VL8 POOL INC. As Company -and- GENER8 ANDRIOTIS LLC As Participant

INDEX

CLAUSE

PAGE

1

DEFINITIONS

2

PURPOSE OF THE POOL – SHARING OF REVENUES AND LIABILITIES

All Third Party Charters shall, to the extent possible, be for the same period as the Contract of Affreightment that is being covered

3

PERIOD OF THE VESSEL’S PARTICIPATION IN THE POOL

4

POOL VESSEL TOTAL COSTS

5

VESSEL’S TOTAL COSTS UPON ENTRY

6

TIME CHARTER PARTY

7

COMMERCIAL MANAGEMENT AGREEMENT/MANAGEMENT FEE

8

DISTRIBUTION

9

ACCOUNTING

10

WORKING CAPITAL CONTRIBUTION AND RETENTION

11

POOL COMMITTEE

12

CALCULATION OF POOL NET REVENUE/LOSS; POOL GROSS REVENUE AND POOL EXPENSES

13

INSURANCE

14

ASSIGNMENT OF EARNINGS

15

WITHDRAWAL/TERMINATION

16

NATURE OF THE AGREEMENT

17

CONFIDENTIALITY

18

TOTAL LOSS

19

CHOICE OF LAW AND JURISDICTION

20

NOTICES

21

ENTIRE AGREEMENT

22

RIGHTS OF THIRD PARTIES

STANDARD POOL TIME CHARTER APPENDIX 3.2

[not applicable]

(1)

VL8 Pool Inc,  a ▇▇▇▇▇▇▇▇ Islands corporation having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (“the Company”) and

(2)

Gener8 ▇▇▇▇▇▇▇▇▇ LLC,  a ▇▇▇▇▇▇▇▇ Islands corporation having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands (“the Participant”)

(A)

The Participant is the owner or disponent owner of m.t. “Gener8 ▇▇▇▇▇▇▇▇▇” (currently Hull no H1356 at Shanghai Waigaoqiao Shipbuilding Co., Ltd.) (“the Vessel”);

(B)

The Company and the Participant have agreed that the Vessel should be entered into the pool defined below; and

(C)

The Vessel will be entered into the Pool by way of a time charter party between the Company and the Participant.

1

DEFINITIONS

1.1

In this Agreement the following terms shall have the following meanings:

(a)

directly or indirectly controlled by such person; or

(b)

of whose dividends or distributions on ordinary voting share capital such person is entitled to receive more than 50 per cent.

2

PURPOSE OF THE POOL – SHARING OF REVENUES AND LIABILITIES

2.1

The main objective of the Pool is to enter into arrangements for the commercial employment and operation of the Pool Vessels, arranged by the Company, so as to secure for the Pool Participants the highest earnings per Pool Vessel on the basis of pooling the revenue of the Pool Vessels and dividing it between the Pool Participants on the terms hereof.

2.2

The Company shall in its own name (as disponent owner) enter into contracts for the employment of the Pool Vessels. The Company shall have authority, as Time Charter Party owners, to negotiate and conclude spot charters, consecutive voyage charters, contracts of affreightment and time charters for performance by the Pool Vessels provided that the maximum possible period for such contracts shall not exceed seven (7) months.

2.3

All revenues earned from the operation of the Pool Vessels shall, after deduction of all costs involved in the operation of the Pool, be shared between the Pool Participants. The Company accordingly shall not participate in the financial result of the Pool’s activities but only serve as a vehicle for entering into contracts and for the marketing of the Pool.

2.4

The Pool shall operate as a profit unit, separately from any other activities of the Company.

2.5

The Company shall be entitled to enter into charters, as charterers, with third party owners or disponent owners (“Third Party Charters”), for the purpose of chartering in vessels from such third party owners or disponent owners (“Third Party Vessels”) in

3

PERIOD OF THE VESSEL’S PARTICIPATION IN THE POOL

3.1

The Vessel shall, subject to Clause 15 hereof, be placed at the disposal of the Company for a minimum period of twelve (12) months.

4

POOL VESSEL TOTAL COSTS

4.1

The Pool revenues shall be shared according to a distribution key based on the Pool’s total cost allocated to each Pool Vessel (“Total Costs”). The Total Costs allocated to the Vessel shall, as correctly as possible, reflect the relative operating costs of the Vessel compared with the other Pool Vessels.

4.2

The basis for the calculation of Total Costs is set out in Appendix 1. At the start of each year during January, the Company shall submit to the Pool Committee for its approval a proposal for the revised basis of calculations for the ensuing year commencing on 1 January (the “Annual Calculation Review”). Upon such approval by the Pool Committee, the Company will calculate or, as the case may be, recalculate Total Costs for each Pool Vessel in accordance with the revised principles of calculation which shall take effect for the whole calendar year from 1 January. The approved revised principles of calculation resulting from the Annual Calculation Review shall take effect as the new Appendix 1 to this Agreement with effect from 1 January of the relevant year, replacing the previous year’s version of Appendix 1.

