LOAN AGREEMENT for a Loan of up to US$33,400,000 to AMORGOS MARITIME INC. KIMOLOS MARITIME INC. MILOS MARITIME INC. MYKONOS MARITIME INC. and SYROS MARITIME INC. provided by THE ROYAL BANK OF SCOTLAND PLC

Clause

Page

1

Purpose and definitions

1

2

The Commitment and the Loan

28

3

Interest and Interest Periods

30

4

Repayment and prepayment

32

5

Fees, commitment commission and expenses

36

6

Payments and taxes; accounts and calculations

37

7

Representations and warranties

38

8

Undertakings

43

9

Conditions

49

10

Events of Default

50

11

Indemnities

54

12

Unlawfulness and increased costs

55

13

Security and set-off

56

14

Operating Accounts

57

15

Assignment, transfer and lending office

58

16

Notices and other matters

59

17

Governing law and jurisdiction

63

Schedule 1 Form of Drawdown Notice

65

Schedule 2 Documents and evidence required as conditions precedent

67

Schedule 3 Pre-delivery Advances per Ship

80

Schedule 4 Form of Pre-delivery Security Assignment

81

Schedule 5 Form of Corporate Guarantee

82

Schedule 6 Form of Personal Guarantee

83

Schedule 7 Form of Master Swap Agreement

84

Schedule 8 Form of Master Agreement Security Deed

85

Schedule 9 Form of Insurance Letter

86

Schedule 10 Form of Interest Period Letter

87

Schedule 11 Calculation of Additional Cost

89

Schedule 12 Conditions subsequent

90

(1)

AMORGOS MARITIME INC., KIMOLOS MARITIME INC., MILOS MARITIME INC., MYKONOS MARITIME INC. and SYROS MARITIME INC. as joint and several Borrowers; and

(2)

THE ROYAL BANK OF SCOTLAND PLC as Bank.

1

Purpose and definitions

1.1

Purpose

This Agreement sets out the terms and conditions upon and subject to which the Bank agrees to make available to the Borrowers, jointly and severally, a loan of up to Thirty three million four hundred thousand Dollars ($33,400,000) in up to twenty (20) Advances to be used for the purpose of financing and/or refinancing part of the construction and acquisition cost of the Newbuildings.

1.2

Definitions

In this Agreement, unless the context otherwise requires:

“Additional Cost” means, in relation to any period, a percentage calculated for such period at an annual rate determined in the manner set out in schedule 11;

“Advances” means each borrowing of a proportion of the Commitment by the Borrowers or (as the context may require) the principal amount of such borrowing, it includes (i) each Amorgos Pre-delivery Advance, (ii) the Amorgos Delivery Advance, (iii) each Kimolos Pre-delivery Advance, (iv) the Kimolos Delivery Advance, (v) each Milos Pre-delivery Advance, (vi) the Milos Delivery Advance, (vii) each Mykonos Pre-delivery Advance, (viii) the Mykonos Delivery Advance, (ix) each Syros Pre-delivery Advance and (x) the Syros Delivery Advance, and:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, it means the Amorgos Advances;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, it means the Kimolos Advances;

(c)

in relation to the Milos Ship and the Milos Tranche, it means the Milos Advances;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, it means the Mykonos Advances; or

(e)

in relation to the Syros Ship and the Syros Tranche, it means the Syros Advances,

and “Advance” means any of them;

“Amorgos Advances” means, together, the Amorgos Pre-delivery Advances and the Amorgos Delivery Advance and “Amorgos Advance” means any of them;

“Amorgos Borrower” means Amorgos Maritime Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Amorgos Construction Cost” means the aggregate of (a) the Amorgos Contract Price and (b) the Amorgos Supervision Cost;

“Amorgos Contract” means the shipbuilding contract dated 6 February 2005, as amended by addendum No. 1 dated 31 March 2005, addendum No. 2 dated 27 April 2005 and addendum No. 3 dated 27 May 2005, all made between the Builders and the Amorgos Borrower, as may be

further amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the construction and sale by the Builders, and the purchase by the Amorgos Borrower, of the Amorgos Ship;

“Amorgos Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Amorgos Contract to be given by the Builders in the form scheduled to the Amorgos Pre-delivery Security Assignment;

“Amorgos Contract Price” means Six million eight hundred thousand Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by the Amorgos Borrower to the Builders pursuant to the Amorgos Contract as the contract price for the Amorgos Ship;

“Amorgos Deed of Covenant” means the first priority deed of covenant and/or general assignment collateral to the Amorgos Mortgage executed or (as the context may require) to be executed by the Amorgos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Amorgos Delivery Advance” means an Advance of up to Three million seven hundred and fifty seven thousand five hundred Dollars ($3,757,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in part the final instalment of the Amorgos Contract Price and the final instalment of the Amorgos Supervision Cost, each falling due on the Delivery Date for the Amorgos Ship and (b) (as to the balance) refinancing the payment of any other part of the Amorgos Construction Cost previously made by the Amorgos Borrower and not already financed or refinanced under the terms of this Agreement;

“Amorgos First Advance” means an Advance of up to Four hundred and seventeen thousand five hundred Dollars ($417,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the second instalment of the Amorgos Contract Price and the second instalment of the Amorgos Supervision Cost, each falling due before the Delivery Date for the Amorgos Ship as set out in schedule 3;

“Amorgos Management Agreement” means the management agreement made or (as the context may require) to be made between the Amorgos Borrower and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Amorgos Ship;

“Amorgos Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Amorgos Ship executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Amorgos Mortgage” means the first priority or (as the case may be) preferred mortgage of the Amorgos Ship executed or (as the context may require) to be executed by the Amorgos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Amorgos Operating Account” means an interest bearing Dollar account of the Amorgos Borrower opened or (as the context may require) to be opened by the Amorgos Borrower with the Bank and includes any sub-accounts thereof and any other account designated in writing by the Bank to be an Amorgos Operating Account for the purposes of this Agreement;

“Amorgos Pre-delivery Advances” means, together, the Amorgos First Advance, the Amorgos Second Advance and the Amorgos Third Advance and “Amorgos Pre-delivery Advance” means any of them;

“Amorgos Pre-delivery Security Assignment” means the assignment of the Amorgos Contract, the Amorgos Refund Guarantees and the Amorgos Supervision Contract executed or (as the context may require) to be executed by the Amorgos Borrower in favour of the Bank in the form set out in schedule 4;

“Amorgos Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Amorgos Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Amorgos Refund Guarantee to be given by a Refund Guarantor in the form scheduled to the Amorgos Pre-delivery Security Assignment and “Amorgos Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Amorgos Refund Guarantees” means, together, the letter of guarantee no. LGD6600200500007 dated 9 June 2005 issued by Bank of Communications, Fuzhou Branch as Refund Guarantor in respect of certain of the Builders’ obligations under the Amorgos Contract and any other letters of guarantee to be issued by a Refund Guarantor in respect of the Builders’ obligations under the Amorgos Contract, pursuant to the Amorgos Contract or any agreement supplemental to the Amorgos Contract, and any extensions, renewals or replacements to or of any such guarantee(s), in each case in form and substance acceptable to the Bank in its sole discretion and “Amorgos Refund Guarantee” means any of them;

“Amorgos Second Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in full the payment of the third instalment of the Amorgos Contract Price falling due before the Delivery Date for the Amorgos Ship as set out in schedule 3 and (b) (as to the balance) refinancing the payment of any other part of the Amorgos Construction Cost previously made by the Amorgos Borrower and not already financed or refinanced under the terms of this Agreement;

“Amorgos Ship” means the 3,800 dwt (approximately) double-hull oil product tanker currently known as Hull No. DN-3500-4, to be constructed and sold by the Builders to the Amorgos Borrower pursuant to the Amorgos Contract and to be registered on the Delivery Date for such Newbuilding in the ownership of the Amorgos Borrower through the relevant Registry under the laws and flag of the relevant Flag State;

“Amorgos Supervision Contract” means the contract dated 10 February 2005 made between the Amorgos Borrower and Iota as may be amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the design, building, supervision, representation, procurement of machinery and supplies and turn-key delivery of the Amorgos Ship;

“Amorgos Supervision Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Amorgos Supervision Contract to be given by Iota in the form scheduled to the Amorgos Pre-delivery Security Agreement Assignment;

“Amorgos Supervision Cost” means One million five hundred and fifty thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be payable by the Amorgos Borrower to Iota pursuant to the Amorgos Supervision Contract, as the cost for the services provided by Iota thereunder;

“Amorgos Third Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the fourth instalment of the Amorgos Contract Price and the third instalment of the Amorgos Supervision Cost, each falling due before the Delivery Date for the Amorgos Ship as set out in schedule 3;

“Amorgos Tranche” means a tranche of the Loan of up to Six million six hundred and eighty thousand Dollars ($6,680,000) to be drawn down in not more than four (4) Advances (being the Amorgos Advances);

“Assignee” has the meaning ascribed thereto in clause 15.3;

“Bank” means The Royal Bank of Scotland plc whose registered office is at ▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ acting for the purposes of this Agreement through its branch at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (or of such other address as may last have been notified to the Borrowers pursuant to clause 15.6) and includes its successors in title, Assignees and/or Transferees;

“Banking Day” means a day on which dealings in deposits in Dollars are carried on in the London Interbank Eurocurrency Market and (other than Saturday or Sunday) on which banks are open for business in London, Piraeus and New York City (or any other relevant place of payment under clause 6):

“Borrowed Money” means Indebtedness incurred in respect of (i) money borrowed or raised and debit balances at banks, (ii) any bond, note, loan stock, debenture or similar-debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise than on a non-recourse basis), (v) deferred payments for assets or services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other transaction (including without limitation forward sale or purchase agreements) having the commercial effect of a borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person falling within any of (i) to (viii) above;

“Borrower” means:

(a)

in relation to the Amorgos Ship, the Amorgos Borrower;

(b)

in relation to the Kimolos Ship, the Kimolos Borrower;

(c)

in relation to the Milos Ship, the Milos Borrower;

(d)

in relation to the Mykonos Ship, the Mykonos Borrower; or

(e)

in relation to the Syros Ship, the Syros Borrower,

and “Borrowers” means any or all of them;

“Borrowers’ Security Documents” means, at any relevant time, such of the Security Documents as shall have been executed by any of the Borrowers at such time;

“Builders” means, together, FSIGC and FSS and “Builder” means either of them;

“Casualty Amount” means, in relation to each Ship, Two hundred and fifty thousand Dollars ($250,000) or the equivalent in any other currency;

“Certificate of Ownership” means a certificate issued by the ultimate beneficial owner or owners of all the shares in the Borrowers, the Corporate Guarantor and the Manager in such form as the Bank may require in its absolute discretion;

