(c)

financing the acquisition costs of the Additional Vessels;

(d)

funding working capital and the general corporate requirements of the Group, provided that any amounts drawn down to fund the working capital and general corporate requirements of the Group shall not exceed the sum of twenty million Dollars (US$20,000,000) outstanding at any one time;

(e)

the payment of Permitted Dividends; and/or

(f)

satisfying the obligations of the Borrower to the Issuing Bank under any Letters of Credit in relation to which the Issuing Bank is called upon to make a payment.

No Finance Party is obliged to monitor or verify the utilisation of any Loan or Letter of Credit.

Unless otherwise agreed by all the Finance Parties:

3.

CONDITIONS PRECEDENT

3.1

Conditions precedent documents

(i)

all of the documents and evidence set out in Schedule 2 Part 1 (Initial Conditions Precedent); and

(ii)

in the case of a Request relating to the borrowing of a Loan for the acquisition of an Additional Vessel, all of the documents and evidence set out in Schedule 2 Part 2 (Additional Guarantor Documents),

(b)

In the case of a Request for a Loan relating to Deposit Costs for an Additional Vessel (which Additional Vessel shall be a dry bulk carrier of less than 10 years of age), such Loan will not become due and payable by the Lenders until the Facility Agent has notified the Borrower and the Lenders that it has received:

The Facility Agent must give this notification to the Borrower and the Lenders promptly upon being so satisfied.

The obligations of each Lender to advance any Loan and the obligations of the Issuing Bank to issue any Letter of Credit are subject to the further conditions precedent that on both the date of the Request and the Utilisation Date for that Credit:

4.

UTILISATION – LOANS

4.1

Giving of Requests

4.2

Completion of Requests

Only one Loan may be requested in a Request.

(a)

The Facility Agent must promptly and in any event one (1) Business Day before the Rate Fixing Day notify each Lender of the details of the requested Loan and the amount of its share in that Loan.

(b)

The amount of each Lender’s share of the Loan will be its Pro Rata Share on the proposed Utilisation Date.

(c)

No Lender is obliged to participate in a Loan if, as a result, its share in the Loans then outstanding or in respect of which a Request has been issued would exceed its Commitment.

(d)

If the conditions set out in this Agreement have been met, each Lender must make its share in the Loan available to the Facility Agent by the Utilisation Date through its Facility Office.

(a)

The Borrower may request a Letter of Credit to be issued by giving to the Facility Agent a duly completed Request.

(b)

Unless the Facility Agent otherwise agrees, the latest time for receipt by the Facility Agent of a duly completed Request is 11.00 a.m., London time, three (3) Business Days prior to the proposed Utilisation Date.

(c)

Each Request is irrevocable.

A Request for a Letter of Credit will not be regarded as having been duly completed unless:

(i)

is a minimum amount of five hundred thousand Dollars (US$500,000);

(ii)

when aggregated with the Credits then outstanding or in respect of which a Request has been issued, equal to or less than the Maximum Facility Amount; and

(iii)

when aggregated with the Letters of Credit then outstanding or in respect of which a Request has been issued, equal to or less than the Maximum Letter of Credit Amount.