Exhibit 10.1

Execution Version

AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF

NOVEMBER 2, 2011

AMONG

HORNBECK OFFSHORE SERVICES, LLC

and

HORNBECK OFFSHORE TRANSPORTATION, LLC,

AS BORROWERS,

HORNBECK OFFSHORE SERVICES, INC.,

AS PARENT GUARANTOR,

WELLS FARGO BANK, N.A.,

AS ADMINISTRATIVE AGENT

AND

THE LENDERS PARTY HERETO

SOLE LEAD ARRANGER AND SOLE BOOKRUNNER

WELLS FARGO SECURITIES, LLC

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TABLE OF CONTENTS

Page

 

ARTICLE I

   Definitions and Accounting Matters      1   

Section 1.01

  

Terms Defined Above

     1   

Section 1.02

  

Certain Defined Terms

     1   

Section 1.03

  

Types of Loans and Borrowings

     20   

Section 1.04

  

Terms Generally; Rules of Construction

     20   

Section 1.05

  

Accounting Terms and Determinations; GAAP

     21   

ARTICLE II

  

The Credits

     21   

Section 2.01

  

Commitments

     21   

Section 2.02

  

Reserved

     22   

Section 2.03

  

Borrowings; Several Obligations

     22   

Section 2.04

  

Interest Elections

     24   

Section 2.05

  

Funding of Borrowings

     25   

Section 2.06

  

Termination and Reduction of Commitments

     25   

Section 2.07

  

Reserved

     26   

Section 2.08

  

Letters of Credit

     26   

Section 2.09

  

Swing Line Loans

     30   

Section 2.10

  

Commitment Increase

     32   

Section 2.11

  

Joint and Several Liability of the Borrowers

     34   

Section 2.12

  

Replacement of Lender

     35   

Section 2.13

  

Defaulting Lenders

     35   

ARTICLE III

  

Payments of Principal and Interest; Prepayments; Fees

     38   

Section 3.01

  

Repayment of Loans

     38   

Section 3.02

  

Interest

     38   

Section 3.03

  

Alternate Rate of Interest

     38   

Section 3.04

  

Prepayments

     39   

Section 3.05

  

Fees

     40   

ARTICLE IV

  

Payments; Pro Rata Treatment; Sharing of Set-offs

     41   

Section 4.01

  

Payments; Pro Rata Treatment; Sharing of Set-offs

     41   

Section 4.02

  

Presumption of Payment by the Borrowers

     42   

Section 4.03

  

Certain Deductions by the Administrative Agent

     42   

ARTICLE V

  

Increased Costs; Break Funding Payments; Taxes; Illegality

     43   

Section 5.01

  

Increased Costs

     43   

Section 5.02

  

Break Funding Payments

     44   

Section 5.03

  

Taxes

     44   

Section 5.04

  

Mitigation Obligations

     47   

Section 5.05

  

Illegality

     47   

ARTICLE VI

  

Conditions Precedent

     48   

Section 6.01

  

Effective Date

     48   

Section 6.02

  

Each Credit Event

     50   

ARTICLE VII

  

Representations and Warranties

     50   

 

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Section 7.01

   Organization; Powers      51   

Section 7.02

  

Authority; Enforceability

     51   

Section 7.03

  

Approvals; No Conflicts

     51   

Section 7.04

  

Financial Projections; No Material Adverse Change

     51   

Section 7.05

  

Litigation

     52   

Section 7.06

  

Environmental Matters

     52   

Section 7.07

  

Compliance with the Laws and Agreements; No Defaults

     53   

Section 7.08

  

Investment Company Act

     53   

Section 7.09

  

Reserved

     53   

Section 7.10

  

Taxes

     53   

Section 7.11

  

ERISA

     54   

Section 7.12

  

Disclosure; No Material Misstatements

     54   

Section 7.13

  

Insurance

     55   

Section 7.14

  

Restriction on Liens

     55   

Section 7.15

  

Subsidiaries

     55   

Section 7.16

  

Location of Business and Offices

     55   

Section 7.17

  

Properties; Titles, Etc

     55   

Section 7.18

  

Reserved

     56   

Section 7.19

  

Swap Agreements

     56   

Section 7.20

  

Use of Proceeds

     56   

Section 7.21

  

Solvency

     56   

ARTICLE VIII

  

Affirmative Covenants

     56   

Section 8.01

  

Financial Statements and Reports

     56   

Section 8.02

  

Certificates of Compliance

     57   

Section 8.03

  

Taxes and Other Liens

     58   

Section 8.04

  

Existence; Compliance

     58   

Section 8.05

  

Further Assurances

     58   

Section 8.06

  

Performance of Obligations

     59   

Section 8.07

  

Reserved

     59   

Section 8.08

  

Insurance

     59   

Section 8.09

  

Accounts and Records

     61   

Section 8.10

  

Right of Inspection

     61   

Section 8.11

  

Maintenance of Properties

     61   

Section 8.12

  

Notice of Certain Events

     61   

Section 8.13

  

ERISA Information and Compliance

     62   

Section 8.14

  

Charters

     62   

Section 8.15

  

Security

     63   

Section 8.16

  

Collateral Value

     63   

Section 8.17

  

Deposit Accounts

     64   

Section 8.18

  

Appraisal

     64   

Section 8.19

   Liquidity      64   

ARTICLE IX

   Negative Covenants      64   

Section 9.01

   Financial Covenants      65   

Section 9.02

   Debt      65   

Section 9.03

   Liens      65   

Section 9.04

   Restricted Payments      67   

 

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Section 9.05

   Nature of Business      68   

Section 9.06

  

Mergers, Acquisitions, New Subsidiaries

     68   

Section 9.07

  

ERISA Compliance

     69   

Section 9.08

  

Indentures

     70   

Section 9.09

  

Prepayment of the Indentures and Other Debt

     70   

Section 9.10

  

Loans

     70   

Section 9.11

  

Proceeds of Loans

     71   

Section 9.12

  

Transactions with Affiliates

     71   

Section 9.13

  

Reserved

     71   

Section 9.14

  

Reserved

     71   

Section 9.15

  

Sale of Properties

     71   

Section 9.16

  

Negative Pledge Agreements; Dividend Restrictions

     72   

ARTICLE X

  

Events of Default; Remedies

     72   

Section 10.01

  

Events of Default

     72   

Section 10.02

  

Remedies

     74   

Section 10.03

  

Reserved

     75   

Section 10.04

  

Acceleration of Swap Agreements

     75   

ARTICLE XI

  

The Administrative Agent

     75   

Section 11.01

  

Appointment; Powers

     75   

Section 11.02

  

Duties and Obligations of the Administrative Agent

     75   

Section 11.03

  

Action by Administrative Agent

     76   

Section 11.04

  

Reliance by Administrative Agent

     77   

Section 11.05

  

Sub-Administrative Agents

     77   

Section 11.06

  

Resignation or Removal of Administrative Agent

     77   

Section 11.07

  

Administrative Agents as Lenders

     78   

Section 11.08

  

No Reliance

     78   

Section 11.09

  

Administrative Agent May File Proofs of Claim

     78   

Section 11.10

  

Authority of the Administrative Agent to Release Collateral and Liens

     79   

ARTICLE XII

  

Miscellaneous

     79   

Section 12.01

  

Notices

     79   

Section 12.02

  

Waivers; Amendments.