“Classification” means:

(a)

in relation to each Newbuilding, the classification “+A1 OIL CARRIER (E) ESP, FP.<60°C, + ACC + AMS” with the relevant Classification Society; or

(b)

in relation to the Collateral Ship, 100 A1 Double Hull oil tanker (FP above 60 degrees C), ESP, LMC with the relevant Classification Society,

or, in each case, such other classification as the Bank shall, at the request of an Owner, have agreed in writing shall be treated as the Classification in relation to such Owner’s Ship for the purposes of the relevant Ship Security Documents;

“Classification Society” means:

(a)

in relation to each Newbuilding, American Bureau of Shipping; or

(b)

in relation to the Collateral Ship, Lloyds Register of Shipping,

or, in each such case, such other classification society which the Bank shall, at the request of an Owner, have agreed in writing shall be treated as the Classification Society in relation to such Owner’s Ship for the purposes of the relevant Ship Security Documents;

“Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention constituted pursuant to Resolution A. 741(18) of the International Maritime Organisation and incorporated into the International Convention on Safety of Life at Sea 1974 (as amended) and includes any amendments or extensions thereto and any regulation issued pursuant thereto;

“Collateral Deed of Covenant” means the deed of covenant collateral to the Collateral Mortgage executed or (as the context may require) to be executed by the Corporate Guarantor in favour of the Bank in such form as the Bank may require in its sole discretion;

“Collateral Management Agreement” means the agreement dated 27 January 2004 executed between the Corporate Guarantor and the Manager or any other agreement executed between the Corporate Guarantor and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Collateral Ship;

“Collateral Manager’s Undertaking” means the second priority undertaking and assignment executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Collateral Mortgage” means the second priority Maltese mortgage of the Collateral Ship executed or (as the context may require) to be executed by the Corporate Guarantor in favour of the Bank in such form as the Bank may require in its sole discretion;

“Collateral Mortgage Date” means the date falling not later than seven (7) days after the date when the Bank shall have sent to the Corporate Guarantor a request under clause 5.1.5 of the Corporate Guarantee;

“Collateral Ship” means the 2002-built 6,500 dwt (approximately) double-hull oil tanker Aegean Flower registered in the ownership of the Corporate Guarantor under the laws of the relevant Flag State with IMO number 8978394;

“Commitment” means the amount which the Bank has agreed to lend to the Borrowers under clause 2.1 as reduced by any relevant term of this Agreement;

“Compulsory Acquisition” means, in relation to a Ship, requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of that Ship by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title;

“Construction Cost” means:

(a)

in relation to Amorgos Ship, the Amorgos Construction Cost;

(b)

in relation to Kimolos Ship, the Kimolos Construction Cost;

(c)

in relation to Milos Ship, the Milos Construction Cost;

(d) 

in relation to Mykonos Ship, the Mykonos Construction Cost; or

(e)

in relation to the Syros. Ship, the Syros Construction Cost,

and “Construction Costs” means any or all of them;

“Contract” means:

(a)

in relation to the Amorgos Ship, the Amorgos Contract;

(b)

in relation to the Kimolos Ship, the Kimolos Contract;

(c)

in relation to the Milos Ship, the Milos Contract;

(d)

in relation to the Mykonos Ship, the Mykonos Contract; or

(e)

in relation to the Syros Ship, the Syros Contract,

and “Contracts” means any or all of them;

“Contract Assignment Consent and Acknowledgement” means:

(a)

in relation to the Amorgos Ship, the Amorgos Contract Assignment Consent and Acknowledgement;

(b)

in relation to the Kimolos Ship, the Kimolos Contract Assignment Consent and Acknowledgement;

(c)

in relation to the Milos Ship, the Milos Contract Assignment Consent and Acknowledgement;

(d)

in relation to the Mykonos Ship, the Mykonos Contract Assignment Consent and Acknowledgement; or

(e)

in relation to the Syros Ship, the Syros Contract Assignment Consent and Acknowledgement,

and “Contract Assignment Consents and Acknowledgements” means any or all of them;

“Contract Price” means:

(a)

in relation to the Amorgos Ship, the Amorgos Contract Price;

(b)

in relation to the Kimolos Ship, the Kimolos Contract Price;

(c)

in relation to the Milos Ship, the Milos Contract Price;

(d)

in relation to the Mykonos Ship, the Mykonos Contract Price; or

(e)

in relation to the Syros Ship, the Syros Contract Price,

and “Contract Prices” means any or all of them;

“Corporate Guarantee” means the corporate guarantee executed or (as the context may require) to be executed by the Corporate Guarantor in favour of the Bank in the form set out in schedule 5;

“Corporate Guarantor” means Pontos Navigation Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Credit Support Document” has the meaning given to that expression in section 14 of the Master Swap Agreement and as set out in paragraph (f) or Part 4 of the Schedule to the Master Swap Agreement;

“Credit Support Provider” means any person defined as such in the Master Swap Agreement pursuant to section 14 of the Master Swap Agreement;

“Deed of Covenant” means:

(a)

in relation to the Amorgos Ship, the Amorgos Deed of Covenant;

(b)

in relation to the Kimolos Ship, the Kimolos Deed of Covenant;

(c)

in relation to the Milos Ship, the Milos Deed of Covenant;

(d)

in relation to the Mykonos Ship, the Mykonos Deed of Covenant;

(e)

in relation to the Syros Ship, the Syros Deed of Covenant; or

(f)

in relation to the Collateral Ship, the Collateral Deed of Covenant,

and “Deeds of Covenant” means any or all of them;

“Default” means any Event of Default or any event or circumstance which with the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute an Event of Default;

“Delivery” means, in relation to each Newbuilding, the delivery of such Newbuilding by the Builders to, and the acceptance of such Newbuilding by, the relevant Borrower pursuant to the relevant Contract;

“Delivery Advance”:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, means the Amorgos Delivery Advance;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, means the Kimolos Delivery Advance;

(c)

in relation to the Milos Ship and the Milos Tranche, means the Milos Delivery Advance;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, means the Mykonos Delivery Advance; or

(e)

in relation to the Syros Ship and the Syros Tranche, means the Syros Delivery Advance,

and “Delivery Advances” means any or all of them;

“Delivery Date” means, in relation to each Newbuilding, the date upon which its Delivery occurs;

“DOC” means a document of compliance issued to an Operator in accordance with rule 13 of the Code;

“Dollars” and “$” mean the lawful currency of the United States of America and, in respect of all payments to be made under any of the Security Documents, mean funds which are for same day settlement in the New York Clearing House Interbank Payments System (or such other U.S. dollar funds as may at the relevant time be customary for the settlement of international banking transactions denominated in U.S. dollars);

“Drawdown Date” means, in relation to an Advance, any date, being a Banking Day falling during the relevant Drawdown Period, on which the Borrowers request that Advance to be made as specified in the relevant Drawdown Notice (whether or not such Advance is actually made or not);

“Drawdown Notice” means a notice substantially in the terms of schedule 1;

“Drawdown Period” means, in relation to an Advance, the period commencing on the date of this Agreement and ending on the relevant Termination Date or the period ending on such earlier date (if any) on which (a) the aggregate amount of all Advances is equal to the Commitment or (b) the Commitment is reduced to zero pursuant to clauses 4.3, 10.2 or 12 or (c) Delivery of the Ship relevant to such Advance occurs;

“Earnings” means, in relation to a Ship, all moneys whatsoever from time to time due or payable to an Owner during the Security Period arising out of the use or operation of such Owner’s Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising out of pooling arrangements, compensation payable to such Owner in the event of requisition of such Owner’s Ship for hire, remuneration for salvage or towage services, demurrage and detention moneys and damages for breach (or payment for variation or termination) of any charterparty or other contract for the employment of such Owner’s Ship;

“Encumbrance” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest or other encumbrance of any kind securing any obligation of any person or any type of preferential arrangement (including without limitation title transfer and/or retention arrangements) having a similar effect;

“Environmental Affiliate” means any agent or employee of any Owner or any other Relevant Party or any person having a contractual relationship with any Owner or any other Relevant Party in connection with any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from any Relevant Ship;

“Environmental Approval” means any consent, authorisation, licence or approval of any governmental or public body or authorities or courts applicable to any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from such Relevant Ship required under any Environmental Law;

“Environmental Claim” means any and all material enforcement, clean-up, removal or other governmental or regulatory actions or orders instituted or completed pursuant to any Environmental Law or any Environmental Approval together with claims made by any third party relating to damage, contribution, loss or injury, resulting from any actual or threatened emission, spill, release or discharge of a Pollutant from any Relevant Ship;

“Environmental Laws” means all national, international and state laws, rules, regulations, treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage of Pollutants and actual or threatened emissions, spills, releases or discharges of Pollutants;

“Event of Default” means any of the events or circumstances described in clause 10.1;

“First Advance”:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, means the Amorgos First Advance;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, means the Kimolos First Advance;

(c)

in relation to the Milos Ship and the Milos Tranche, means the Milos First Advance;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, means the Mykonos First Advance; or

(e)

in relation to the Syros Ship and the Syros Tranche, means the Syros First Advance,

and “First Advances” means any or all of them;

“First Deed of Covenant” means the first priority deed of covenant collateral to the First Mortgage dated 30 January 2004 executed by the Corporate Guarantor in favour of the Bank as security for the Corporate Guarantor’s obligations under the First Loan Agreement;

“First Loan Agreement” means the loan agreement dated 28 January 2004 made between (a) the Corporate Guarantor and (b) the Bank, as amended and supplemented from time to time;

“First Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Collateral Ship dated 30 January 2004 and executed by the Manager (as defined in the First Loan Agreement) in favour of the Bank;

“First Mortgage” means the first priority Maltese statutory mortgage of the Collateral Ship dated 30 January 2004 executed by the Corporate Guarantor in favour of the Bank as security for the Corporate Guarantor’s obligations under the First Loan Agreement;

“First Mortgage Documents” means, together, the First Loan Agreement, the First Mortgage, the First Deed of Covenant and the First Manager’s Undertaking;

“First Repayment Date” means, in relation to each Tranche (and subject to clause 6.3), the date falling three (3) months after the earlier of (a) the Drawdown Date of the Delivery Advance relevant to such Tranche and (b) the last day of the Drawdown Period for the Delivery Advance relevant to such Tranche;

“Flag State” means:

(a)

in relation to each Newbuilding, such state or territory designated in writing by the Bank in its absolute discretion, at the request of the relevant Borrower, as being the “Flag State” of such Newbuilding for the purposes of the relevant Ship Security Documents; or