4.3

The Vessel shall initially be allocated the Total Costs stated in 5.1 below (the “Initial Total Costs”). The Vessel’s performance shall be reviewed by the Technical Committee

(a)

retrospectively from the Delivery Date up to (but not including) the third Quarter Date occurring after the Delivery Date as definitive performance-based Total Costs; and

(b)

provisionally from the third Quarter Date occurring after the Delivery Date for the next three quarter periods until the results of the first Periodic Performance Review (as described in clause 4.4 below) are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of the Initial Performance Review under this sub-paragraph (b) will involve a retrospective Total Costs adjustment to the first (or in some cases, the first two) of the above three quarter periods,

4.4

Further on-going performance reviews of the Vessel based on the Vessel’s actual speed and consumption data shall be conducted on the fifth Quarter Date following the Delivery Date and on every second Quarter Date thereafter (each a “Periodical Performance Review”). Each Periodical Performance Review shall be based on the Vessel’s performance data from the previous twelve (12) months and following such review, the Vessel’s Total Costs shall be revised to take into account the results of such review. The results of each Periodical Performance Review shall be circulated to the Participant before, and apply on and from, the first Quarter Date falling after such Periodical Performance Review date. The new Vessel’s Total Costs determined from each Periodical Performance Review shall apply:

(a)

retrospectively for the two quarter periods ending on (but not including) the relevant Periodical Performance Review date as definitive performance-based Total Costs; and

(b)

provisionally for the next three quarter periods following such Periodical Performance Review date until the results of the next Periodic Performance Review are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of such Periodical Performance Review under this sub-paragraph (b) will involve a retrospective Total Costs adjustment to the first of the above three quarter periods,

5

VESSEL’S TOTAL COSTS UPON ENTRY

5.1

At the time that the Vessel enters into the Pool, the Total Costs that shall be allocated to the Vessel shall be US$ [TBC].

6

TIME CHARTER PARTY

6.1

The Participant/the Vessel shall at any and all times during the term of this Agreement comply with the conditions, terms and warranties expressed or implied in this Agreement and in the Time Charter Party which shall be deemed to be an integral part of this Agreement. The terms of the main Pool Participation Agreement shall prevail if a conflict should arise in the interpretation of the terms of the main Pool Participation Agreement and the terms of the Time Charter Party.

6.2

When a Participant enters a Vessel into the Pool where the Participant is the owner or the bareboat charterer of the Vessel then the time charter party between the Company and the Participant shall be in the form attached hereto at Appendix 3.1.

6.3

When a Participant enters a Vessel in the Pool where the Participant has the Vessel on time charter then the time charter party between the Company and the Participant shall be on back-to-back terms with the terms of the time charter between the Participant and the Vessel’s owners or disponent owners subject always to the cover page of Appendix 3.2.

6.4

The charter party entered into between the Company and the Participant, whether pursuant to clause 6.2 or clause 6.3 above, shall be the Time Charter Party. In the event that the Time Charter Party departs from the standard time charter terms of the Pool (attached hereto as Appendix 3.1) and such variations, in the opinion of the Pool Committee, have an effect on the earning potential of the Vessel, then such difference shall be reflected in the Total Costs allocated to the Vessel.

6.5

Where the Participant is not the head owner of the Vessel, the Participant is obliged to notify the Company in advance and as soon as practicable of any planned change of

6.6

All time under the Time Charter Party shall be recorded in GMT.

7

COMMERCIAL MANAGEMENT AGREEMENT/MANAGEMENT FEE

7.1

The Company has entered into a Commercial Management Agreement with VL8 Management Inc. (“the Manager”). The Commercial Management Agreement is annexed hereto as Appendix 2. The Company shall pay a management fee to the Manager (“the Management Fee”) in consideration of the services rendered by the Manager under the Commercial Management Agreement and an administration fee to the Manager (“the Administration Fee”).

7.2

The Management Fee shall be a one point two five (1.25) percent commission on all income received under all contracts (voyage charters, consecutive voyage charters, contracts of affreightment and time charters) entered into for the account of the Company in relation to the Vessel (apart from the Time Charter Party which forms part of this Agreement). The commission shall be calculated by reference to and upon all hire, freight, deadfreight and demurrage collected on such transactions.

7.3

The Administration Fee shall be three hundred and twenty five dollars (US$325) per day during the term of this Agreement in relation to the Vessel and the Administration Fee shall be payable on a monthly basis in arrears at the end of the first week of each month.

8

DISTRIBUTION

8.1

The Company shall invoice and collect all hire, freight, demurrage and other revenues due as a result of the Pool activities. The Company will, on behalf of the Pool, pay all expenses payable by it as the Charterer under the Time Charter Party and pay the

8.2

Distribution of time charter hire shall be made on a provisional basis, calculated on the basis outlined in Clause 12 hereof within the first week of each month. The provisional distribution to be based on the period up to the end of the previous month. The Participant’s entitlement to receive such provisional hire shall always be subject to the cash flow requirements of the Company.

8.3

The Company shall every quarter furnish the Participant with a provisional report on the financial result of the operation of the Pool for the preceding quarter and the Vessel’s earnings shall be adjusted taking into account the provisional monthly hire payments and the Vessel’s actual operating days in the Pool.

8.4

Further, the Company shall, not later than six (6) months after the end of its financial year (31 March) present to the Participant audited final accounts for the preceding financial year.

8.5

In the event that there is a breach by the Participant of its obligations under this Agreement (including the Time Charter Party), the Company has the right to set off an amount equal to the damages that the Company has incurred as a result of such breach against the distributions payable by the Company under clauses 8.1 and 8.2 or any working capital that is repayable by the Company under clause 10.

9

ACCOUNTING

9.1

The Manager shall keep such records and accounts as shall be necessary or appropriate for the proper operation of the Pool, including such accounts as shall be necessary for the calculation of distributions.

9.2

The Manager shall maintain systems of internal controls designed to provide reasonable assurance that transactions are properly executed sufficient to meet the requirements of an independent audit performed in accordance with International Auditing Standards.

9.3

The Manager shall no later than the 30th day following the end of each quarter, prepare and distribute to each Pool Participant unaudited accounts for the Pool (the “Pool Accounts”) and for each Pool Vessel for the period from 1 April to the end of the relevant quarter. These quarterly, unaudited Pool Accounts shall include aggregate quarterly accounts with separate calculations made for each quarter.