     80   

Section 12.03

  

Expenses, Indemnity; Damage Waiver

     81   

Section 12.04

  

Successors and Assigns

     83   

Section 12.05

  

Survival; Revival; Reinstatement

     86   

Section 12.06

  

Counterparts; Integration; Effectiveness

     87   

Section 12.07

  

Severability

     87   

Section 12.08

  

Right of Setoff

     87   

Section 12.09

  

GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL

     88   

Section 12.10

  

Headings

     89   

Section 12.11

  

Confidentiality

     89   

Section 12.12

   Interest Rate Limitation      89   

Section 12.13

   EXCULPATION PROVISIONS      90   

Section 12.14

   Collateral Matters; Swap Agreements      90   

Section 12.15

   No Third Party Beneficiaries      91   

Section 12.16

   Electronic Communications      91   

 

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Section 12.17

   USA Patriot Act Notice      92   

Section 12.18

   Existing Credit Agreement      92   

Section 12.19

   Reallocation of Commitments      93   

ANNEXES, EXHIBITS, AND SCHEDULES

 

Annex I

   Amended and Restated Credit Agreement Commitments

Annex II

   Existing Credit Agreement Commitments

Exhibit A-1

   Form of Note

Exhibit A-2

   Form of Swing Line Note

Exhibit B-1

   Form of Swing Line Notice

Exhibit B-2

   Form of Borrowing Request

Exhibit B-3

   Form of Notice of Prepayment

Exhibit C

   Form of Interest Election Request

Exhibit D

   Form of Closing Certificate

Exhibit E

   Form of Legal Opinion of Winstead PC

Exhibit F-1

   Form of Guaranty and Collateral Agreement

Exhibit F-2

   Form of Fleet Mortgage

Exhibit G

   Form of Assignment and Assumption Agreement

Exhibit H-1

   Form of Commitment Increase Certificate

Exhibit H-2

   Form of Additional Lender Certificate

Exhibits I-1 –I-4

   Forms of Tax Certificates Schedule 7.05    Litigation

Schedule 7.06(f)

   Property Subject to OPA

Schedule 7.15

   Subsidiaries

Schedule 7.17

   Properties, Titles, Etc.

Schedule 7.19

   Swap Agreements

Schedule 8.16

   Vessel Collateral

Schedule 12.01(a)

   Notice Information of Additional Lenders

 

-iv-

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THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 2, 2011 (the
“Effective Date”), is among: Hornbeck Offshore Services, LLC and Hornbeck
Offshore Transportation, LLC, each a limited liability company duly formed and
existing under the laws of the State of Delaware (collectively, the “Borrowers”
and individually, a “Borrower”); Hornbeck Offshore Services, Inc., a corporation
duly formed and existing under the laws of the State of Delaware (the “Parent
Guarantor”); each of the Lenders from time to time party hereto; and Wells Fargo
Bank, N.A. (in its individual capacity, “Wells Fargo”), as administrative agent
for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”).

R E C I T A L S

A. The Borrowers, certain of the Lenders, the Administrative Agent and the other
parties thereto entered into the Existing Credit Agreement (as defined below).

B. The Borrowers have requested and the Lenders have consented to the amendment
and restatement of the Existing Credit Agreement, and the renewal and extension
of all obligations and Indebtedness thereunder.

C. In consideration of the mutual covenants and agreements herein contained and
of the loans, extensions of credit and commitments hereinafter referred to, the
parties hereto agree that the Existing Credit Agreement is amended and restated
as follows:

ARTICLE I

Definitions and Accounting Matters

Section 1.01 Terms Defined Above. As used in this Agreement, each term defined
above has the meaning indicated above.

Section 1.02 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“2013 Convertible Senior Unsecured Notes” means the 1.625% Senior Unsecured
Convertible Notes due 2026 and subject to a first put option in favor of the
holders of such notes in 2013, issued pursuant to the 2013 Convertible Senior
Unsecured Notes Indenture.

“2013 Convertible Senior Unsecured Notes Indenture” means that certain
Indenture, dated as of November 13, 2006, among Hornbeck Offshore Services, Inc.
and Wells Fargo Bank, National Association, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the requirements
thereof.

“2014 Senior Unsecured Notes” means the 6.125% Senior Unsecured Notes due 2014
issued pursuant to the 2014 Senior Unsecured Notes Indenture.

“2014 Senior Unsecured Notes Indenture” means that certain Indenture, dated as
of November 23, 2004, among Hornbeck Offshore Services, Inc. and Wells Fargo
Bank, National Association, as amended, restated, supplemented or otherwise
modified from time to time in accordance with the requirements thereof.

“2017 Senior Unsecured Notes” means the 8% Senior Unsecured Notes due 2017
issued pursuant to the 2017 Senior Unsecured Notes Indenture.

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“2017 Senior Unsecured Notes Indenture” means that certain Indenture, dated as
of August 17, 2009, among Hornbeck Offshore Services, Inc. and Wells Fargo Bank,
National Association, as amended, restated, supplemented or otherwise modified
from time to time in accordance with the requirements thereof.

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Act” has the meaning assigned such term in Section 12.17.

“Additional Lender” has the meaning assigned such term in Section 2.10(a).

“Additional Lender Certificate” has the meaning assigned such term in
Section 2.10(b)(iii).

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affected Loans” has the meaning assigned such term in Section 5.05.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” means this Amended and Restated Credit Agreement, together with any
and all supplements, restatements, renewals, refinances, modifications,
amendments, extensions for any period, increases or rearrangements thereof.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus  1/2 of 1% and (c) the LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively.

“APB 14” means Accounting Standards Codification Topic 470-20 (formerly
Financial Accounting Standards Board (FASB) Staff Position APB14-1, Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)), promulgated by the FASB.