(b)

in relation to the Collateral Ship, the Republic of Malta,

or, in each case, such other state or territory designated in writing by the Bank in its absolute discretion, at the request of an Owner as being the “Flag State” of such Owner’s Ship for the purpose of the Security Documents;

“FSIGC” means Fujian Shipbuilding Industry Group Corporation, a corporation duly organized and existing under the laws of the People’s Republic of China, having its registered office at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, The People’s Republic of China and includes its successors in title;

“FSS” means Fujian Southeast Shipyard, a corporation duly organized and existing under the laws of the People’s Republic of China, having its registered office at 7# Jianshe Road, Economic Technical Development Zone of Fuzhou, Fujian Province, The People’s Republic of China and includes its successors in title;

“Government Entity” means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission, department, division, organ, instrumentality, court or agency and any association, organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing is a participant;

“Indebtedness” means any obligation for the payment or repayment of money, whether as principal or as surety and whether present or future, actual or contingent;

“Insurance Letter” means, in respect of a Ship, a letter from the Owner of such Ship in the form set out in schedule 9;

“Insurances” means, in relation to a Ship, all policies and contracts of insurance (which expression includes all entries of that Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the relevant Owner (whether in the sole name of such Owner, or in the joint names of such Owner and the Bank or otherwise) in respect of such Owner’s Ship and her Earnings or otherwise howsoever in connection with such Ship and all benefits thereof (including claims of whatsoever nature and return of premiums);

“Interest Payment Date” means the last day of an Interest Period;

“Interest Period” means, in relation to any Advance or Tranche, each period for the calculation of interest in respect of such Advance or, as the case may be, Tranche, ascertained in accordance with clauses 3.2 and 3.3;

“Interest Period Letter” means the letter addressed by the Borrowers to the Bank, such letter to be substantially in the form set out in schedule 10;

“Iota” means Iota Corporation, a corporation duly organised and existing under the laws of the Republic of Liberia having its registered office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Liberia and includes its successors in title;

“ISPS Code” means the International Ship and Port facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organization now set out in Chapter XI-2 of the International Convention for the Safety of Life at Sea 1974 (as amended) as adopted by a Diplomatic conference of the International Maritime Organisation on Maritime Security in December 2002 and includes any amendments or extensions thereto and any regulation issued pursuant thereto;

“ISSC” means an International Ship Security Certificate issued in respect of a Ship pursuant to the ISPS Code;

“Kimolos Advances” means, together, the Kimolos Pre-delivery Advances and the Kimolos Delivery Advance and “Kimolos Advance” means any of them;

“Kimolos Borrower” means Kimolos Maritime Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Kimolos Construction Cost” means the aggregate of (a) the Kimolos Contract Price and (b) the Kimolos Supervision Cost;

“Kimolos Contract” means the shipbuilding contract dated 6 February 2005, as amended by addendum No. 1 dated 31 March 2005, addendum No. 2 dated 27 April 2005 and addendum No. 3 dated 27 May 2005, all made between the Builders and the Kimolos Borrower, as may be further amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the construction and sale by the Builders, and the purchase by the Kimolos Borrower, of the Kimolos Ship;

“Kimolos Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Kimolos Contract to be given by the Builders in the form scheduled to the Kimolos Pre-delivery Security Assignment;

“Kimolos Contract Price” means Six million eight hundred thousand Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by the Kimolos Borrower to the Builders pursuant to the Kimolos Contract as the contract price for the Kimolos Ship;

“Kimolos Deed of Covenant” means the first priority deed of covenant and/or general assignment collateral to the Kimolos Mortgage executed or (as the context may require) to be executed by the Kimolos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Kimolos Delivery Advance” means an Advance of up to Three million seven hundred and fifty seven thousand five hundred Dollars ($3,757,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in part the final instalment of the Kimolos Contract Price and the final instalment of the Kimolos Construction Cost, each falling due on the Delivery Date for the Kimolos Ship and (b) (as to the balance) refinancing the payment of any other part of the Kimolos Construction Cost previously made by the Kimolos Borrower and not already financed or refinanced under the terms of this Agreement;

“Kimolos First Advance” means an Advance of up to Four hundred and seventeen thousand five hundred Dollars ($417,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the second instalment for the Kimolos Contract Price and the second instalment of the Kimolos Supervision Cost, each falling due before the Delivery Date for the Kimolos Ship as set out in schedule 3;

“Kimolos Management Agreement” means the management agreement made or (as the context may require) to be made between the Kimolos Borrower and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Kimolos Ship;

“Kimolos Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Kimolos Ship executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Kimolos Mortgage” means the first priority or (as the case may be) preferred mortgage of the Kimolos Ship executed or (as the context may require) to be executed by the Kimolos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Kimolos Operating Account” means an interest bearing Dollar account of the Kimolos Borrower opened or (as the context may require) to be opened by the Kimolos Borrower with the Bank and includes any sub-accounts thereof and any other account designated in writing by the Bank to be a Kimolos Operating Account for the purposes of this Agreement;

“Kimolos Pre-delivery Advances” means, together, the Kimolos First Advance, the Kimolos Second Advance and the Kimolos Third Advance and “Kimolos Pre-delivery Advance” means any of them;

“Kimolos Pre-delivery Security Assignment” means the assignment of the Kimolos Contract, the Kimolos Refund Guarantees and the Kimolos Supervision Contract executed or (as the context may require) to be executed by the Kimolos Borrower in favour of the Bank in the form set out in schedule 4;

“Kimolos Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Kimolos Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Kimolos Refund Guarantee to be given by a Refund Guarantor in the form scheduled to the Kimolos Pre-delivery Security Assignment and “Kimolos Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Kimolos Refund Guarantees” means, together, the letter of guarantee no. LGD6600200500008 dated 9 June 2005 issued by Bank of Communications, Fuzhou Branch as Refund Guarantor in respect of certain of the Builders’ obligations under the Kimolos Contract and any other letters of guarantee to be issued by a Refund Guarantor in respect of the Builders’ obligations under the Kimolos Contract pursuant to the Kimolos Contract or any agreement supplemental to the Kimolos Contract, and any extensions, renewals or replacements to or of any such guarantee(s), in each case in form and substance acceptable to the Bank in its sole discretion and “Kimolos Refund Guarantee” means any of them;

“Kimolos Second Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in full the payment of the third instalment of the Kimolos Contract Price falling due before the Delivery Date for the Kimolos Ship as set out in schedule 3 and (b) (as to the balance) refinancing the payment of any other part of the Kimolos Construction Cost previously made by the Kimolos Borrower and not already financed or refinanced under the terms of this Agreement;

“Kimolos Ship” means the 3,800 dwt (approximately) double-hull oil product tanker currently known as Hull No. DN-3500-5, to be constructed and sold by the Builders to the Kimolos Borrower pursuant to the Kimolos Contract and to be registered on the Delivery Date for such Newbuilding in the ownership of the Kimolos Borrower through the relevant Registry under the laws and flag of the relevant Flag State;

“Kimolos Supervision Contract” means the contract dated 10 February 2005 made between the Kimolos Borrower and Iota as may be amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the design, building, supervision, representation, procurement of machinery and supplies and turn-key delivery of the Kimolos Ship;

“Kimolos Supervision Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Kimolos Supervision Contract to be given by Iota in the form scheduled to the Kimolos Pre-delivery Security Agreement Assignment;

“Kimolos Supervision Cost” means One million five hundred and fifty thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be payable by the Kimolos Borrower to Iota pursuant to the Kimolos Supervision Contract, as the cost for the services provided by Iota thereunder;

“Kimolos Third Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the fourth instalment of the Kimolos Contract Price and the third instalment of the Kimolos Supervision Cost falling due before the Delivery Date for the Kimolos Ship as set out in schedule 3;

“Kimolos Tranche” means a tranche of the Loan of up to Six million six hundred and eighty thousand Dollars ($6,680,000) to be drawn down by not more than four (4) Advances (being the Kimolos Advances);

“LIBOR” means, in relation to a particular period, the rate determined by the Bank to be that at which deposits in Dollars and in an amount comparable with the amount in relation to which LIBOR is to be determined and for a period equal to the relevant period were being offered by the Bank to prime banks in the London Interbank Market at or about 11:00 a.m. on the second Banking Day before the first day of such period, provided that if the Borrowers shall at any time enter into any Transaction(s) under the Master Swap Agreement, LIBOR shall (during the period when any such Transaction(s) are effective and for an amount equal to the notional amount of such Transaction(s)) be the rate for deposits in Dollars for a period equivalent to such period at or about 11:00 a.m. on the second Banking Day before the first day of such period as displayed on Telerate page 3750 (British Bankers’ Association Interest Settlement Rates) (or such other page as may replace such page 3750 on such system or on any other system of the information vendor for the time being designated by the British Bankers’ Association to calculate the BBA Interest Settlement Rate (as defined in the British Bankers’ Association’s Recommended Terms and Conditions (“BBAIRS” terms) dated August, 1996) for Dollars);

“Loan” means the aggregate principal amount owing to the Bank under this Agreement at any relevant time;

“Management Agreement” means:

(a)

in relation to the Amorgos Ship, the Amorgos Management Agreement;

(b)

in relation to the Kimolos Ship, the Kimolos Management Agreement;

(c)

in relation to the Milos Ship, the Milos Management Agreement;

(d)

in relation to the Mykonos Ship, the Mykonos Management Agreement;

(e)

in relation to the Syros Ship, the Syros Management Agreement; or

(f)

in relation to the Collateral Ship, the Collateral Management Agreement,

and “Management Agreements” means any or all of them;

“Manager” means, in relation to each Ship, Aegean Bunkering Services Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 or any other person appointed by the relevant Owner, with the prior written consent of the Bank, as the manager of such Ship and, in each such case, includes its successors in title;

“Manager’s Undertaking” means:

(a)

in relation to the Amorgos Ship, the Amorgos Manager’s Undertaking;

(b)

in relation to the Kimolos Ship, the Kimolos Manager’s Undertaking;

(c)

in relation to the Milos Ship, the Milos Manager’s Undertaking;

(d)

in relation to the Mykonos Ship, the Mykonos Manager’s Undertaking;

(e)

in relation to the Syros Ship, the Syros Manager’s Undertaking; or

(f)

in relation to the Collateral Ship, the Collateral Manager’s Undertaking,

and “Manager’s Undertakings” means any or all of them;

“Margin” means one point one five per cent (1.15%) per annum;

“Master Agreement Security Deed” means the security deed executed or (as the context may require) to be executed by the Borrowers in favour of the Bank in the form set out in schedule 8;

“Master Swap Agreement” means the agreement made between the Bank and the Borrowers dated as of February 2006 comprising an ISDA Master Agreement, a schedule thereto (each in the form set out in schedule 7 and any Confirmations (as defined therein) supplemental thereto;