9.4

The quarterly Pool Accounts must show:

(a)

Net Pool Revenue and the total distributions made to Pool Participants to date;

(b)

Time charter equivalent income for all voyages and charters performed by each Pool Vessel;

(c)

The balance on the Company Bank Account and an appropriate reconciliation statement;

(d)

Outstanding freight/demurrage due in respect of contracts performed by Pool Vessels;

(e)

Off hire days for each Pool Vessel monthly and year to date;

10

WORKING CAPITAL CONTRIBUTION AND RETENTION

10.1

The Participant shall, upon delivery of the Vessel under the Time Charter Party deposit in the Company’s account a working capital for the Vessel. The working capital shall be determined by the Company and shall be US$1,500,000, being the equivalent of the market value of forty-five (45) days of average bunker consumption for the Vessel together with the estimated costs and disbursements associated with three (3) port calls. Where there are bunkers on board the Vessel on delivery of the Vessel by the Participant to the Company, the value of the bunkers (based on last prices paid by the Participant on a first-in, first-out basis as evidenced by supporting invoices and bunker delivery receipts) shall be set-off against the working capital to be paid by the Participant to the Company.

10.2

In the event that the cashflow position of the Company, as determined by the Manager and the Pool Committee, is insufficient to allow the Company to perform its commercial commitments, then the Pool Committee shall be entitled to recommend a further contribution to the working capital of the Company. The Participant shall contribute such further contribution to the Company within ten (10) days of receipt of

11

POOL COMMITTEE

11.1

The Pool Committee shall consist of one (1) representative for each Pool Participant, two (2) representatives appointed by the Company and two (2) representatives of the Manager. The two (2) representatives of the Manager shall not have the right to vote.

11.2

Each voting Pool Participant shall have a number of votes corresponding to the number of Pool Vessels controlled by such Pool Participant.

11.3

Members of the Pool Committee are elected for a one (1) year period. If a member of the Pool Committee is a representative of a Pool Participant who no longer has a Pool Vessel in the Pool, such member shall automatically cease to be a member of the Pool Committee.

11.4

The Pool Committee shall have the authority to make decisions in respect of the following matters as well as in respect of other matters put before by the Company:

(a)

approval of the basis for the calculation of Total Costs;

(b)

require further contributions to the working capital of the Company in accordance with Clause 10.2;

12

CALCULATION OF POOL NET REVENUE/LOSS; POOL GROSS REVENUE AND POOL EXPENSES

12.1

The Net Pool Revenue shall be equal to the Gross Pool Revenue (as detailed in Clause 12.2) less the Pool Expenses (as detailed in Clause 12.3) and subject to the adjustments described in Clause 12.4.

12.2

The Gross Pool Revenues consist of:

(a)

each Pool Vessel’s total voyage income (including without limitation freight, deadfreight and demurrage);

(b)

all freight, deadfreight, demurrage, charter hire or any other amount received for the Pool Vessels fixed on charters and any loss of hire insurance proceeds paid in respect of any of the Pool Vessels;

(c)

all freight, deadfreight, demurrage, charter hire or any other amount received by the Company in respect of Third Party Vessels;

(d)

currency exchange gains;

(e)

interest earned on funds held in the Company’s bank accounts or otherwise arising from the commercial operation of the Pool Vessels;

(f)

any damages or other amounts received in settlement of any claims relating to performance of any contracts of employment by Pool Vessels or vessels chartered in;

(g)

any voyage expenses related rebates; (h) any savings or rebates;

(h)

Pool’s share of any salvage money.

(a)

each Pool Vessel’s total voyage expenses, including, without limitation, agents, tugs, port expenses, wharfage, bunker, canal fees, voyage related COFR expenses, additional war risk premium etc;

(b)

all freight, deadfreight, demurrage, charter hire or any other amount paid by the Company under or in respect of Third Party Charters;

(c)

all commissions or brokerage payable in respect of all fixtures, charter parties and contracts of affreightment concluded on behalf of the Company;

(d)

all legal fees and any other out of pocket expenses whatsoever incurred by the Pool, the Company and the Manager in connection with the commercial operation and management of the Pool;

(e)

all fees, costs and expenses whatsoever incurred by the Pool and/or the Company, and/or by the Manager on behalf of the Pool and/or the Company, including, but not limited to, fees and expenses of independent consultants, professional advisors and representatives, supercargo, port captains, surveyors, superintendents or other specialists, whom the Manager may deem desirable to be employed from time to time in connection with the commercial operation of the Pool;

(f)

any insurance premium payable by the Company in accordance with the provisions of Clause 13;

(g)

all payments made by the Company pursuant to Clause 13.4 hereof;

(h)

provisions for contingencies in respect of any amount in dispute and/or doubtful in recovery;

(i)

any other expenses and charges whatsoever incurred by the Company and the Manager or in respect of any Pool Vessel or any chartered-in vessel for the Pool’s purposes directly and indirectly to the management, administration and operation of the Pool;

(j)

external auditor’s fees for review of the Company Accounts as provided in his Agreement;

(k)

remuneration payable to the Manager pursuant to Clause 7;

(l)

currency exchange losses;

(m)

interest and bank charges/commissions payable on the Company’s bank accounts.

(a)

results of voyages in progress;

(b)

amounts of voyage revenues earned by the Pool Vessels but not yet received;

(c)

apportionment of prepaid expenses not included in the voyages expenses as detailed hereof and of expenses paid after the relevant accounting period and attributable in whole or in part to such accounting period;

(d)

retention to cover claims in progress;

(e)

adequate provisions for any outstanding or contingent liability or obligation that would be considered (when accrued) as a Pool Expense.

13

INSURANCE

13.1

The Participant shall maintain P&I cover for the Vessel insured in a manner acceptable to the Company.