“Applicable Margin” means, for any day, with respect to any ABR Loan, Eurodollar
Loan or the Commitment Fee Rate, as the case may be, the rate per annum set
forth in the grid below, based upon the Leverage Ratio as set forth below:

 

Grid

 

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Pricing

Level

  

Leverage Ratio

   LIBO Rate
Margin   Alternate Base
Rate Margin   Commitment
Fee Rate 1    < 1.50 x    2.00%   1.00%   0.375% 2    > 1.50 x < 2.00 x    2.25%
  1.25%   0.375% 3    > 2.00 x < 2.50 x    2.50%   1.50%   0.500% 4    > 2.50 x
< 3.00 x    2.75%   1.75%   0.500% 5    > 3.00 x    3.00%   2.00%   0.500%

Any increase or decrease in the Applicable Margin under the grid set forth above
with respect to ABR Loans, Eurodollar Loans, or the Commitment Fee Rate, as the
case may be, resulting from a change in the Leverage Ratio shall become
effective as of the first Business Day immediately following the date a
compliance certificate is delivered pursuant to Section 8.02(b); provided,
however, that if a compliance certificate is not delivered when due in
accordance with Section 8.02(b), then Pricing Level 5 shall apply as of the
first Business Day after the date on which such compliance certificate was
required to have been delivered until such compliance certificate is delivered
to the Administrative Agent.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment from time to time in
effect.

“Appraisal” means a written opinion of value of the Vessels by the Surveyor,
including the appraisal prepared by the Surveyor dated March 29, 2011.

“Arranger” means Wells Fargo Securities, LLC in its capacity as sole lead
arranger and sole book runner hereunder.

“Assignment” has the meaning assigned such term in Section 12.04(b)(i).

“Availability Period” means the period from and including the Effective Date to
but excluding the Maturity Date.

“Available Liquidity” means, on any date of determination, the sum of (i) all
amounts available to be borrowed by the Borrowers under this Agreement as of
such date plus (ii) the amount of unencumbered cash and cash equivalents
(determined in accordance with GAAP) of the Parent Guarantor (on a consolidated
basis with its Consolidated Subsidiaries) in excess of $20,000,000.

“Bankruptcy Law” means Title 11, United States Code, or any similar federal or
state law for the relief of debtors.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Board of Directors” means the Board of Directors of the Parent Guarantor or any
other Person, as applicable, or any authorized committee of the Board of
Directors.

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

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“Borrowing Request” means a request by the Borrowers for a Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Houston, Texas are authorized or required by law to
remain closed; and if such day relates to a Borrowing or continuation of, a
payment or prepayment of principal of or interest on, or a conversion of or
into, or the Interest Period for, a Eurodollar Loan or a notice by the Borrowers
with respect to any such Borrowing or continuation, payment, prepayment,
conversion or Interest Period, any day which is also a day on which dealings in
dollar deposits are carried out in the London interbank market.

“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.

“Casualty Event” means any actual, constructive, agreed, compromised or arranged
total loss, material casualty or other insured material damage to, or any
nationalization, requisition, taking under power of eminent domain or by
condemnation or similar proceeding of, any Vessel Collateral.

“Change in Control” means the occurrence of any of the following: (a) the Parent
Guarantor fails to own one hundred percent (100%) of the membership interests of
each Borrower except pursuant to a merger permitted by Section 9.06, (b) the
consummation of any transaction (including, without limitation, any merger or
consolidation, but excluding the effect of any voting arrangement pursuant to
any agreement among the Parent Guarantor and any stockholders of the Parent
Guarantor as in effect on the Effective Date) the result of which is that any
“person” (as such term is used in Section 13(d) (3) of the Exchange Act) becomes
the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or indirectly through one or more
intermediaries, of more than fifty percent (50%) of the voting power of the
outstanding Voting Stock of the Parent Guarantor or (c) the first day on which
more than a majority of the members of the Board of Directors are not Continuing
Directors; provided, however, that a transaction in which the Parent Guarantor
becomes a Subsidiary of another Person (other than a Person that is an
individual) shall not constitute a Change in Control if (i) the stockholders of
the Parent Guarantor immediately prior to such transaction “beneficially own”
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act),
directly or indirectly through one or more intermediaries, at least a majority
of the voting power of the outstanding Voting Stock of such other Person
immediately following the consummation of such transaction and (ii) immediately
following the consummation of such transaction, no “person” (as such term is
defined above), other than such other Person (but including the holders of the
Equity Interests of such other Person), “beneficially owns” (as such term is
defined above), directly or indirectly through one or more intermediaries, more
than fifty percent (50%) of the voting power of the outstanding Voting Stock of
the Parent Guarantor.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

“Commitment” means with respect to each Lender, the commitment of such Lender to
make Loans pursuant to Section 2.01 and Section 2.09(c), to acquire
participations in Letters of Credit pursuant to Section 2.08(d), and to acquire
participations in Swing Line Loans pursuant to Sections 2.09(a) and (c) as such
commitment may be (a) reduced or terminated from time to time pursuant to
Section 2.06, (b) terminated pursuant to ARTICLE X, (c) modified from time to
time to reflect any assignments permitted by Section 12.04 or (d) increased
pursuant to Section 2.10. The initial amount of each Lender’s Commitment shall
be the amount set forth on Annex I attached hereto.

“Commitment Fee Rate” has the meaning assigned such term in the grid contained
in the definition of Applicable Margin.

“Commitment Increase” means any increase of the total Commitments pursuant to
Section 2.10.

“Commitment Increase Certificate” has the meaning assigned such term in
Section 2.10(b)(ii).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Net Income” means, with respect to the Parent Guarantor for any
period, the aggregate of the Net Income of the Parent Guarantor and its
Consolidated Subsidiaries for such period, on a consolidated basis, determined
in accordance with GAAP, before any adjustment for discontinued operations, the
cumulative effect of a change in accounting principles or any extraordinary
items that are unusual and infrequent, as contemplated by GAAP.

“Consolidated Net Tangible Assets” means, with respect to any Person as of any
date, the sum of the amounts that would appear on a consolidated balance sheet
of such Person and its Consolidated Subsidiaries as the total assets of such
Person and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP and after deducting therefrom, (a) to the extent otherwise
included, unamortized debt discount and expenses and other unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
licenses, organization or development expenses and other intangible items and
(b) the aggregate amount of liabilities of such Person and its Consolidated
Subsidiaries which may be properly classified as current liabilities (including
tax accrued as estimated), determined on a consolidated basis in accordance with
GAAP. Notwithstanding the foregoing, deferred drydocking expenses and the HOS
Port leasehold improvements are not included in (a) above.