“Milos Advances” means, together, the Milos Pre-delivery Advances and the Milos Delivery Advance and “Milos Advance” means any of them;

“Milos Borrower” means Milos Maritime Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Milos Construction Cost” means the aggregate of (a) the Milos Contract Price and (b) the Milos Supervision Cost;

“Milos Contract” means the shipbuilding contract dated 6 February 2005, as amended by addendum No. 1 dated 31 March 2005, addendum No. 2 dated 27 April 2005 and addendum No. 3 dated 27 May 2005, all made between the Builders and the Milos Borrower, as may be

written consent of the Bank, relating to the construction and sale by the Builders, and the purchase by the Milos Borrower, of the Milos Ship;

“Milos Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Milos Contract to be given by the Builders in the form scheduled to the Milos Pre-delivery Security Assignment;

“Milos Contract Price” means Six million eight hundred thousand Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by the Milos Borrower to the Builders pursuant to the Milos Contract, as the contract price for the Milos Ship;

“Milos Deed of Covenant” means the first priority deed of covenant and/or general assignment collateral to the Milos Mortgage executed or (as the context may require) to be executed by the Milos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Milos Delivery Advance” means an Advance of up to Three million seven hundred and fifty seven thousand five hundred Dollars ($3,757,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in part the final instalment of the Milos Contract Price with and final instalment of the Milos Construction Cost, each falling due on the Delivery Date for the Milos Ship and (b) (as to the balance) refinancing the payment of any other part of the Milos Construction Cost previously made by the Milos Borrower and not already financed or refinanced under the terms of this Agreement;

“Milos First Advance” means an Advance of up to Four hundred and seventeen thousand five hundred Dollars ($417,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the second instalment of the Milos Contract Price and the second instalment of the Milos Supervision Cost, each falling due before the Delivery Date for the Milos Ship as set out in schedule 3;

“Milos Management Agreement” means the management agreement made or (as the context may require) to be made between the Milos Borrower and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Milos Ship;

“Milos Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Milos Ship executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Milos Mortgage” means the first priority or (as the case may be) preferred mortgage of the Milos Ship executed or (as the context may require) to be executed by the Milos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Milos Operating Account” means an interest bearing Dollar account of the Milos Borrower opened or (as the context may require) to be opened by the Milos Borrower with the Bank and includes any sub-accounts thereof and any other account designated in writing by the Bank to be a Milos Operating Account for the purposes of this Agreement;

“Milos Pre-delivery Advances” means, together, the Milos First Advance, the Milos Second Advance and the Milos Third Advance and “Milos Pre-delivery Advance” means any of them;

“Milos Pre-delivery Security Assignment” means the assignment of the Milos Contract, the Milos Refund Guarantees and the Milos Supervision Contract executed or (as the context may require) to be executed by the Milos Borrower in favour of the Bank in the form set out in schedule 4;

“Milos Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Milos Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Milos Refund Guarantee to be given by a Refund Guarantor in the form scheduled to the Milos Pre-delivery Security Assignment and “Milos Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Milos Refund Guarantees” means, together, the letter of guarantee no. LGD6600200500014 dated 9 June 2005 issued by Bank of Communications, Fuzhou Branch as Refund Guarantor in respect of certain of the Builders’ obligations under the Milos Contract and any other letters of guarantee to be issued by a Refund Guarantor in respect of the Builders’ obligations under the Milos Contract, pursuant to the Milos Contract or any agreement supplemental to the Milos Contract, and any extensions, renewals or replacements to or of any such guarantee(s), in each case in form and substance acceptable to the Bank in its sole discretion and “Milos Refund Guarantee” means any of them;

“Milos Second Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in full the payment of the third instalment of the Milos Contract Price falling due before the Delivery Date for the Milos Ship as set out in schedule 3 and (b) (as to the balance) refinancing the payment of any other part of the Milos Construction Cost previously made by the Milos Borrower and not already financed or refinanced under the terms of this Agreement;

“Milos Ship” means the 3,800 dwt (approximately) double-hull oil product tanker currently known as Hull No. DN-3500-1, to be constructed and sold by the Builders to the Milos Borrower pursuant to the Milos Contract and to be registered on the Delivery Date for such Newbuilding in the ownership of the Milos Borrower through the relevant Registry under the laws and flag of the relevant Flag State;

“Milos Supervision Contract” means the contract dated 10 February 2005 made between the Milos Borrower and Iota as may be amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the design, building, supervision, representation, procurement of machinery and supplies and turn-key delivery of the Milos Ship;

“Milos Supervision Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Milos Supervision Contract to be given by Iota in the form scheduled to the Milos Pre-delivery Security Agreement Assignment;

“Milos Supervision Cost” means One million five hundred and fifty thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be payable by the Milos Borrower to Iota pursuant to the Milos Supervision Contract, as the cost for the services provided by Iota thereunder;

‘Milos Third Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the fourth instalment of the Milos Contract Price and the third instalment of the Milos Supervision Cost, each falling due before the Delivery Date for the Milos Ship as set out in schedule 3;

“Milos Tranche” means a tranche of the Loan of up to Six million six hundred and eighty thousand Dollars ($6,680,000) to be drawn down in not more than four (4) Advances (being the Milos Advances);

“month” means a period beginning in one calendar month and ending in the next calendar month on the day numerically corresponding to the day of the calendar month on which it started, provided that (i) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day in such next calendar month and (ii) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding Banking Day and “months” and “monthly” shall be construed accordingly;

“Mortgage” means:

(a)

in relation to the Amorgos Ship, the Amorgos Mortgage;

(b)

in relation to the Kimolos Ship, the Kimolos Mortgage;

(c)

in relation to the Milos Ship, the Milos Mortgage;

(d)

in relation to the Mykonos Ship, the Mykonos Mortgage;

(e)

in relation to the Syros Ship, the Syros Mortgage; or

(f)

in relation to the Collateral Ship, the Collateral Mortgage,

and “Mortgages” means any or all of them;

“Mortgaged Ship” means, at any relevant time, any Newbuilding which is at such time subject to a Mortgage and/or the Earnings, Insurances and Requisition Compensation of which are subject to an Encumbrance pursuant to the relevant Ship Security Documents and a Newbuilding shall, for the purposes of this Agreement, be deemed to be a Mortgaged Ship as from whichever shall be the earlier of (a) the Drawdown Date of the Delivery Advance for that Newbuilding and (b) the date that the Mortgage of that Newbuilding shall have been executed and registered in accordance with this Agreement until whichever shall be the earlier of (i) the payment in full of the amount required to be paid by the Bank pursuant to clause 4.3 following the Total Loss of such Newbuilding and (ii) the date on which all moneys owing under the Security Documents have been repaid in full;

“Mykonos Advances” means, together, the Mykonos Pre-delivery Advances and the Mykonos Delivery Advance and “Mykonos Advance” means any of them;

“Mykonos Borrower” means Mykonos Maritime Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Mykonos Construction Cost” means the aggregate of (a) the Mykonos Contract Price and (b) the Mykonos Supervision Cost;

“Mykonos Contract” means the shipbuilding contract dated 6 February 2005, as amended by addendum No. 1 dated 31 March 2005, addendum No. 2 dated 27 April 2005 and addendum No. 3 dated 27 May 2005, all made between the Builders and the Mykonos Borrower, as may be further amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the construction and sale by the Builders, and the purchase by the Mykonos Borrower, of the Mykonos Ship;

“Mykonos Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Mykonos Contract to be given by the Builders in the form scheduled to the Mykonos Pre-delivery Security Assignment;

“Mykonos Contract Price” means Six million eight hundred thousand Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by the Mykonos Borrower to the Builders pursuant to the Mykonos Contract, as the contract price for the Mykonos Ship;

“Mykonos Deed of Covenant” means the first priority deed of covenant and/or general assignment collateral to the Mykonos Mortgage executed or (as the context may require) to be executed by the Mykonos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Mykonos Delivery Advance” means an Advance of up to Three million seven hundred and fifty seven thousand five hundred Dollars ($3,757,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in part the

final instalment of the Mykonos Contract Price and the final instalment of the Mykonos Supervision Cost, each falling due on the Delivery Date for the Mykonos Ship and (b) (as to the balance) refinancing the payment of any other part of the Mykonos Construction Cost previously made by the Mykonos Borrower and not already financed or refinanced under the terms of this Agreement;

“Mykonos First Advance” means an Advance of up to Four hundred and seventeen thousand five hundred Dollars ($417,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the second instalment of the Mykonos Contract Price and the second instalment of the Mykonos Supervision Cost, each falling due before the Delivery Date for the Mykonos Ship as set out in schedule 3;

“Mykonos Management Agreement” means the management agreement made or (as the context may require) to be made between the Mykonos Borrower and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Mykonos Ship;

“Mykonos Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Mykonos Ship executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Mykonos Mortgage” means the first priority or (as the case may be) preferred mortgage of the Mykonos Ship executed or (as the context may require) to be executed by the Mykonos Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Mykonos Operating Account” means an interest bearing Dollar account of the Mykonos Borrower opened or (as the context may require) to be opened by the Mykonos Borrower with the Bank and includes any sub-accounts thereof the Bank to be a Mykonos Operating Account for the purposes of this Agreement,

“Mykonos Pre-delivery Advances” means, together, the Mykonos First Advance, the Mykonos Second Advance and the Mykonos Third Advance and “Mykonos Pre-delivery Advance” means any of them;

“Mykonos Pre-delivery Security Assignment” means the assignment of the Mykonos Contract, the Mykonos Refund Guarantees and the Mykonos Supervision Contract executed or (as the context may require) to be executed by the Mykonos Borrower in favour of the Bank in the form set out in schedule 4;

“Mykonos Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Mykonos Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Mykonos Refund Guarantee to be given by a Refund Guarantor in the form scheduled to the Mykonos Pre-delivery Security Assignment and “Mykonos Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Mykonos Refund Guarantees” mean, together, the letter of guarantee no. LGD6600200500010 dated 9 June 2005 issued by Bank of Communications, Fuzhou Branch as Refund Guarantor in respect of certain of the Builders’ obligations under the Mykonos Contract and any other letters of guarantee to be issued by a Refund Guarantor in respect of the Builders’ obligations under the Mykonos Contract, pursuant to the Mykonos Contract or any agreement supplemental to the Mykonos Contract, and any extensions, renewals or replacements to or of any such guarantee(s), in each case in form and substance acceptable to the Bank in its sole discretion and “Mykonos Refund Guarantee” means any of them;

“Mykonos Second Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in full the payment of the third instalment of the Mykonos Contract Price falling due before the Delivery Date for the