13.2

The Company will take out legal defence cover with a defence club acceptable to the Pool Committee.

13.3

The Company shall take out P&I charterer’s liability insurance and such other insurances as it may from time to time consider to be appropriate.

13.4

In the event that the Vessel is required to transit through areas within the Gulf of Aden or the Indian Ocean which are covered by the current Joint War Committee listings (together, the “IOR Risk Areas”) or the Vessel is required to call areas within the Gulf of Guinea in West Africa which are covered by the current Joint War Committee listings (the “WAF Risk Areas”  and together with the IOR Risk Areas, the “Risk Areas”) the following provisions shall apply:

(a)

subject to clause 13.4(j), all Pool Vessels transiting the Gulf of Aden will transit the Gulf of Aden under the first available naval convoy. Vessels remain on hire during waiting time;

(b)

subject to clause 13.4(j), in case the Participant requires the Vessel to transit the Gulf of Aden under a specific naval-led convoy, the Vessel will remain on-hire for a maximum of 24 hours waiting time. Thereafter all waiting time to be off-hire and bunkers consumed during such time to be for Participants’ account;

(c)

the Company will arrange for insurance cover for KnR (kidnap and ▇▇▇▇▇▇) on behalf of the Participant with a cap of US$8 million for each transit undertaken by the Vessel through the IOR Risk Areas. Any additional KnR cover required by the Participant shall be arranged by the Participant, at its cost;

(d)

the Company will arrange for insurance cover for loss of hire on behalf of the Participant for each transit undertaken by the Vessel through the Risk Areas for a

(e)

crew bonuses are reimbursable and will be paid by the Company up to 100% of the crew’s basic wages, per transit for the full crew (including officers), in line with the IBF MOA/ ITF Agreements, for a period limited to the number of days of transit through the IBF High Risk Area and if applicable, the IBF Extended Risk Zone. Any additional crew bonus paid ex-gratia by the Participant in respect of Risk Areas transits shall be for the Participant’s account;

(f)

the Participant shall take out the Additional war risk cover for the Vessel, and provide necessary invoices and proof of payment to the Company for reimbursement by the Company to the Participant. The Participant shall procure discounts from their war risk underwriters for the fact that kidnap and ▇▇▇▇▇▇ and loss of hire insurance have been taken out separately and if applicable, to take into account the presence of armed or unarmed guards on board the Vessel and other Vessel hardening measures undertaken for the Risk Area transit;

(g)

the Company shall reimburse the Participant towards all or part of the cost of various anti-piracy vessel hardening materials (being razor wire, personal protection equipment, anti-blast film and sandbags) to be acquired by the Participant and utilised on the Vessel during the Risk Area transit, up to a limit of US$3,500, subject to the Participant providing necessary invoices and proof of payment. Specifically in respect of razor wires and sandbags only which are subject to wear and tear (“Qualifying Hardening Materials”), the Company shall reimburse the replacement of such items up to the monetary limit advised above in the following circumstances and under the following conditions:

(h)

the Participant shall have the option of taking armed guards on the Vessel for Risk Area transits, subject to the conditions set out in clauses 13.4(i) and 13.4(j). If the Participant so wishes to take armed guards, the Company will arrange for the appointment of and pay for the cost of the armed guards on behalf of the Participant as long as such armed guards are ISO 28007 certified by one of the UKAS registered certifying bodies. In the case that the Participant insists on using a different armed guards service from that of the Company’s preferred provider, then the Company agrees to reimburse the cost of the armed guards but such reimbursement shall be limited to the price that could have been obtained from using the Company’s preferred armed guards service provider and provided that such armed guards are ISO 28007 certified by one of the UKAS registered certifying bodies. The reimbursement of the cost of the Participant’s own armed guards is subject to the Participant providing the necessary invoices and proof of payment. The procurement of armed guards is subject to local laws

(i)

all waiting time and deviation for picking up and dropping off armed guards shall be for the account of the Company provided that the Company receives approval from the Participant for the use of the Company’s preferred armed guards service provider or confirmation of appointment of the Participant’s own choice of other armed guards service provider promptly and in a timely manner so as not to cause delay to the Vessel’s itinerary;

(j)

the conditions for armed guards being taken on the Vessel for a Risk Area transit, are that:

(k)

it is further agreed that the Participant / Vessel will follow and implement the latest edition of BMP when in or transiting the Risk Areas;

(l)

other than as set out in the above paragraphs of this clause 13.4, the Company will not cover for any other security or additional insurance measures adopted by the Participants; and

(m)

the above provisions of this clause 13.4 are based on the current situation in the Gulf of Aden, the Indian Ocean and the Gulf of Guinea, and this will be subject to review as and when the situation changes.

(a)

the Vessel has been off-hire for periods totalling more than thirty (30) days over the last six (6) months;

(b)

the Vessel’s or Participant’s performance of its tasks under the contract for which it has been used or its application or non-application of standard industry practices is, in the reasonable opinion of the Company, below the standard

(c)

the Vessel is, in the reasonable opinion of the Company, commercially untradeable to a significant proportion of the oil major company customers of the Pool/Company for any reason;

(d)

the Participant is in breach with respect to its obligations under this Agreement (including the terms of the Time Charter Party) and the breach is of a nature which, in the reasonable opinion of the Company, warrants a cancellation of this Agreement;

(e)

the Participant is insolvent and/or is subject to debt negotiations, bankruptcy and/or similar proceedings and/or is unable to or admits its inability to pay its debts as they fall due;

(f)

except where clause 13.4 applies, the Vessel is captured, arrested, detained or confiscated and the Participant has not, within a period of fifteen (15) days in receipt of notification in writing from the Company thereof, remedied such situation;

(g)

if the Participant or any of its Affiliates becomes a Sanctioned Person during the course of this Agreement; and

(h)

if the Vessel is no longer controlled (whether by way of ownership or charter) by the Participant.