“Consolidated Subsidiaries” means each Subsidiary of the Parent Guarantor
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Parent Guarantor in accordance with GAAP.

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors who (a) was a member of the Board of Directors on the
Effective Date or (b) was nominated for election to the Board of Directors with
the approval of, or whose election to the Board of Directors was ratified by, at
least two-thirds of the directors who were members of the Board of Directors on
the Effective Date or who were so elected to the Board of Directors thereafter.

 

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“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans, risk participations in
Swing Line Loans and its LC Exposure at such time.

“Debt” means any and all amounts or liabilities owing from time to time by a
Borrower or Guarantor, as applicable, to any Person, including the
Administrative Agent or any of the Lenders, direct or indirect, liquidated or
contingent, now existing or hereafter arising, including without limitation
(i) indebtedness for money borrowed; (ii) unfunded portions of commitments for
money to be borrowed; (iii) the amounts of all standby and commercial letters of
credit and bankers acceptances, matured or unmatured, issued on behalf of a
Borrower or Guarantor, as applicable; (iv) guaranties of the obligations of any
other Person, whether direct or indirect, whether by agreement to purchase the
indebtedness of any other Person or by agreement for the furnishing of funds to
any other Person through the purchase or lease of goods, supplies or services
(or by way of stock purchase, capital contribution, advance or loan) for the
purpose of paying or discharging the indebtedness of any other Person, or
otherwise; (v) the present value of all obligations for the payment of rent or
hire of Property of any kind (real or personal) under leases or lease agreements
required to be capitalized under generally accepted accounting principles, and
(vi) trade payables incurred in the ordinary course of business or otherwise.
For the avoidance of doubt, all Debt subject to APB 14 will be calculated at par
value.

“Debt Covenant” has the meaning assigned such term in Section 9.02.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means, subject to Section 2.13(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrowers in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, any
Swing Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Line Loans) within two Business Days of the date when due, (b) has
notified the Borrowers, the Administrative Agent or any Issuing Lender or Swing
Line Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the
Borrowers, to confirm in writing to the Administrative Agent and the Borrowers
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and
the

 

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Borrowers), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 2.13(b)) upon delivery of written
notice of such determination to the Borrowers, each Issuing Lender, each Swing
Line Lender and each Lender.

“Default Rate” means the rate of interest described in Section 3.02(c).

“Deposit Accounts” means all deposit accounts and demand deposit accounts of the
Parent Guarantor or the Borrowers maintained with the Administrative Agent or
any Lender, but expressly excluding all Investment Accounts and all foreign
accounts of the Borrowers and the Parent Guarantor.

“Disqualified Stock” means any Equity Interests that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is six (6) months after the Maturity Date.

“dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.

“EBITDA” shall mean, for any rolling four fiscal quarter period preceding any
applicable date of calculation, Consolidated Net Income for that period; plus,
without duplication and to the extent included in the calculation of such
Consolidated Net Income for such period, the sum of (a) depreciation,
amortization and all other non-cash expenses for that period; plus (b) gross
interest expense for that period; plus (c) the aggregate amount of federal and
state taxes on or measured by income for that period (whether or not payable
during that period); plus (d) losses on early extinguishment of debt for that
period (including, without limitation, any nonrecurring charges relating to any
premium or penalty paid, write off of deferred finance costs or original issue
discount or other charges in connection with redeeming or otherwise retiring any
Debt prior to its Stated Maturity); plus (e) stock-based compensation expense
reported for that period under FAS 123R; plus or minus, as applicable, (f) any
other adjustment(s) to Consolidated Net Income included by Parent Guarantor in
calculating EBITDA for that period as reported in a public filing with the SEC,
all calculated for Parent Guarantor and its Subsidiaries on a consolidated
basis. Notwithstanding the foregoing, interest income will be included in
EBITDA.

“Environmental Laws” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereafter in effect, pertaining in any way to health, safety, the
environment or the preservation or reclamation of natural resources, in effect
in any and all jurisdictions

 

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in which the Parent Guarantor or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Parent Guarantor or any
Subsidiary is located, including without limitation, the Oil Pollution Act of
1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act (“TSCA”), as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act (“HMTA”), as amended, and other environmental conservation or
protection Governmental Requirements. The term “oil” shall have the meaning
specified in OPA, the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil
and gas waste” shall have the meaning specified in Section 91.1011 of the Texas
Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the
event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property of the Parent
Guarantor or any Subsidiary is located establish a meaning for “oil,” “hazardous
substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is
broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such
broader meaning shall apply for such purpose.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest (but excluding any debt security that is convertible into or
exchangeable for Equity Interests).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.

“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Parent Guarantor, the Borrowers or a Subsidiary would be
deemed to be a “single employer” within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.

“ERISA Event” means: (a) any “reportable event,” as defined in section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan; (b) the
failure of a Plan to meet the minimum funding standards under section 412 of the
Code or section 302 of ERISA (determined without regard to any waiver of the
funding provisions therein or in section 430 of the Code or section 303 of
ERISA); (c) the filing pursuant to section 412 of the Code or section 303 of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Parent Guarantor, a Borrower, a
Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Parent Guarantor,
a Borrower, a Subsidiary or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, but only to the extent
such Plan is subject to section 412 of the Code or section 302 of ERISA; (f) the
incurrence by the Parent Guarantor, a Borrower, a Subsidiary or any ERISA
Affiliate of any liability under section 4062(e) of ERISA or with respect to the
withdrawal or partial withdrawal from any Plan (including as a “substantial
employer,” as defined in section 4001(a)(2) of ERISA) or Multiemployer Plan
(including the incurrence by the Parent Guarantor, a Borrower, a Subsidiary or
any ERISA Affiliate of any Withdrawal Liability); or (g) the receipt by the
Parent Guarantor, a Borrower, a Subsidiary or any ERISA Affiliate of any notice

 

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concerning the imposition of a Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, in endangered or critical status,
within the meaning of section 305 of ERISA, or insolvent or in reorganization,
within the meaning of Title IV of ERISA.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned such term in Section 10.01.

“Excepted Lien” has the meaning assigned such term in Section 9.03.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrowers under Section 2.12) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 5.03(g), and (d) any U.S. federal withholding Taxes
imposed under FATCA.

“Existing Credit Agreement” means the Senior Secured Revolving Credit Agreement
dated September 27, 2006, by and between the Borrowers, Wells Fargo Bank, N.A.,
as administrative agent, and the banks party thereto, as previously amended.