Mykonos Ship as set out in schedule 3 and (b) (as to the balance) refinancing the payment of any other part of the Mykonos Construction Cost previously made by the Mykonos Borrower and not already financed or refinanced under the terms of this Agreement;

“Mykonos Ship” means the 3,800 dwt (approximately) double-hull oil product tanker currently known as Hull No. DN-3500-7, to be constructed and sold by the Builders to the Mykonos Borrower pursuant to the Mykonos Contract and to be registered on the Delivery Date for such Newbuilding in the ownership of the Mykonos Borrower through the relevant Registry under the laws and flag of the relevant Flag State;

“Mykonos Supervision Contract” means the contract dated 10 February 2005 made between the Mykonos Borrower and Iota as may be amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the design, building, supervision, representation, procurement of machinery and supplies and turn-key delivery of the Mykonos Ship;

“Mykonos Supervision Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Mykonos Supervision Contract to be given by Iota in the form scheduled to the Mykonos Pre-delivery Security Agreement Assignment;

“Mykonos Supervision Cost” means One million five hundred and fifty thousand Dollars ($1,550,000) or such lesser other sum in Dollars as may be payable by the Mykonos Borrower to Iota pursuant to the Mykonos Supervision Contract, as the cost for the services provided by Iota thereunder;

“Mykonos Third Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the fourth instalment of the Mykonos Contract Price and the third instalment of the Mykonos Supervision Cost, each falling due before the Delivery Date for the Mykonos Ship as set out in schedule 3;

“Mykonos Tranche” means a tranche of the Loan of up to Six million six hundred and eighty thousand Dollars ($6,680,000) to be drawn down in not more than four (4) Advances (being the Mykonos Advances);

“Newbuildings” means, together, the Amorgos Ship, the Kimolos Ship, the Milos Ship, the Mykonos Ship and the Syros Ship and “Newbuilding” means any of them;

“Operating Account” means:

(a)

in relation to the Amorgos Ship, the Amorgos Operating Account;

(b)

In relation to the Kimolos Ship, the Kimolos Operating Account;

(c)

in relation to the Milos Ship, the Milos Operating Account;

(d)

in relation to the Mykonos Ship, the Mykonos Operating Account; or

(e)

in relation to the Syros Ship, the Syros Operating Account,

and “Operating Accounts” means any or all of them;

“Operator” means any person who is from time to time during the Security Period concerned in the operation of a Ship and falls within the definition of “Company” set out in rule 1.1.2 of the Code;

“Owner” means:

(a)

in relation to the Amorgos Ship, the Amorgos Borrower;

(b)

in relation to the Kimolos Ship, the Kimolos Borrower;

(c)

in relation to the Milos Ship, the Milos Borrower;

(d)

in relation to the Mykonos Ship, the Mykonos Borrower;

(e)

in relation to the Syros Ship, the Syros Borrower; or

(f)

in relation to the Collateral Ship, the Corporate Guarantor

and “Owners” means any or all of them;

“Permitted Encumbrance” means any Encumbrance in favour of the Bank created pursuant to the Security Documents, the First Mortgage Documents and Permitted Liens;

“Permitted Liens” means, in relation to each Ship, any lien on that Ship for master’s, officer’s or crew’s wages outstanding in the ordinary course of trading, any lien for salvage and any ship repairer’s or outfitter’s possessory lien for a sum not (except with the prior written consent of the Bank) exceeding the relevant Casualty Amount;

“Personal Guarantee” means the guarantee executed or (as the context may require) to be executed by the Personal Guarantor in favour of the Bank in the form set out in schedule 6 or (as the context may require) any substitute personal guarantee accepted by the Bank pursuant to clause10.1.27;

“Personal Guarantor” means such individual as may be agreed by the Bank in writing or (as the context may require) any substitute individual or individuals who issue a personal guarantee accepted by the Bank pursuant to clause 10.1.27;

“Pollutant” means and includes pollutants, contaminants, toxic substances, oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability ▇▇▇ ▇▇▇▇;

“Pre-delivery Advances”:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, means the Amorgos Pre-delivery Advances;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, means the Kimolos Pre-delivery Advances;

(c)

in relation to the Milos Ship and the Milos Tranche, means the Milos Pre-delivery Advances;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, means the Mykonos Pre-delivery Advances; or

(e)

in relation to the Syros Ship and the Syros Tranche, means the Syros Pre-delivery Advances,

and “Pre-delivery Advance” means any of them;

“Pre-delivery Security Assignment” means:

(a)

in relation to the Amorgos Ship, the Amorgos Pre-delivery Security Assignment;

(b)

in relation to the Kimolos Ship, the Kimolos Pre-delivery Security Assignment;

(c)

in relation to the Milos Ship, the Milos Pre-delivery Security Assignment;

(d)

in relation to the Mykonos Ship, the Mykonos Pre-delivery Security Assignment; or

(e)

in relation to the Syros Ship, the Syros Pre-delivery Security Assignment,

and “Pre-delivery Security Assignments” means any or all of them;

“Refund Guarantee” means:

(a)

in relation to the Amorgos Ship, any Amorgos Refund Guarantee;

(b)

in relation to the Kimolos Ship, any Kimolos Refund Guarantee;

(c)

in relation to the Milos Ship, any Milos Refund Guarantee;

(d)

in relation to the Mykonos Ship, any Mykonos Refund Guarantee; or

(e)

in relation to the Syros Ship, any Syros Refund Guarantee,

and “Refund Guarantees” means any or all of them;

“Refund Guarantee Assignment Consent and Acknowledgement” means:

(a)

in relation to the Amorgos Ship, any Amorgos Refund Guarantee Assignment Consent and Acknowledgement;

(b)

in relation to the Kimolos Ship, any Kimolos Refund Guarantee Assignment Consent and Acknowledgement;

(c)

in relation to the Milos Ship, any Milos Refund Guarantee Assignment Consent and Acknowledgement;

(d)

in relation to the Mykonos Ship, any Mykonos Refund Guarantee Assignment Consent and Acknowledgement; or

(e)

in relation to the Syros Ship, any Syros Refund Guarantee Assignment Consent and Acknowledgement,

and “Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Refund Guarantor” means Bank of Communications, Fuzhou Branch of Fuzhou, People’s Republic of China and/or any other bank or financial institution acceptable to the Bank in its sole discretion and appointed by the Builders to issue a Refund Guarantee and includes their respective successors in title and “Refund Guarantors” means any or all of them;

“Registry” means, in relation to a Ship, any registrar, consul, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register such Ship, the relevant Owner’s title to such Ship and the relevant Mortgage under the laws and flag of the relevant Flag State;

“Regulatory Agency” means the Government Entity or other organisation in a Flag State which has been designated by the Government of that Flag State to implement and/or administer and/or enforce the provisions of the Code;

“Related Company” means:

(a)

of the Bank, means any Subsidiary of the Bank, any company or other entity of which the Bank is a Subsidiary and any Subsidiary of any such company or entity; or

(b)

of a Security Party, means any company or other entity which is active in the bunkering business or services and which is:

(i)

a Subsidiary of the relevant Security Party; or

(ii)

any company or other entity (“holding company”) of which such Security Party is a Subsidiary; or

(iii)

any Subsidiary (other than such Security Party) of any such holding company;

“Relevant Jurisdiction” means any jurisdiction in which or where any Security Party is incorporated, resident, domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;

“Relevant Party” means the Borrowers, the Borrowers’ Related Companies, the other Security Parties (other than the Builders and the Refund Guarantors) and their respective Related Companies;

“Relevant Ship” means the Ships and any other vessel from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any Relevant Party;

“Repayment Dates” means, in relation to each Tranche (and subject to clause 6.3), the First Repayment Date in respect such Tranche and each of the dates falling at three (3) monthly intervals after such First Repayment Date up to and including the date falling one hundred and forty one (141) months after such First Repayment Date,

“Requisition Compensation” means, in relation to a Ship, all sums of money or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of such Ship;

“Second Advance”:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, means the Amorgos Second Advance;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, means the Kimolos Second Advance;

(c)

in relation to the Milos Ship and the Milos Tranche, means the Milos Second Advance;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, means the Mykonos Second Advance; or

(e)

in relation to the Syros Ship and the Syros Tranche, means the Syros Second Advance,

and “Second Advances” means any or all of them;

“Security Documents” means this Agreement, the Master Swap Agreement, the Master Agreement Security Deed, the Corporate Guarantee, the Personal Guarantee, the Mortgages,

the Deeds of Covenant, the Pre-delivery Security Assignments, the Contract Assignment Consents and Acknowledgements, the Refund Guarantee Assignment Consents and Acknowledgements, the Supervision Contract Assignment Consents and Acknowledgements, the Manager’s Undertakings, the Certificate of Ownership and any other agreement or document as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or secure all or any part of the Loan, interest thereon and other moneys from time to time owing by the Borrowers or any of them or any other Security Party pursuant to this Agreement and/or the Master Swap Agreement or any other Security Document (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement);

“Security Party” means each Borrower, the Corporate Guarantor, the Personal Guarantor, the Manager, each Refund Guarantor, lota and each Builder or any other person who may at any time be a party to any of the Security Documents (other than the Bank);

“Security Period” means the period commencing on the date hereof and terminating upon discharge of the security created by the Security Documents by payment of all monies payable thereunder;

“Security Requirement” means the amount in Dollars (as certified by the Bank whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrowers and the Bank) which is, at any relevant time, One hundred and twenty five per cent (125%) of the aggregate of (a) the Loan and (b) the cost (if any) (as certified by the Bank whose certificate shall in the absence of manifest error be conclusive and binding on the Borrowers and the Bank) of terminating any Transactions entered into pursuant to the Master Swap Agreement;

“Security Value” means the amount in Dollars (as certified by the Bank whose certificate shall, in the absence of manifest error, be conclusive and binding on the Borrowers and the Bank) which is, at any relevant time, the aggregate of (i) the market value of the Mortgaged Ships as most recently determined in accordance with clause 8.2.2 and (ii) the market value of any additional security for the time being actually provided to the Bank pursuant to clause 8.2;

“Ships” means, together, the Newbuildings and the Collateral Ship and “Ship” means any of them;

“Ship Security Documents”:

(a)

in relation to the Amorgos Ship, means the Amorgos Mortgage, the Amorgos Deed of Covenant and the Amorgos Manager’s Undertaking;

(b)

in relation to the Kimolos Ship, means the Kimolos Mortgage, the Kimolos Deed of Covenant and the Kimolos Manager’s Undertaking;

(c)

in relation to the Milos Ship, means the Milos Mortgage, the Milos Deed of Covenant and the Milos Manager’s Undertaking;