(a)

required to allow a Disclosure Party to report its financial performance to its shareholders and/or (for the purposes of assessing the assets and income of such persons) to any present investors or, on a confidential basis, any prospective investors or lenders to any of such persons;

(b)

required to allow a Disclosure Party to make disclosures on a confidential basis to present or prospective investors in or lenders to any such entity (or their respective advisers) or in connection with any merger, acquisition, disposal or divestment or the financing of any of the same or any holding in any such entity;

(c)

required to allow or in contemplation of the initial public offering or any private placement or any further issue or offering of securities (including for the avoidance of doubt in connection with any merger, acquisition, disposal or divestment and whether or not the same are to be publicly traded) in a Disclosure Party, including for the avoidance of doubt, filing any registration statements or other documentation with the Securities and Exchange Commission or any other regulatory authorities for such purposes;

(d)

disclosed to the directors, board observers, employees, officers, agents, professional advisers, insurers, auditors or bankers of any party to the extent necessary or reasonable for such persons to obtain the same for the purpose of discharging their responsibilities

(e)

disclosed to vest the full benefit of or to enforce any rights conferred by this Agreement on any party to the same or in connection with any legal proceedings arising out of or in connection with it; or

(f)

required to be disclosed (whether or not such requirement has the force of law) to a court or other authority of competent jurisdiction or taxation authority, governmental, official or regulatory or supervisory body or authority or to inspectors or others authorised by such a body or authority or as otherwise required by the law of any relevant jurisdiction or to any relevant securities exchange or as otherwise required by the law of any relevant jurisdiction.

(a)

where the amount claimed by the claimants is less than United States Dollars Fifty thousand (US$50,000), excluding interest, the reference shall be to a sole arbitrator and the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure;

(b)

in any case where the LMAA procedures referred to above do not apply, the reference shall be to three arbitrators (one to be appointed by each of the parties and the third by the arbitrators so chosen) in accordance with the LMAA terms in force at the relevant time.

SIGNED by

)

on behalf of GENER8 ▇▇▇▇▇▇▇▇▇ LLC )

SIGNED by

)

▇▇▇▇▇▇ ▇▇▇

Director

on behalf of VL8 POOL INC

)

1.

The individual weightings of the operating conditions of the vessels, which are:

Ballast

Laden

Load

Discharge

Idle

20%

50%

5%

5%

20%

2.

A  Pool Reference Speed of 10.00kn in Ballast and 13.00kn in Laden, which will provide for the distance that each vessel will be evaluated on over a 24hr period.

3.

Bunker Prices of $480 per mt for HFO and $735 per mt for MGO

§

Bunker Prices will be determined basis the average of the bunker prices for the ports of Rotterdam and Singapore as published by Platts.

§

The average bunker price for the IFO380 fuel type will also be adjusted basis the SECA area percentage of MGO usage.

§

On a provisional basis, the Bunker Prices for each port will be based on the average of the last 6 months of spot prices and 6 months of forward prices.

§

The provisional Bunker Prices will be reviewed every 6 months just prior to 1st January and 1st July of each year and will be applicable for the following 6 month period. The 1st July provisional Bunker Prices will be informed to all Pool Participants.

§

In addition, at the end of each 6 month period, the Pool will finalise the Bunker Prices for that period by inputting the actual average spot bunker prices for Singapore and Rotterdam during that period into the above calculation method. Each Vessel’s Total Cost for that prior 6 month period will therefore be adjusted retrospectively.

§

The calculation method for the provisional Bunker Prices for the 1st Half of 2015 is as follows:

Singapore

Rotterdam

  VL8 POOL

IFO380*

MGO

  Period

IFO380

MGO

IFO380

MGO

  SECA*

5%

480

735

  6M Spot

562

844

530

802

  Period from Jun14 to Nov14

  6M Fwd

401

643

373

649

  Period from Dec14 to May15

  Average

482

743

452

725

Any references to “Pool Earning Points” or “Initial Pool Points” in the Pool Agreement shall be interpreted as references to the Vessel’s Total Cost or where applicable the Vessel’s provisional Total Cost.

3

TRADING DAYS

NET INCOME

TCE $/DAY

DISTR.TEC $/DAY

VESSEL

VSL MARGIN

155.00

$3,100,000

20,000 (*)

$20,000

Vessel #1

-500.00

31.00

$573,500

$18,500

$19,500

Vessel #2

0.00

31.00

$612,250

$19,750

$20,000

Vessel #3

500.00

31.00

$635,500

$20,500

$20,500

Vessel #4

800.00

31.00

$612,250

$19,750

$20,800

Vessel #5

-800.00

31.00

$666,500

$21,500

$19,200

2

VESSEL

DAILY COST

TTL ADJ. (%)

TTL ADJ. ($)

TOTAL COST

VSL MARGIN

Vessel #1

13,500.00

2.50%

500.00

13,000.00

-500.00

Vessel #2

12,500.00

0.00%

0.00

12,500.00

0.00

Vessel #3

13,000.00

5.00%

1,000.00

12,000.00

500.00

Vessel #4

12,000.00

1.50%

300.00

11,700.00

800.00

Vessel #5

13,000.00

-1.50%

-300.00

13,300.00

-800.00

1

POOL AVG. TOTAL COST

12,500.00

(1)

Pool Avg. Total Cost = Weighted average of Vessel’s Total Cost and Trading Days

(2)

VSL Margin = Pool’s Average Cost - Vessel’s Total Cost

(3)

Vessel’s Distr. TCE ($/Day) = VSL Margin + Pool’s Average TCE (*)