“FATCA” means the Foreign Account Tax Compliance Act as set forth in sections
1471 through 1474 of the Code, as of the date of this Agreement (or any amended
or successor version that is substantively comparable and not materially more
onerous to comply with) and any current or future regulations or official
interpretations thereof.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three (3) federal funds brokers of
recognized standing selected by it.

“Fee Letter” means the letter agreement, dated as of October 18, 2011, between
the Borrowers and the Arranger.

“Fleet Mortgage” means a mortgage in substantially the form of Exhibit F-2, as
the same may be amended, modified or supplemented from time to time.

 

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“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to any Issuing Lender, such Defaulting Lender’s Applicable Percentage of
the outstanding LC Disbursements with respect to Letters of Credit issued by
such Issuing Lender other than LC Disbursements as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders or cash
collateralized in accordance with the terms hereof, and (b) with respect to any
Swing Line Lender, such Defaulting Lender’s Applicable Percentage of outstanding
Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as
to which such Defaulting Lender’s participation obligation has been reallocated
to other Lenders.

“Funded Debt” shall mean, as at any applicable date of calculation, all
outstanding Debt of the Parent Guarantor (on a consolidated basis with its
Consolidated Subsidiaries) that is Debt comprised of money borrowed, letters of
credit and bankers acceptances, matured or unmatured, and the present value of
obligations under Capital Leases, but not (i) Debt comprised of guaranties,
(ii) unfunded commitments to lend, (iii) trade payables and (iv) accruals and
deferrals.

“Funded Net Debt” shall mean, as of any applicable date of calculation, the
difference of (i) Funded Debt, minus (ii) the amount of unencumbered cash and
cash equivalents (determined in accordance with GAAP) owned by Parent Guarantor
(on a consolidated basis with its Consolidated Subsidiaries) in excess of
$20,000,000.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether foreign or
domestic, federal, state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank, department, commissions, boards, officials
and officers or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government over the Parent Guarantor, any Borrower, any Subsidiary, any of their
Properties, the Administrative Agent, the Issuing Lender or any Lender.

“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereafter in effect, including, without limitation, Environmental
Laws, and occupational, safety and health standards or controls, of any
Governmental Authority.

“Guarantors” means, collectively, the Parent Guarantor and each Guarantor
Subsidiary.

“Guarantor Subsidiary” means any Subsidiary that is required to sign a guaranty
pursuant to Section 8.15.

“Guaranty and Collateral Agreement” means an agreement executed by the
Guarantors in substantially the form of Exhibit F-1 unconditionally guarantying
on a joint and several basis, payment of the Indebtedness, as the same may be
amended, modified or supplemented from time to time.

 

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“Hazardous Materials” means: (i) any “hazardous waste” as defined by RCRA;
(ii) any “hazardous substance” as defined by CERCLA; (iii) any “toxic substance”
as defined by TSCA; (iv) any “hazardous material” as defined by HMTA;
(v) asbestos; (vi) polychlorinated biphenyls; (v) any substance the presence of
which on the Vessels is prohibited by any lawful Governmental Requirement from
time to time in force and effect relating to the Vessels; and (vii) any other
substance which by any Governmental Requirement requires special handling in its
collection, storage, treatment or disposal.

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.

“Indebtedness” means any and all amounts owing or to be owing by the Parent
Guarantor, any Borrower, any of the Subsidiaries or any Guarantor whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising: (a) to the
Administrative Agent, the Issuing Lender or any Lender under any Loan Document;
(b) to any Lender, the Administrative Agent or any Affiliate of a Lender or the
Administrative Agent under any Swap Agreement between the Parent Guarantor, any
Borrower or any Subsidiary and such Lender or Administrative Agent or any such
Affiliate of a Lender or the Administrative Agent Agent permitted by the terms
of this Agreement while such Person (or in the case of its Affiliate, the Person
affiliated therewith) is a Lender or the Administrative Agent hereunder and
(c) all renewals, extensions and/or rearrangements of any of the above.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrowers under any Loan Document and (b) to the extent not otherwise described
in subsection (a) above, Other Taxes.

“Indentures” means the 2013 Convertible Senior Unsecured Notes Indenture, the
2014 Senior Unsecured Notes Indenture and the 2017 Senior Unsecured Notes
Indenture.

“Indenture Obligations” means any notes outstanding or hereafter issued under
the Indentures and all obligations related thereto.

“Information” has the meaning assigned such term in Section 12.11.

“Interest Election Request” means a request by the Borrowers to convert or
continue a Borrowing in accordance with Section 2.04.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, three or six months
thereafter, as the Borrowers may elect; provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day; (b) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar

 

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month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period; (c) no Interest Period for a
Borrowing may end after the Maturity Date; and (d) the last Interest Period may
be such shorter period as to end on the Maturity Date. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services, securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any capital contribution to, purchase or other acquisition of any
equity participation or interest in, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
the purchase price of inventory or supplies sold by such Person in the ordinary
course of business); or (c) the purchase or acquisition (in one or a series of
transactions) of Property of another Person that constitutes a business unit.

“Investment Accounts” means all demand, time, savings, passbook or similar
accounts that are primarily used for investment purposes and not for routine
collection or disbursement of funds in the ordinary course of the Borrowers’ or
the Parent Guarantor’s business.

“Issuing Lender” means Wells Fargo Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.08(i).

“LC Commitment” at any time means twenty five million dollars ($25,000,000).

“LC Disbursement” means a payment made by the Issuing Lender pursuant to a
Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrowers at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on Annex I and any other Person that shall
have become a party hereto pursuant to an Assignment, other than any such Person
that ceases to be a party hereto pursuant to an Assignment. Unless the context
otherwise requires, the term “Lenders” includes the Swing Line Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrowers, or entered into by the Borrowers, with the Issuing
Lender relating to any Letter of Credit.

“Leverage Ratio” means the ratio of Funded Net Debt to Pro Forma EBITDA.