(d)

in relation to the Mykonos Ship, means the Mykonos Mortgage, the Mykonos Deed of Covenant and the Mykonos Manager’s Undertaking;

(e)

in relation to the Syros Ship, means the Syros Mortgage, the Syros Deed of Covenant and the Syros Manager’s Undertaking; or

(f)

in relation to the Collateral Ship, means the Collateral Mortgage, the Collateral Deed of Covenant and the Collateral Manager’s Undertaking;

“SMC” means a safety management certificate issued in respect of a Ship in accordance with rule 13 of the Code;

“Supervision Contract” means:

(a)

in relation to the Amorgos Ship, the Amorgos Supervision Contract;

(b)

in relation to the Kimolos Ship, the Kimolos Supervision Contract;

(c)

in relation to the Milos Ship, the Milos Supervision Contract;

(d)

in relation to the Mykonos Ship, the Mykonos Supervision Contract; or

(e)

in relation to the Syros Ship, the Syros Supervision Contract;

and “Supervision Contracts” means any or all of them;

“Supervision Contract Assignment Consent and Acknowledgement” means:

(a)

in relation to the Amorgos Ship, the Amorgos Supervision Contract Assignment Consent and Acknowledgement;

(b)

in relation to the Kimolos Ship, the Kimolos Supervision Contract Assignment Consent and Acknowledgement;

(c)

in relation to the Milos Ship, the Milos Supervision Contract Assignment Consent and Acknowledgement;

(d)

in relation to the Mykonos Ship, the Mykonos Supervision Contract Assignment Consent and Acknowledgement; or

(e)

in relation to the Syros Ship, the Syros Supervision Contract Assignment Consent and Acknowledgement,

and “Supervision Contract Assignment Consents and Acknowledgements” means any or all of them;

“Supervision Cost” means:

(a)

in relation to Amorgos Ship, the Amorgos Supervision Cost;

(b)

in relation to Kimolos Ship, the Kimolos Supervision Cost;

(c)

in relation to Milos Ship, the Milos Supervision Cost;

(d)

in relation to Mykonos Ship, the Mykonos Supervision Cost; or

(e)

in relation to the Syros Ship, the Syros Supervision Cost,

and “Supervision Costs” means any or all of them;

“Subsidiary” of a person means any company or entity directly or indirectly controlled by such person, and for this purpose “control” means either the ownership of more than fifty per cent (50%) 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;

“Syros Advances” means, together, the Syros Pre-delivery Advances and the Syros Delivery Advance and “Syros Advance” means any of them;

“Syros Borrower” means Syros Maritime Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 and includes its successors in title;

“Syros Construction Cost” means the aggregate of (a) the Syros Contract Price and (b) the Syros Supervision Cost;

“Syros Contract” means the shipbuilding contract dated 6 February 2005, as amended by addendum No. 1 dated 31 March 2005, addendum No. 2 dated 27 April 2005 and addendum No. 3 dated 27 May 2005, all made between the Builders and the Syros Borrower, as may be further amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the construction and sale by the Builders, and the purchase by the Syros Borrower, of the Syros Ship;

“Syros Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Syros Contract to be given by the Builders in the form scheduled to the Syros Pre-delivery Security Assignment;

“Syros Contract Price” means Six million eight hundred thousand Dollars ($6,800,000) or such other lesser sum in Dollars as may be payable by the Syros Borrower to the Builders pursuant to the Syros Contract, as the contract price for the Syros Ship;

“Syros Deed of Covenant” means the first priority deed of covenant and/or general assignment collateral to the Syros Mortgage executed or (as the context may require) to be executed by the Syros Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Syros Delivery Advance” means an Advance of up to Three million seven hundred and fifty seven thousand five hundred Dollars ($3,757,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in part the final instalment of the Syros Contract Price and the final instalment of the Syros Supervision Cost, each falling due on the Delivery Date for the Syros Ship and (b) (as to the balance) refinancing the payment of any other part of the Syros Construction Cost previously made by the Syros Borrower and not already financed or refinanced under the terms of this Agreement;

“Syros First Advance” means an Advance of up to Four hundred and seventeen thousand five hundred Dollars ($417,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the second instalment of the Syros Contract Price and the second instalment of the Syros Supervision Cost, each falling due before the Delivery Date for the Syros Ship as set out in schedule 3;

“Syros Management Agreement” means the management agreement made or (as the context may require) to be made between the Syros Borrower and the Manager in a form previously approved in writing by the Bank providing (inter alia) for the Manager to manage the Syros Ship;

“Syros Manager’s Undertaking” means the first priority undertaking and assignment in relation to the Syros Ship executed or (as the context may require) to be executed by the Manager in favour of the Bank in such form as the Bank may require in its sole discretion;

“Syros Mortgage” means the first priority or (as the case may be) preferred mortgage of the Syros Ship executed or (as the context may require) to be executed by the Syros Borrower in favour of the Bank in such form as the Bank may require in its sole discretion;

“Syros Operating Account” means an interest bearing Dollar account of the Syros Borrower opened or (as the context may require) to be opened by the Syros Borrower with the Bank and includes any sub-accounts thereof and any other account designated in writing by the Bank to be a Syros Operating Account for the purposes of this Agreement;

“Syros Pre-delivery Advances” means, together, the Syros First Advance, the Syros Second Advance and the Syros Third Advance and “Syros Pre-delivery Advance” means any of them;

“Syros Pre-delivery Security Assignment” means the assignment of the Syros Contract, the Syros Refund Guarantees and the Syros Supervision Contract executed or (as the context may require) to be executed by the Syros Borrower in favour of the Bank in the form set out in schedule 4;

“Syros Refund Guarantee Assignment Consent and Acknowledgement” means, in relation to each Syros Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Syros Refund Guarantee to be given by a Refund Guarantor in the form scheduled to the Syros Pre-delivery Security Assignment and “Syros Refund Guarantee Assignment Consents and Acknowledgements” means any or all of them;

“Syros Refund Guarantees” means, together, the letter of guarantee no. LGD6600200500009 dated 9 June 2005 issued by Bank of Communications, Fuzhou Branch as Refund Guarantor in respect of certain of the Builders’ obligations under the Syros Contract and any other letters of guarantee to be issued by a Refund Guarantor in respect of the Builders’ obligations under the Syros Contract, pursuant to the Syros Contract or any agreement supplemental to the Syros Contract, and any extensions, renewals or replacements to or of any such guarantee(s), in each case in form and substance acceptable to the Bank in its sole discretion and “Syros Refund Guarantee” means any of them;

“Syros Second Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of (a) financing or refinancing in full the payment of the third instalment of the Syros Contract Price falling due before the Delivery Date for the Syros Ship as set out in schedule 3 and (b) (as to the balance) refinancing the payment of any other part of the Syros Construction Cost previously made by the Syros Borrower and not already financed or refinanced under the terms of this Agreement;

“Syros Ship” means the 3,800 dwt (approximately) double-hull oil product tanker currently known as Hull No. DN-3500-6, to be constructed and sold by the Builders to the Syros Borrower pursuant to the Syros Contract and to be registered on the Delivery Date for such Newbuilding in the ownership of the Syros Borrower through the relevant Registry under the laws and flag of the relevant Flag State;

“Syros Supervision Contract” means the contract dated 10 February 2005 made between the Syros Borrower and Iota as may be amended, supplemented, varied, replaced or novated from time to time with the prior written consent of the Bank, relating to the design, building, supervision, representation, procurement of machinery and supplies and turn-key delivery of the Syros Ship;

“Syros Supervision Contract Assignment Consent and Acknowledgement” means the acknowledgement of notice of, and consent to, the assignment in respect of the Syros Supervision Contract to be given by Iota in the form scheduled to the Syros Pre-delivery Security Agreement Assignment;

“Syros Supervision Cost” means One million five hundred and fifty thousand Dollars ($1,550,000) or such other lesser sum in Dollars as may be payable by the Syros Borrower to Iota pursuant to the Syros Supervision Contract, as the cost for the services provided by Iota thereunder;

“Syros Third Advance” means an Advance of up to One million two hundred and fifty two thousand five hundred Dollars ($1,252,500) made or (as the context may require) to be made available to the Borrowers for the purpose of financing or refinancing in part the payment of the fourth instalment of the Syros Contract Price and the third instalment of the Syros Supervision Cost, each falling due before the Delivery Date for the Syros Ship as set out in schedule 3;

“Syros Tranche” means a tranche of the Loan of up to Six million six hundred and eighty thousand Dollars ($6,680,000) to be drawn down in not more than four (4) Advances (being the Syros Advances);

“Taxes” includes all present and future taxes, levies, imposts, duties, fees or charges of whatever nature together with interest thereon and penalties in respect thereof and “Taxation” shall be construed accordingly;

“Termination Date” means:

(a)

in relation to the Amorgos First Advance, 30 June 2006;

(b)

in relation to the Amorgos Second Advance, 31 October 2006;

(c)

in relation to the Amorgos Third Advance, 30 April 2007;

(d)

in relation to the Amorgos Delivery Advance, 30 September 2007;

(e)

in relation to the Kimolos First Advance, 15 October 2006;

(f)

in relation to the Kimolos Second Advance, 15 February 2007;

(g)

in relation to the Kimolos Third Advance, 30 June 2007;

(h)

in relation to the Kimolos Delivery Advance, 30 October 2007;

(i)

in relation to the Milos First Advance, 28 April 2006;

(j)

in relation to the Milos Second Advance, 28 April 2006;

(k)

in relation to the Milos Third Advance, 30 September 2006;

(l)

in relation to the Milos Delivery Advance, 28 February 2007;

(m)

in relation to the Mykonos First Advance, 28 February 2007;

(n)

in relation to the Mykonos Second Advance, 30 June 2007;

(o)

in relation to the Mykonos Third Advance, 10 November 2007;

(p)

in relation to the Mykonos Delivery Advance, 10 March 2008;

(q)

in relation to the Syros First Advance, 16 November 2006;

(r)

in relation to the Syros Second Advance, 31 March 2007;

(s)

in relation to the Syros Third Advance, 14 September 2007; or

(t)

in relation to the Syros Delivery Advance, 31 January 2008,

or, in each such case, such later date as the Borrowers may request and the Bank may in its absolute discretion consent to;

“Third Advance”:

(a)

in relation to the Amorgos Ship and the Amorgos Tranche, means the Amorgos Third Advance;

(b)

in relation to the Kimolos Ship and the Kimolos Tranche, means the Kimolos Third Advance;

(c)

in relation to the Milos Ship and the Milos Tranche, means the Milos Third Advance;

(d)

in relation to the Mykonos Ship and the Mykonos Tranche, means the Mykonos Third Advance; or

(e)

in relation to the Syros Ship and the Syros Tranche, means the Syros Third Advance,

and “Third Advances” means any or all of them;

“Total Loss” means, in relation to a Ship:

(a)

actual, constructive, compromised or arranged total loss of such Ship; or

(b)

the Compulsory Acquisition of such Ship; or

(c)

the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of such Ship (other than where the same amounts to the Compulsory Acquisition of such Ship) by any Government Entity, or by persons acting or purporting to act on behalf of any Government Entity, unless such Ship be released and restored to the relevant Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof;

“Tranche” means:

(a)

in relation to the Amorgos Ship, the Amorgos Tranche;

(b)

in relation to the Kimolos Ship, the Kimolos Tranche;

(c)

in relation to the Milos Ship, the Milos Tranche;

(d)

in relation to the Mykonos Ship, the Mykonos Tranche; or

(e)

in relation to the Syros Ship, the Syros Tranche,

and “Tranches” means any or all of them;

“Transaction” means a Transaction as defined in the introductory paragraph of the Master Swap Agreement;

“Transferee” has the meaning ascribed thereto in clause 15.4; and

“Underlying Documents” means, together, the Contracts, the Refund Guarantees, the Supervision Contracts and the Management Agreements and “Underlying Document” means any of them.