TRADING AREAS

WWIDE WITHIN IWL/ITF AND USUAL EXCLUSIONS

0.0%

OIL MAJOR APPROVALS

2 OR MORE OIL MAJOR APPROVALS

0.0%

BELOW 2 APPROVALS

-15.0%

AGE

BELOW 15 YEARS OF AGE

0.0%

OVER 15 YEARS OF AGE

-15.0%

§

Up to and including Beaufort Scale 5 (As provided by FleetWeather)

§

Up to and including ▇▇▇▇▇▇▇ Sea Scale 5 (As provided by FleetWeather)

§

Ocean Currents (As provided by FleetWeather)

§

Between 0.5 knots against the vessel (-0.5) and 0.5 knots in favour of the vessel (+0.5)

§

Minimum length of a qualifying passage to be 48 hours

§

Minimum amount of qualifying data from any qualifying passage to be 24 hours

§

Instructed Speed Ranges of:

Ballast (kts)

Laden (kts)

▇▇▇ ▇▇▇▇  

10.00 13.00

12.00 13.50

§

Manoeuvring operations

§

Following Convoys

§

Timed Arrivals

§

Search & Rescue operations

§

Ocean Currents

§

FleetWeather obtains our ocean current data from a high resolution, declassified ocean current model called HYCOM (▇▇▇▇▇://▇▇▇▇▇.▇▇▇). Although we take into consideration any ocean current reports from the Master, the ‘Current Factor’ information within the performance reports is derived from complex trigonometric algorithms that incorporate the course of the vessel and the impact angles of the ocean currents over a given segment distance (noon report to noon report for example). The ‘Current Factor’ will either have a positive or negative effect on the performance speed of the ship.

CONTENTS

CLAUSE

PAGE

1.

DEFINITIONS

2.

APPOINTMENT

3.

BASIS OF AGREEMENT

4.

COMMERCIAL MANAGEMENT

5.

COMMISSION

6.

ACCOUNTS

7.

COMPANY’S UNDERTAKINGS

8.

LIABILITY

9.

TERMINATION

10.

GENERAL

11.

CONFIDENTIALITY

12.

NOTICES

13.

LAW AND JURISDICTION

(1)

VL8 MANAGEMENT INC. with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (“the Manager”), and

(2)

▇▇▇ ▇▇▇▇ INC. with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (“the Company”),

(A)

The Company operates a pool of tankers (the “Pool”); and

(B)

The Company does not itself have the personnel required to perform the various tasks involved in the operation of the Pool; and

(C)

The Manager has the necessary personnel and other resources to undertake the management of the commercial affairs of the Pool, including preparing accounts for the Pool and the Company, and the Company wishes to appoint the Manager as the commercial manager of the Vessels in accordance with the terms of this Agreement.

1

DEFINITIONS

2

APPOINTMENT

2.1

With effect from the date hereof and continuing unless and until terminated as provided herein, the Company hereby appoints the Manager as its exclusive provider of Management Services and the Manager hereby accepts such appointment.

3

BASIS OF AGREEMENT

3.1

Subject to the terms and conditions of this Agreement, during the period of this Agreement, the Manager shall carry out the Management Services in respect of any Vessel as agents for and on behalf of the Company.

3.2

The Manager shall have authority to take such actions as it may from time to time in its absolute discretion consider to be necessary to enable it to perform its obligations under this Agreement in accordance with sound commercial management and/or brokerage practice for vessels similar to the Vessels and the market in which the Vessels operate or will operate.

3.3

The Company agrees that the Manager shall not be restricted from carrying on or being concerned or interested in other enterprises either for its own account or on behalf of parties for whom it may be acting as commercial manager, charter broker or otherwise.

4

COMMERCIAL MANAGEMENT

4.1

In consideration of the Management Services Commission payable by the Company to the Manager pursuant to Clause 5 below, the Manager shall provide the commercial operation of the Vessels, as required by the Company, which includes, but is not limited to, the following functions:

(a)

providing marketing services on behalf of the Company in respect of the Vessels, including, but not limited to, seeking, negotiating and concluding time charters no longer than three (3) months, voyage charters and/or contracts of affreightment in respect of the Vessels. However the Manager may negotiate and conclude time charters longer than three (3) months if mutually agreed by the Company, such agreement not to be unreasonably withheld;

(b)

arranging the invoicing of all hire and/or freight revenues or other monies of whatsoever nature to which the Company may be entitled arising out of or otherwise in connection with the Vessels. For the avoidance of doubt in the receipt and handling of any funds of the Company, the Manager shall have fiduciary responsibilities with respect thereto in accordance with normal vessel agency practices and applicable law. Any discounts or rebates that are, or become, available are to be credited to the Company;

(c)

providing voyage estimates and accounts and calculating and collecting hire, freights, demurrage and/or despatch monies due from or due to the charterers of the Vessels;

(d)

issuing of voyage instructions, supervising and arranging bunkering, monitoring of voyage performance, speed and use of weather routing services, if deemed necessary by the Manager;

(e)

to approve letters of indemnity (“LOI”) provided that such ▇▇▇▇ are in conformity with the charterparties entered into between the Company and each of the Pool Participants;

(f)

arranging the scheduling of the Vessels according to the terms of the Vessels’ employment;

(g)

appointing agents and negotiating tug-boat service contracts;

(h)

arranging surveys associated with the commercial operation of the Vessels;

(i)

maintaining such documents, records, accounts, statements and supporting vouchers (if any), obtained in connection with the Management Services (all of which documents, records, accounts, statements and supporting vouchers (if any) are and will remain the sole property of the Manager) and making them available to the Company upon request, including, but not limited to, any of the foregoing which the Manager deems necessary or advisable in order to comply with any charter or other contract in effect with respect to the Vessels from time to time; and

(j)

arranging kidnap and ▇▇▇▇▇▇ insurance as and when required on behalf of the owners and same to accounted as pool expenses.