“LIBO Rate” means, for the Interest Period with respect to any Eurodollar
Borrowing, the interest rate per annum (rounded upward to the nearest whole
multiple of 1/100 of 1%) equal to (a) the applicable London interbank offered
rate for dollar deposits for such Eurodollar Borrowing appearing on the
applicable Telerate British Bankers Association Interest Settlement Rate page as
of 11:00 a.m. (London,

 

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England time) two Business Days prior to the first day of such Interest Period,
and having a maturity equal to such Interest Period, (b) if the rate as
determined under clause (a) is not available at such time for any reason, the
London interbank offered rate for dollar deposits appearing on Reuters Screen
FRBD as of 11:00 a.m. (London, England time) two Business Days prior to the
first day of such Interest Period, and having a maturity equal to such Interest
Period, and (c) if the rate as determined under clause (a) or clause (b) is not
available at such time for any reason, then the rate determined by the
Administrative Agent to be the rate at which dollar deposits for delivery on the
first day of such Interest Period in immediately available funds in the
approximate amount of the Eurodollar Borrowing being made, continued or
converted by the Administrative Agent and with a term equivalent to such
Interest Period would be offered by the Administrative Agent’s London Branch (or
other branch or Affiliate of the Administrative Agent) to major banks in the
London or other offshore interbank market for such currency at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations relating
to real Property. For the purposes of this Agreement, the Parent Guarantor and
its Subsidiaries shall be deemed to be the owner of any Property which they have
acquired or hold subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.

“Loan Documents” means this Agreement, the Notes, Fee Letter, the Letter of
Credit Agreements, the Letters of Credit, Swap Agreements and the Security
Instruments.

“Loan Parties” means the Borrowers and the Guarantors.

“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, Properties, condition (financial or
otherwise) or results of operations of the Parent Guarantor and its Subsidiaries
taken as a whole, (b) the ability of the Borrowers and the Guarantors, taken as
a whole, to perform any of their payment or other material obligations under the
Loan Documents, (c) the validity or enforceability of any Loan Document or
(d) the ability of the Administrative Agent, the Issuing Lender or any Lender to
enforce any of their respective material rights under the Loan Documents.

“Material Indebtedness” means Funded Debt (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrowers and the Guarantors in an aggregate principal amount
exceeding $25,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrowers or any Guarantor in
respect of any Swap Agreement at any time shall be the Swap Termination Value.

“Maturity Date” means the earlier to occur of (a) November 2, 2016 or (b) the
date that the Commitments are sooner terminated pursuant to Section 2.06(b) or
Section 10.02; provided, that if the 2014 Senior Unsecured Notes remain
outstanding on June 1, 2014, clause (a) of the definition of “Maturity Date”
shall mean June 1, 2014.

 

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“Multiemployer Plan” means a multiemployer plan as defined in section 3(37) or
4001(a)(3) of ERISA.

“Net Income” means, with respect to any Person, the net income (or loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of preferred stock dividends, excluding, however, (a) any gain (but not loss),
together with any related provision for taxes on such gain (but not loss),
realized in connection with (i) any asset sale (including, without limitation,
dispositions pursuant to sale-and-leaseback transactions) or (ii) the
disposition of any securities by such Person or any of its Guarantor
Subsidiaries or the extinguishment of any Debt of such Person or any of its
Guarantor Subsidiaries and (b) any extraordinary or nonrecurring gain (but not
loss), together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).

“Notes” means the promissory notes of the Borrowers described in Section 2.03(c)
and being substantially in the form of Exhibit A-1 together with any and all
supplements, restatements, renewals, refinances, modifications, amendments,
extensions for any period, increases and/or rearrangements thereof including any
Swing Line Notes substantially in the form of Exhibit A-2 hereto.

“Organizational Documents” shall mean, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

“Participant” has the meaning assigned such term in Section 12.04(c)(i).

“Participant Register” has the meaning specified in Section 12.04(f).

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA (other than a Multiemployer Plan), which (a) is currently or hereafter
sponsored, maintained or contributed to by the Parent Guarantor, a Borrower, a
Subsidiary or an ERISA Affiliate or (b) was at any time during the six calendar
years preceding the date hereof, sponsored, maintained or contributed to by the
Parent Guarantor, a Borrower or a Subsidiary or an ERISA Affiliate.

 

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“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Wells Fargo as its prime rate in effect at its principal office in
San Francisco; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

“Pro Forma EBITDA” shall be calculated for all periods as defined in EBITDA
except that, with respect to the Leverage Ratio and Senior Secured Leverage
Ratio only, as of any date of calculation:

(a) with respect to assets acquired by a Subsidiary after December 31, 2010,
whether by out-right purchase thereof or by virtue of a merger of a company that
is not a Subsidiary into a Subsidiary or acquisition by a Subsidiary of any
other company that is not a Subsidiary (which acquisitions or mergers are not
otherwise prohibited by this Agreement), for the first year after the applicable
transaction, EBITDA shall be calculated for the preceding twelve (12) months on
a pro forma basis to include both (A) EBITDA with respect to the newly acquired
assets for the period of time owned by the applicable Subsidiary, and (B) EBITDA
with respect to such newly acquired assets, prior to the applicable Subsidiary’s
acquisition thereof, for the period of time beginning with the day after the
preceding year anniversary of the applicable date of calculation and ending on
the day preceding the date that the applicable Subsidiary acquired such newly
acquired assets (whether by acquisition or merger),

(b) with respect to any newly constructed vessel of a Subsidiary (whether
constructed directly for a Subsidiary or constructed for a third party and
acquired by a Subsidiary within twelve (12) months after its delivery) having
received a QSC during the first year following the delivery and acceptance of
the vessel by a Subsidiary (as to vessels delivered by a shipyard to that
Subsidiary upon its construction) or during the first year following the
acquisition by a Subsidiary (as to vessels constructed for third parties and
acquired by a Subsidiary within twelve (12) months after its delivery), for the
first year after delivery or acquisition of the vessel, as the case may be, the
EBITDA shall be calculated on a pro forma basis to include Qualified Services
Contract EBITDA and, subject to the second sentence of the final paragraph of
this definition, EBITDA for the period from the end of the term of such QSC to
the date that is twelve (12) months after the vessel’s delivery, and

(c) in connection with TTB Sales aggregating five or more of the double-hulled
tank barges, for the first year after such sale aggregating five or more of the
double-hulled tank barges, EBITDA shall be adjusted for the preceding twelve
(12) months on a pro forma basis for any tank barge disposed of in such sale(s)
in a manner acceptable to the Administrative Agent.

Pro forma calculations shall be demonstrated to the reasonable satisfaction of
the Administrative Agent. To the extent that trailing actual EBITDA is not
available for a newly acquired asset or when determining EBITDA for the post-QSC
period for a newly constructed asset, the pro forma calculation for such asset
will be based on other reference data provided by the chief financial officer of
the Parent Guarantor acting in good faith to the reasonable satisfaction of the
Administrative Agent. All references to “Subsidiary” in this definition may
apply equally to the Borrower(s), the Guarantor Subsidiaries or newly created
Subsidiaries.