1.3

Headings

Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

1.4

Construction of certain terms

In this Agreement, unless the context otherwise requires:

1.4.1

references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;

1.4.2

references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in accordance with terms thereof, or, as the case may be, with the agreement of the relevant parties;

1.4.3

references to a “regulation” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank or government department or any self-regulatory or other national or supra-national authority;

1.4.4

words importing the plural shall include the singular and vice versa;

1.4.5

references to a time of day are to London time;

1.4.6

references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;

1.4.7

references to a “guarantee” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and

1.4.8

references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended.

2

The Commitment and the Loan

2.1

Agreement to lend

The Bank, relying upon each of the representations and warranties in clause 7, agrees to lend to the Borrowers, jointly and severally, upon and subject to the terms of this Agreement, the principal sum of up to Thirty three million four hundred thousand Dollars ($33,400,000) in up to twenty (20) Advances comprising five (5) Tranches, namely, the Amorgos Tranche, the Kimolos Tranche, the Milos Tranche, the Mykonos Tranche and the Syros Tranche.

2.2

Drawdown

Subject to the terms and conditions of this Agreement, each Advance shall be made following receipt by the Bank from the Borrowers of a Drawdown Notice not later than 10:00 a.m. on the second Banking Day before the date, which shall be a Banking Day falling within the relevant Drawdown Period, on which such Advance is intended to be made. A Drawdown Notice shall be effective on actual receipt by the Bank and, once given, shall, subject as provided in clause 3.6.1, be irrevocable.

2.3

Timing and limitations of Loan, Tranches and Advances

2.3.1

The aggregate amount of the Loan shall not exceed the lower of (a) Thirty three million four hundred thousand Dollars ($33,400,000) and (b) eighty per cent (80%) of the aggregate Construction Costs of all the Newbuildings.

2.3.2

The aggregate amount of all the Advances for a Newbuilding shall not exceed the lower of (a) Six million six hundred and eighty thousand Dollars ($6,680,000) and (b) eighty per cent (80%) of the Construction Cost of the relevant Newbuilding.

2.3.3

The amount of each Pre-delivery Advance shall be:

(a)

in the case of each First Advance, not more than $417,500;

(b)

in the case of each Second Advance, not more than $1,252,500; and

(c)

in the case of each Third Advance, not more than $1,252,500.

2.3.4

Each First Advance:

(a)

shall be applied in or towards payment to the Builders and, as the case may be, Iota of part of the second instalment of the Contract Price and part of the second instalment of the Supervision Cost (respectively) for the Newbuilding relevant to such Advance;

(b)

shall be made when both such instalments have become due and payable, as specified in the second and third column, respectively, of schedule 3 opposite the relevant First Advance; and

(c)

shall be paid by the Bank to the Builders and Iota, respectively, unless the relevant Borrower has already paid either such instalment to the Builders or (as the case may be) Iota when it was due, in which case the relevant First Advance (or part thereof) shall be advanced to the Borrowers in refinancing of such payment.

2.3.5

Each Second Advance:

(a)

shall be applied (i) first, in or towards payment to the Builders of the full amount of the third instalment of the Contract Price for the Newbuilding relevant to such Advance and (ii) secondly, as to its balance in refinancing of any other part of the Construction Cost of the relevant Newbuilding previously paid by the relevant Borrower when it was due and not financed or refinanced by this Agreement;

(b)

shall be made when the instalment referred to in paragraph 2.3.5(a)(i) above has become due and payable, as specified in the second column of schedule 3 opposite the relevant Second Advance; and

(c)

(except for the part of the relevant Second Advance referred to in paragraph 2.3.5(a)(ii) above, which shall be paid directly to the Borrowers) shall be paid by the Bank to the Builders, unless the relevant Borrower has already paid the relevant third instalment to the Builders when it was due, in which case the relevant Second Advance (or part thereof) shall be advanced to the Borrowers in refinancing of such payment.

2.3.6

Each Third Advance:

(a)

shall be applied in or towards payment to the Builders and, as the case may be, Iota of part of the fourth instalment of the Contract Price and part of the third instalment of the Supervision Cost (respectively) for the Newbuilding relevant to such Advance;

(b)

shall be made when both such instalments have become due and payable, as specified in the second and third column, respectively, of schedule 3 opposite the relevant Third Advance; and

(c)

shall be paid by the Bank to the Builders and Iota, respectively, unless the relevant Borrower has already paid either such instalment to the Builders or (as the case may be) Iota when it was due, in which case the relevant Third Advance (or part thereof) shall be advanced to the Borrowers in refinancing of such payment.

2.3.7

Each Delivery Advance:

(a)

shall not exceed the lower of:

(i)

Three million seven hundred and fifty seven thousand five hundred Dollars ($3,750,500);

(ii)

the amount in Dollars which, when added to the aggregate amount of the Pre-delivery Advances for the relevant Newbuilding actually drawn down, will produce a figure equal to eighty per cent (80%) of the Construction Cost of that Newbuilding;

(iii)

the amount in Dollars which, when added to the aggregate amount of the Pre-delivery Advances for the relevant Newbuilding actually drawn down, will produce a figure equal to eighty per cent (80%) of the market value of that Newbuilding determined in accordance with the valuation of such Newbuilding obtained pursuant to schedule 2, Part 5, paragraph 19; and

(iv)

the amount in Dollars which, when added to the aggregate amount of the Pre-delivery Advances for the relevant Newbuilding actually drawn down, will produce a total figure of $6,680,000;

(b)

shall be applied (i) first, in or towards payment to the Builders and, as the case may be, Iota of part of the final instalment of the Contract Price and the final instalment of the Supervision Cost (respectively) for the Newbuilding relevant to such Advance and (ii) secondly, as to its balance in refinancing of any other part of the Construction Cost of the relevant Newbuilding previously paid by the relevant Borrower when it was due and not financed or refinanced by this Agreement;

(c)

shall be made when both of the instalments referred to in paragraph 2.3.7(b)(i) above have become due and payable; and

(d)

(except for the part of the relevant Delivery Advance referred to in paragraph 2.3.7(b)(ii) above, which shall be paid directly to the Borrowers) shall be paid by the Bank to the Builders and Iota, respectively, unless the relevant Borrower has already paid either such instalment to the Builders or (as the case may be) Iota when it was due, in which case the relevant Delivery Advance (or part thereof) shall be advanced to the Borrowers in refinancing of such payment.

2.4

Availability

Upon receipt of a Drawdown Notice complying with the terms of this Agreement the Bank shall, subject to the provisions of clause 9, on the date specified in the Drawdown Notice make the relevant Advance available to the Borrowers in accordance with clause 6.2. The Borrowers acknowledge that payment of any Advance to Iota or, as the case may be, the Builders, or either of them, in accordance with clause 6.2 shall satisfy the obligation of the Bank to lend that Advance to the Borrowers under this Agreement.

2.5

Termination of Commitment

Any part of the Commitment undrawn and uncancelled by the relevant Termination Date, shall thereupon be automatically cancelled.

2.6

Application of proceeds

Without prejudice to the Borrowers’ obligations under clause 8.1.3, the Bank shall have no responsibility for the application of proceeds of the Loan or any part thereof by the Borrowers.

3

Interest and Interest Periods

3.1

Normal interest rate

Subject to paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement, the Borrowers shall pay interest on each Tranche in respect of each Interest Period relating thereto on each Interest Payment Date (or, in the case of Interest Periods of more than three (3) months, by instalments, the first three (3) months from the commencement of the Interest Period and the subsequent instalments at intervals of three (3) months or, if shorter, the period from the date of the preceding instalment until the Interest Payment Date relative to such Interest Period) at the rate per annum determined by the Bank to be the aggregate of (a) the Margin, (b) the Additional Cost and (c) LIBOR for such Interest Period.

3.2

Selection of Interest Periods

Subject to paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement, the Borrowers may by notice received by the Bank not later than 10:00 a.m. on the second Banking Day before the beginning of each Interest Period, specify whether such Interest Period shall have a duration of one (1) month, two (2) months, (3) months, six (6) months or twelve (12) months or such other period as the Borrowers may select and the Bank may, in its absolute discretion, agree

Provided always that if, on any date upon which an Interest Period falls to be selected by the Borrowers pursuant to this clause 3.2, a Transaction or Transactions (which is/are effective or which shall become effective during the relevant Interest Period) shall have been entered into between the Bank and the Borrowers pursuant to the Master Swap Agreement, LIBOR shall, during the period of any such Transaction(s) and for an amount equal to the notional amount of such Transaction(s), be determined by reference to the rate for deposits in Dollars displayed on Telerate page 3750 (British Bankers’ Association Settlement Rates) in accordance with the proviso to the definition of LIBOR in clause 1.2 and, for the avoidance of doubt, LIBOR for that part of the Loan which exceeds the notional amount of the Transaction(s) shall be determined by reference to the rate for deposits in Dollars referred to in the definition of LIBOR in clause 1.2 but excluding the proviso to such definition.