4.2

To submit all necessary financial, accounting and business reports to the Company so as to enable the Company to comply with its reporting obligations to the Pool Participants in accordance with the terms of the Pool Participation Agreements entered into between the Company and the Pool Participants. The Manager expressly acknowledges that it has seen copies of such Pool Participation Agreements and has full notice of such obligations.

4.3

In the performance of its obligations under this Agreement, the Manager shall only be required to spend the amount of time and attention on the Vessels that a commercial manager would reasonably be expected to spend in the proper discharge of its obligations under this Agreement.

5

COMMISSION

5.1

The Company shall pay to the Manager a commission fee equal to one point two five per cent (1.25%) of all hire, demurrage, freights, any freight accessories and miscellaneous revenues arising from or in connection with the employment or operation of the Vessels during the term of this Agreement (apart from the time charters which form part of the Pool Participation Agreement entered into between the Company and the Pool Participants) (the “Management Services Commission”).

5.2

The Management Services Commission shall be payable by the Company to the Manager on the dates when such hire, demurrage, freights, freight accessories or miscellaneous revenues (as the case may be) is due to be paid.

5.3

The Company shall pay an administration fee equal to three hundred and twenty five dollars ($325) per day per Vessel during the term of this Agreement and such administration fee shall be payable on a monthly basis in arrears at the end of the first week of each month.

5.4

The Company hereby authorises the Manager to deduct the Management Services Commission from any amounts received by the Manager arising from or in connection with the employment or operation of the Vessels.

5.5

The Parties agree that any Management Services Commission payable by the Company to the Manager in accordance with this Agreement shall remain payable for the duration of any underlying charterparty, contract of affreightment or fixture of a Vessel notwithstanding the termination of this Agreement for any reason whatsoever prior to the expiry of such charterparty, contract of affreightment or fixture.

6

ACCOUNTS

6.1

The Management Services Commission and all expenses incurred by the Manager in respect of the provision of the Management Services under the terms of this Agreement on behalf of the Company shall in any event remain payable by the Company to the Manager on demand.

6.2

The Manager shall keep proper books, records and accounts related to the Vessels and shall make the same available for inspection and audit on behalf of the Company at such time as may be mutually agreed.

7

COMPANY’S UNDERTAKINGS

7.1

The Company undertakes as follows:

(a)

to indemnify and hold the Manager and/or its appointed agent harmless from all consequences or liabilities in signing bills of lading, issuing letters of indemnity in lieu of bills of lading or changes of destination from bills of lading or other documents relating to the relevant charterparty, contract of affreightment or fixture for any Vessel or from any irregularity in documents supplied to the Manager and/or its appointed agent or from complying with orders given to it;

(b)

to immediately notify the Manager of the Company’s decision to re-deliver a Vessel which shall include details of the delivery date, port of delivery or range of ports of delivery, any pre-delivery inspections and any other information which may affect the operations or employment of such Vessel. Following receipt of such notice, the Manager shall not contract to employ that Vessel for periods in excess of the intended delivery date of that Vessel as specified in the Company’s notice to the Manager as aforesaid;

(c)

the Company shall notify the Manager of any decision made by the Pool Committee; and

(d)

the Manager shall at his own expense provide all office accommodation, equipments, stationeries and staff required for the provision of its services hereunder.

8

LIABILITY

8.1

Force Majeure

8.2

Liability to Company

8.3

Indemnity

8.4

“Himalaya”

9

TERMINATION

9.1

Termination on Notice

9.2

Manager’s Default

9.3

Company’s Default

9.4

Extraordinary Termination

(a)

Upon the re-delivery of a Vessel or if a Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned, this Agreement shall continue in full force and effect in relation to the other Vessel(s) only

(b)

For the purposes of this Clause 9.4:

(i)

the date upon which a Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Company ceases to be charterer of that Vessel;

9.1

This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either Party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if a Party suspends payment, ceases to carry on business or make any special arrangement or composition with its creditors.

9.2

The termination of this Agreement shall be without prejudice to all rights accrued by and between the Parties under this Agreement prior to the date of such termination, including, but without limitation, the Manager’s rights under Clause 5.1 above.

10

GENERAL

10.1

No variation of this Agreement shall be effective unless given in writing and signed by or on behalf of the Parties.

10.2

If any term or provision in this Agreement is held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the enforceability of the remainder of this Agreement shall not be affected.

10.3

Neither this Agreement nor any of the rights, obligations or duties arising under this Agreement may be assigned or transferred by either Party without the prior written consent of the other Party.

10.4

The arrangements contemplated by this Agreement are not intended to and shall not (and shall not be construed so as to) constitute any kind of partnership between the Parties.

10.5

No neglect, delay or indulgence on the part of either Party in enforcing any term of this Agreement will be construed as a waiver of that term and no single or partial exercise by either Party of any rights or remedy under this Agreement will preclude or restrict the further exercise or enforcement of any such right or remedy or any other rights or remedies under this Agreement.

10.6

This Agreement, and the documents referred to in it, shall not form part of the Pool Participation Agreements but shall be exhibited to such Agreements as Appendix 2.

10.7

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

10.8

This Agreement can be executed in counterparts, each of which when executed and delivered is an original and all of which together evidence the same agreement.

11

CONFIDENTIALITY

11.1

Each Party shall keep, and shall seek to ensure its officers, employees, agents and consultants keep confidential all information gained by it or them during the term of this Agreement concerning the business and affairs of the other Party (and the terms of this Agreement) and will not disclose or use the same for any purpose whatsoever except:

(a)

as required by any applicable law; and

(b)

as reasonably required to be disclosed to its professional advisers, including without limitation, its lawyers and auditors.