 

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“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.

“Qualified Services Contract” or “QSC” means, with respect to any newly
constructed, substantially converted or substantially reconstructed offshore
supply vessel, offshore service vessel (including, without limitation, any crew
boat, fast supply vessel, multi-purpose supply vessel (MPSV) and anchor-handling
towing supply (AHTS) vessel), tug, double-hulled tank barge and double-hulled
tanker or other complementary offshore marine vessel delivered to the Parent
Guarantor or any of its Subsidiaries, or any such newly constructed,
substantially converted or substantially reconstructed vessel constructed for a
third party and then acquired by the Parent Guarantor or any of its Subsidiaries
within 365 days of such vessel’s original delivery date, a contract that the
chief financial officer of the Parent Guarantor acting in good faith, designates
as a “Qualified Services Contract”, which contract:

(a) is between the Parent Guarantor or one of its Subsidiaries, on the one hand,
and (i) a Person that satisfies the Parent Guarantor and/or its Subsidiaries’
internally approved credit criteria or (ii) any other Person provided such
contract is supported by letters of credit, performance bonds or guarantees from
a Person that has an investment grade rating, or such contract provides for a
lockbox or similar arrangements or direct payment to the Parent Guarantor or a
Subsidiary by a Person with such an investment grade rating, for the full amount
of the contracted payments due over the four-quarter reference period considered
in calculating Pro Forma EBITDA for the maximum Senior Secured Leverage Ratio
permitted under Section 9.01(b) or Leverage Ratio permitted under
Section 9.01(d), as applicable (or such portion thereof as Parent Guarantor
shall be relying on for purposes of the calculation of Pro Forma EBITDA);

(b) provides for services to be performed by the Parent Guarantor or one of its
Subsidiaries involving the use of such vessel or a charter (bareboat or
otherwise) of such vessel by the Parent Guarantor or one of its Subsidiaries, in
either case for a minimum period of at least 30 days; and

(c) provides for a fixed or minimum day rate or fixed or minimum volume or
freight rates (including, if applicable, lay time and demurrage) for such
vessel.

Should the Borrowers desire to rely on a Qualified Services Contract for
purposes of complying with the maximum Senior Secured Leverage Ratio permitted
under Section 9.01(b) or Leverage Ratio permitted under Section 9.01(d), as
applicable, the Borrowers shall provide to the Administrative Agent a certified
abstract of each such Qualified Services Contract in a form reasonably
acceptable to the Administrative Agent and, upon request by the Administrative
Agent, a certified copy of such contract.

“Qualified Services Contract EBITDA” shall mean, as to an applicable vessel of a
Subsidiary with a Qualified Services Contract, EBITDA attributable to such
vessel under such Qualified Services Contract calculated in good faith by the
chief financial officer of the Parent Guarantor and shall include in the
calculation the revenues earned or (for pro forma calculation purposes) to be
earned pursuant to the Qualified Services Contract relating to such vessel and
the estimated expenses related thereto. Such estimated expenses shall be based
on the expenses of the most nearly comparable vessel in the Subsidiary’s fleet
or the Parent Guarantor’s other Subsidiaries’ fleets or, if no such comparable
vessel exists, then on the industry average for expenses of comparable vessels;
provided, that in determining the estimated expenses attributable to such new
vessel, the calculation shall give effect to the interest expense attributable
to the incurrence, assumption or guarantee of any Debt relating to the
construction or acquisition of such new vessel for the period starting with the
beginning of the four quarter period referred to in the definition of “EBITDA”
for which the calculation of Qualified Services Contract

 

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EBITDA is being made and ending with the delivery or acquisition of the vessel.
Furthermore, (A) the pro forma calculation of Qualified Services Contract EBITDA
attributable to such vessel for the four quarter reference period shall be
reduced by (i) the actual EBITDA earned under the Qualified Services Contract
accounted for in the actual results for the reference period and (ii) any EBITDA
resulting from spot market or other activities prior to the commencement of the
Qualified Services Contract and accounted for in the actual results for the
reference period, and (B) if the contracted day rate for such vessel is reduced
at any time prior to one year from the commencement of service under such
contract, then the Qualified Services Contract EBITDA shall be adjusted to give
effect to the commencement date of the reduced day rate.

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any
Issuing Lender, as applicable.

“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, or defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning thereto.

“Register” has the meaning assigned such term in Section 12.04(b).

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.

“Repayment Date” has the meaning assigned such term in Section 2.09(b).

“Replacement Indentures” has the meaning assigned such term in Section 9.02.

“Request for Advance” has the meaning assigned such term in Section 2.09(c)(i).

“Required Lenders” means, at any time while no Loans or LC Exposure is
outstanding, Lenders having more than fifty percent (50%) of the total
Commitments; and at any time while any Loans or LC Exposure is outstanding,
Lenders holding more than fifty percent (50%) of the outstanding aggregate
principal amount of the Loans and LC Exposure (without regard to any sale by a
Lender of a participation in any Loan under Section 12.04(c)). The Commitment,
Loans and LC Exposure of any Defaulting Lender shall be disregarded in
determining Required Lenders at any time

“Responsible Officer” means, as to any Person, the chief executive officer, the
president, the chief financial officer, the principal accounting officer, the
treasurer or the controller of such Person. Unless otherwise specified, all
references to a Responsible Officer herein shall mean a Responsible Officer of
the Parent Guarantor.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the Parent
Guarantor, either Borrower, or any of its or their Subsidiaries, or any payment
(whether in cash, securities or other Property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the
Parent Guarantor, either Borrower, or any of its or their Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the
Parent Guarantor, either Borrower, or any of its or their Subsidiaries. For the
avoidance of doubt, a net exercise

 

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of options or restricted stock unit awards with the payment of any exercise
price or the settlement of any taxes with respect thereto being accomplished by
surrendering the right to certain shares shall not under any circumstances be
considered to be a Restricted Payment.

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

“Security Instruments” means the Guaranty and Collateral Agreement, each Fleet
Mortgage and any and all other agreements now or hereafter executed and
delivered by the Parent Guarantor, the Borrowers or any other Person as security
for the payment or performance of the Indebtedness, as such agreements securing
the Indebtedness may be amended, modified, supplemented or restated from time to
time.

“Senior Secured Debt” means secured Funded Debt.

“Senior Secured Leverage Ratio” means the ratio of Senior Secured Debt to Pro
Forma EBITDA for the four fiscal quarters ending on the last day of the
preceding fiscal quarter for which financial statements of the Parent Guarantor
have been delivered pursuant to Sections 8.01(a) and (c).