3.3

Determination of Interest Periods

Subject to paragraph (i) of Part 5 of the Schedule to the Master Swap Agreement, every Interest Period shall be of the duration required by, or specified by the Borrowers pursuant to, clause 3.2 but so that:

3.3.1

the initial Interest Period in respect of each Advance shall commence on the Drawdown Date of such Advance and each subsequent Interest Period in respect thereof shall commence on the last day of the previous Interest Period for such Advance;

3.3.2

the initial Interest Period in respect of each Advance in respect of a Newbuilding (after the first Advance to be drawn down in respect of such Newbuilding) shall end on the same day as the then current Interest Period for the Tranche for such Newbuilding and, on the last day of such Interest Period, such Advances shall be consolidated into, and shall thereafter constitute, the Tranche in respect of such Newbuilding;

3.3.3

if any Interest Period in respect of a Tranche would otherwise overrun a Repayment Date for such Tranche, then, in the case of the last Repayment Date for such Tranche, such Interest Period shall end on such Repayment Date, and in the case of any other Repayment Date or Repayment Dates for such Tranche, the relevant Tranche shall be divided into parts so that there is one part in the amount of the repayment instalment or instalments due on each Repayment Date for such Tranche falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the balance of the relevant Tranche having an Interest Period ascertained in accordance with clause 3.2 and the other provisions of this clause 3.3, and

3.3.4

if the Borrowers fail to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3, such Interest Period shall have a duration of three (3) months or such other period as shall comply with this clause 3.3.

3.4

Default interest

If the Borrowers fail to pay any sum (including, without limitation, any sum payable pursuant to this clause 3.4) on its due date for payment under any of the Security Documents (other than the Master Swap Agreement), the Borrowers shall pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before judgment) at a rate determined by the Bank pursuant to this clause 3.4. The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than six (6) months as selected by the Bank each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Bank) of (a) one per cent (1%) per annum, (b) the Margin, (c) the Additional Cost and (d) LIBOR for such period. Such interest shall be due and payable on the last day of each such period as determined by the Bank and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that, if such unpaid sum is an amount of principal which became due and payable by reason of a declaration by the Bank under clause 10.2.2 or a prepayment pursuant to clauses 4.3, 8.2 or 12.1, on a date other than an Interest Payment Date relating thereto, the first such period selected by the Bank shall be of a duration equal to the

period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate one per cent (1%) above the rate applicable thereto immediately before it shall have become so due and payable. If, for the reasons specified in clause 3.6.1, the Bank is unable to determine a rate in accordance with the foregoing provisions of this clause 3.4, interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Bank to be one per cent (1%) per annum above the aggregate of the Margin and the cost of funds (including Additional Cost) to the Bank.

3.5

Notification of Interest Periods and interest rate

The Bank shall notify the Borrowers promptly of the duration of each Interest Period and of each rate of interest determined by it under this clause 3.

3.6

Market disruption; non-availability

3.6.1

If and whenever, at any time prior to the commencement of any Interest Period, the Bank shall have determined (which determination shall, in the absence of manifest error, be conclusive):

(a)

that adequate and fair means do not exist for ascertaining LIBOR during such Interest Period; or

(b)

that deposits in Dollars are not available to the Bank in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan for such Interest Period,

the Bank shall forthwith give notice (a “Determination Notice”) thereof to the Borrowers. A Determination Notice shall contain particulars of the relevant circumstances giving rise to its issue. After the giving of any Determination Notice the undrawn amount of the Commitment shall not be borrowed until notice to the contrary is given to the Borrowers by the Bank.

3.6.2

During the period of ten (10) days after any Determination Notice has been given by the Bank under clause 3.6.1, the Bank shall certify an alternative basis (the “Substitute Basis”) for maintaining the Loan. The Substitute Basis may (without limitation) include alternative interest periods, alternative currencies or alternative rates of interest but shall include a margin above the cost of funds, including Additional Cost, if any, to the Bank equivalent to the Margin. Each Substitute Basis so certified shall be binding upon the Borrowers and shall take effect in accordance with its terms from the date specified in the Determination Notice until such time as the Bank notifies the Borrowers that none of the circumstances specified in clause 3.6.1 continues to exist whereupon the normal interest rate fixing provisions of this Agreement shall apply.

4

Repayment and prepayment

4.1

Repayment

The Borrowers shall repay each Tranche by forty eight (48) instalments, one such instalment to be repaid on each of the Repayment Dates for such Tranche. Subject to the provisions of this Agreement, the amount of each of the repayment instalments (other than the last repayment instalment) for each Tranche shall be One hundred and forty thousand Dollars ($140,000) and the amount of the last repayment instalment for each Tranche shall be One hundred thousand Dollars ($100,000). If the Commitment in respect of any Tranche or part thereof is not drawn in full, the amount of the repayment instalments in respect of the relevant Tranche shall be reduced proportionately.

4.2

Voluntary prepayment

The Borrowers may prepay any Tranche in whole or part (being Two hundred thousand Dollars ($200,000) or any larger sum which is an integral multiple of Two hundred thousand Dollars ($200,000)) on any Interest Payment Date relating to the part of the Tranche to be prepaid, without premium or penalty.

4.3

Prepayment on Total Loss or demand under Refund Guarantees

4.3.1

Before first drawdown - Newbuildings

On a Newbuilding becoming a Total Loss or suffering damage or being involved in an incident which, in the opinion of the Bank, may result in such Newbuilding being subsequently determined to be a Total Loss, before any Advance for such Newbuilding is drawn down, the obligation of the Bank to advance the Tranche (or part thereof) for such Newbuilding shall immediately cease and the Commitment shall be reduced accordingly.

4.3.2

Before first drawdown - Collateral Ship

On the Collateral Ship becoming a Total Loss or suffering damage or being involved in an incident which, in the opinion of the Bank, may result in the Collateral Ship being subsequently determined to be a Total Loss, before any Advance is drawn down, the Commitment will be reduced by such amount (and in respect of such Advances) as the Bank may in its absolute discretion require and the Bank’s obligation to make available any Advances (or any part thereof) which comprise the part of the Commitment that was so cancelled shall immediately cease.

4.3.3

After first drawdown but prior to Delivery - Newbuildings

(a)

On a Newbuilding becoming a Total Loss or suffering damage or being involved in an incident which, in the opinion of the Bank, may result in such Newbuilding being subsequently determined to be a Total Loss, after any Advance for such Newbuilding has been drawn down but prior to the drawing of the Delivery Advance for such Newbuilding, the obligation of the Bank to advance any other Advance (or part thereof) for such Newbuilding shall immediately cease, the Commitment shall be reduced accordingly and the Borrowers shall prepay the Pre-delivery Advances for such Newbuilding in full.

(b)

If a claim is made under any Refund Guarantee and such claim is not paid within twenty (20) Banking Days of it being made (whether or not such claim has been referred to the appropriate courts pursuant to the relevant Refund Guarantee), then (a) the obligation of the Bank to advance any other Advance (or any part thereof) for the Newbuilding relevant to such Refund Guarantee shall immediately cease and (b) forthwith on the expiry of such twenty (20) day period the Borrowers shall prepay in full the then outstanding Advances in respect of that Newbuilding Provided however that if the relevant claim made under the Contract to which such Refund Guarantee relates has been referred to arbitration under the terms of such Contract, the time-limit (and the corresponding prepayment obligation of the Borrowers) referred to in paragraph (b) of this clause shall be extended to ninety (90) days of the claim under the relevant Refund Guarantee being made.

4.3.4

After first drawdown but prior to Delivery - Collateral Ship

On the Collateral Ship becoming a Total Loss or suffering damage or being involved in an incident which, in the opinion of the Bank, may result in the Collateral Ship being subsequently determined to be a Total Loss, during the Drawdown Period of all the Delivery Advances but following the drawing of the first Advance to be drawn down, the Commitment shall be reduced by such amount (and in respect of such Advances) as the Bank may require in its absolute discretion and the Bank’s obligation to make available any Advances (or any part thereof) which comprise the part of the Commitment that was so cancelled shall immediately cease and the Borrowers shall prepay such amount of the Loan (and in respect of such Advances and/or Tranches) as the Bank may require in its absolute discretion.

4.3.5

Thereafter - Mortgaged Ships

On the date falling one hundred and twenty (120) days after that on which a Mortgaged Ship became a Total Loss or, if earlier, on the date upon which the insurance proceeds in respect of such Total Loss are, or Requisition Compensation for such Ship is, received by the relevant Borrower (or the

Bank pursuant to the Security Documents), the Borrowers shall prepay the Tranche for such Mortgaged Ship in full.

4.3.6

Interpretation

For the purpose of this Agreement, a Total Loss in respect of a Ship shall be deemed to have occurred:

(a)

in the case of an actual total loss of a Ship, on the actual date and at the time such Ship was lost or, if such date is not known, on the date on which such Ship was last reported;

(b)

in the case of a constructive total loss of a Ship, upon the date and at the time notice of abandonment of such Ship is given to the insurers of such Ship for the time being;

(c)

in the case of a compromised or arranged total loss of a Ship, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of such Ship;

(d)

in the case of Compulsory Acquisition of such Ship, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and

(e)

in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of a Ship (other than where the same amounts to Compulsory Acquisition of such Ship) by any Government Entity, or by persons purporting to act on behalf of any Government Entity, which deprives the relevant Owner of the use of such Ship for more than thirty (30) days, upon the expiry of the period of thirty (30) days after the date upon which the relevant hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation occurred.

4.4

Amounts payable on prepayment

Any prepayment of all or part of the Loan under this Agreement shall be made together with (a) accrued interest on the amount to be prepaid to the date of such prepayment, (b) any additional amount payable under clauses 6.6 or 12.2 and (c) all other sums payable by the Borrowers to the Bank under this Agreement or any of the other Security Documents including, without limitation, any accrued commitment commission payable under clause 5.1.2 and any amounts payable under clause 11.

4.5

Notice of prepayment; reduction of repayment Instalments

4.5.1

No prepayment may be effected under clause 4.2 unless the Borrowers shall have given the Bank at least fourteen (14) days’ notice of their intention to make such prepayment. Every notice of prepayment shall be effective only on actual receipt by the Bank, shall be irrevocable, shall specify the Tranche and the amount thereof to be prepaid and shall oblige the Borrowers to make such prepayment on the date specified.

4.5.2

Any amount prepaid pursuant to clause 4.2 in respect of a Tranche shall be applied in reducing the repayment instalments of the relevant Tranche under clause 4.1 in inverse order of their due dates for payment.

4.5.3

Any amount prepaid pursuant to clause 4.3.4 shall be applied in reducing such Advances and/or the repayment instalments of such Tranches, and in such manner, as the Bank may require in its absolute discretion.

4.5.4

Any amount prepaid pursuant to clause 8.2.1(a) shall be applied in prepayment of all Tranches proportionately as between them and in reduction of the repayment instalments of each Tranche in inverse order of their due dates for payment.

4.5.5

The Borrowers may not prepay the Loan or any part thereof save as expressly provided in this Agreement. No amount prepaid under this Agreement may be re-borrowed.

4.6