12

NOTICES

12.1

Any notice given under this Agreement shall be in writing and should be delivered personally or sent by first class pre-paid post or by fax to the Parties’ respective addresses set out below in this Agreement or as otherwise notified by them from time to time in accordance with the provisions of this Clause

12.2

The address and fax number (and the person for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered in connect with this Agreement is:

To the Manager:

VL8 Management Inc.

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇▇ ▇▇▇▇▇

Fax:

+ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇

Email:

▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

Attn:

▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Copy:

Oman Shipping Company S.A.O.C.

▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇

▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇

Fax:

+ ▇▇▇ ▇▇▇▇▇▇▇▇

Email:

▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇.▇▇

Attn:

▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇

To the Company:

VL8 Pool Inc.

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

▇▇ ▇▇▇▇▇

Fax:

▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇

Email:

▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

Attn:

▇▇▇ ▇▇▇▇▇▇

In the absence of evidence of earlier receipt, a notice or other communication is deemed given:

(a)

If delivered personally, when left at the address referred to in Clause 13.2 above;

(b)

If sent by post, on the third (3rd) Business Day next following the day of posting it;

(c)

If sent by fax, on completion of its transmission, if transmitted during normal business hours (9.30am – 5.30pm) on any Business Day. A notice given by a fax transmitted after midnight but on or before 9.30am on Business Day shall be deemed to be given at 9.30am on that Business Day and a notice by a fax transmitted after 5.30pm but on or before midnight on any Business Day shall be deemed to be given at 9.30am on the following Business Day.

13

LAW AND JURISDICTION

13.1

This Agreement shall be governed by English law and any dispute arising out of or in connection with this Agreement which cannot be settled by mutual agreement of the Parties shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

13.2

Save as provided otherwise in this Clause 13, the arbitration shall be conducted in accordance with the London Maritime Arbitrators’ (LMAA) Terms current at the time when the arbitration is commenced.

13.3

The reference will be to a sole arbitrator if the Parties can agree upon the identity of a sole arbitrator within fourteen (14) days following a Party giving notice in writing to the other Party of its intention to commence arbitration proceedings, failing which the reference shall be to three (3) arbitrators.

13.4

In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

Signed by

)

For and on behalf of

)

VL8 MANAGEMENT INC.

)

/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Signed by

)

Director

For and on behalf of

)

▇▇▇ ▇▇▇▇ INC.

)

/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇

▇▇▇▇▇ ▇ ▇▇▇▇▇▇

Director

Code word for this Charter Party

Time Charter Party

“SHELLTIME 4”

LONDON 18 December 2015

Issued December 1984

IT IS THIS DAY AGREED between Gener8 ▇▇▇▇▇▇▇▇▇ LLC

of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands (hereinafter referred to as “Owners” ), being owners of the

good tanker vessel called “Gener8 ▇▇▇▇▇▇▇▇▇” (currently Hull no H1356 at Shanghai Waigaoqiao Shipbuilding Co., Ltd.)

(hereinafter referred to as “the vessel” ) described as per Clause 1 hereof and VL8 POOL INC.

a ▇▇▇▇▇▇▇▇ Islands corporation having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (hereinafter referred to as “Charterers”):

Description and

1

At the date of delivery of the vessel under this charter

Condition of

(a)

she shall be classed by [TBC]

Vessel

(b)

she shall be in every way fit to carry

Dirty petroleum products, crude oil and all cargoes, maximum three (3) grades within the vessel’s natural segregation permitted by the vessel’s class and coating manufacturer’s resistance list.

(c)

she shall be tight, staunch, strong, in good order and condition, and in every way fit for the service, with her machinery, boilers, hull and other equipment (including but not limited to hull stress calculator and radar) in a good and efficient state;

(d)

her tanks, valves and pipelines shall be oil-tight;

(e)

she shall be in every way fitted for burning (See additional clause 52)

at sea - fueloil with a maximum viscosity of Centistokes at 50 degrees Centigrade/any commercial grade of fuel oil (“ACGFO”) for main propulsion, marine diesel oil/ACGFO for auxiliaries in port - marine diesel oil/ACGFO for auxiliaries;

(f)

she shall comply with the regulations in force so as to enable her to pass through the Suez and Panama Canals by day and night without delay;

(g)

she shall have on board all certificates, documents and equipment required from time to time by any applicable law to enable her to perform the charter service without delay;

(h)

she shall comply with the description in Q88 and time charter description appended hereto, provided however that if there is any conflict between the provisions of Q88 and time charter description and any other provision, including this Clause 1, of this charter such other provision shall govern.

Shipboard

2

(a)

At the date of delivery of the vessel under this charter

Personnel

(i)

she shall have a full and efficient complement of master, officers and crew for a vessel of her

and their Duties

tonnage, who shall in any event be not less than the number required by the laws of the flag state and who shall be rained to operate the vessel and her equipment competently and safely;

(ii)

all shipboard personnel shall hold valid certificates of competence in accordance with the requirements of the law of the flag state;

(iii)

all shipboard personnel shall be trained in accordance with the relevant provisions of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978;

(iv)

there shall be on board sufficient personnel with a good working knowledge of the English language to enable cargo operations at loading and discharging places to be carried out efficiently and safely and to enable communications between the vessel and those loading the vessel or accepting discharge therefrom to be carried out quickly and efficiently.

(b)

Owners guarantee that throughout the charter service the master shall with the vessel’s officers and crew, unless otherwise ordered by Charterers,

(i)

prosecute all voyages with the utmost despatch;

(ii)

render all customary assistance; and

(iii)