“Stated Maturity” means, with respect to any mandatory sinking fund or other
installment of interest or principal on any series of Debt, the date on which
such payment of interest or principal was scheduled to be paid in the original
documentation governing such Debt, and shall not include any contingent
obligations to repay, Redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof, but shall include any
rights of the holders to require the obligor to repurchase such Debt at any
particular date.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“Stockholders’ Equity” means, as of the last day of any fiscal quarter,
consolidated stockholders’ equity of the Parent Guarantor and its Consolidated
Subsidiaries as of that date determined in accordance with GAAP.”

“Subsidiary” means any Person of which at least a majority of the outstanding
Equity Interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors, manager or other governing body of such
Person (irrespective of whether or not at the time Equity Interests of any other
class or classes of such Person shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or controlled by the Parent Guarantor or one or more of its Subsidiaries or by
the Parent Guarantor and one or more of its Subsidiaries. Unless otherwise
indicated herein, each reference to the term “Subsidiary” shall mean a
Subsidiary of the Parent Guarantor.

 

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“Surveyor” means Dufour, Laskay & Strouse, for so long as it is on the
Administrative Agent’s approved list of surveyors and thereafter any such
surveyor as may be selected pursuant to Section 8.18 provided that following an
Event of Default the Administrative Agent may use such Surveyor or any other
marine surveyor acceptable to the Administrative Agent for purposes of
appraising the Vessels.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions.

“Swap Termination Value” means, in respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.

“Swing Line Lender” means Wells Fargo Bank, N.A. in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning assigned such term in Section 2.09(a).

“Swing Line Loan Notice” means a notice of a borrowing of a Swing Line Loan
pursuant to Section 2.09(b), which, if in writing, shall be substantially in the
form of Exhibit B-1.

“Swing Line Note” has the meaning assigned such term in Section 2.03(c).

“Swing Line Sublimit” means an amount equal to the lesser of (a) $10,000,000 and
(b) the aggregate of the Commitments of all Lenders. The Swing Line Sublimit is
part of, and not in addition to, the Commitments.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Total Debt” means with respect to the Parent Guarantor (on a consolidated basis
with its Consolidated Subsidiaries), as of the last day of any fiscal quarter,
without duplication, (a) all indebtedness for money borrowed, (b) the present
value of all obligations for the payment of rent or hire of Property of any kind
(real or personal) under leases or lease agreements required to be capitalized
under generally accepted accounting principles, (c) guaranties of the
obligations of any other Person, whether direct or indirect, whether by
agreement to purchase the indebtedness of any other Person or by agreement for
the furnishing of funds to any other Person through the purchase or lease of
goods, supplies or services (or by way of stock purchase, capital contribution,
advance or loan) for the purpose of paying or discharging the indebtedness of
any other Person, or otherwise and (d) any other obligations as are or should be
shown as debt on a consolidated balance sheet in accordance with GAAP.

“Total Debt to Capitalization Ratio” means the ratio of (i) Total Debt to
(ii) the sum of Total Debt plus Stockholders’ Equity.

 

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“Transactions” means, with respect to (a) the Borrowers, the execution, delivery
and performance by the Borrowers of this Agreement, and each other Loan Document
to which either is a party, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder, and the granting of
Liens by the Borrowers on Vessel Collateral pursuant to the Security Instruments
and (b) each Guarantor, the execution, delivery and performance by such
Guarantor of each Loan Document to which it is a party, the guaranteeing of the
Indebtedness and the other obligations under the Guaranty and Collateral
Agreement by such Guarantor.

“TTB Sale” means a disposition of all or any portion of the tug, tank and barge
business segment of the Parent Guarantor and its Subsidiaries, whether through a
sale of assets or the shares of the equity securities of any Subsidiary of the
Parent Guarantor.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 5.03(g).

“Vessel Collateral” has the meaning assigned such term in Section 8.15(a).

“Vessels” means, collectively, any vessels subject to Liens in favor of the
Administrative Agent, for the benefit of the Lenders, securing obligations of
the Loan Parties under the Loan Documents and guaranties thereof, and “Vessel”
shall mean any of such Vessels.

“Voting Stock” of any Person as of any date means the Equity Interest of such
Person that is at the time entitled to vote in the election of the board of
directors, managers or trustees of such Person.

“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully diluted basis, are owned by the Parent Guarantor or
one or more of the Wholly Owned Subsidiaries of the Parent Guarantor or are
owned by the Parent Guarantor and one or more of the Wholly Owned Subsidiaries
of the Parent Guarantor.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

“Withholding Agent” means each Borrower and the Administrative Agent.

Section 1.03 Types of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings, respectively, may be classified and referred to by Type
(e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. The phrase “fair market value” when used in
reference to any vessels will be the value of such vessels as set forth in the

 

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most recent Appraisal. Unless the context requires otherwise (a) any definition
of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time supplemented, restated, renewed, refinanced, modified, amended,
extended for any period, increased and/or otherwise rearranged (subject to any
restrictions on such supplements, restatements, renewals, refinances,
modifications, amendments, extensions, increases and/or rearrangements as set
forth in the Loan Documents), (b) any reference herein to any law shall be
construed as referring to such law as amended, modified, codified or reenacted,
in whole or in part, and in effect from time to time, (c) any reference herein
to any Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Documents), (d) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement. No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision.

Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, as in effect from time to time;
provided that, if the Borrowers notify the Administrative Agent that the
Borrowers request an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrowers that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

ARTICLE II

The Credits

Section 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make Loans to the Borrowers during the Availability Period
in an aggregate principal amount that will not result in (a) such Lender’s
Credit Exposure exceeding such Lender’s Commitment or (b) the total Credit
Exposures exceeding the total Commitments. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrowers may borrow,
repay and reborrow the Loans. On the Effective Date:

(i) the Borrowers shall pay all accrued and unpaid commitment fees, break
funding fees, and all other fees that are outstanding under the Existing Credit
Agreement for the account of each “Lender” under the Existing Credit Agreement;

(ii) each “ABR Loan” and “Eurodollar Loan” outstanding under the Existing Credit
Agreement shall be deemed to be repaid with the proceeds of a new ABR Loan or
Eurodollar Loan, as applicable, under this Agreement;

 

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(iii) each Letter of Credit issued and outstanding under the Existing Credit
Agreement shall be deemed issued under this Agreement without the payment of
additional fees; and

(iv) the Existing Credit Agreement shall be superseded by this Agreement and the
commitments thereunder shall terminate and be reallocated hereunder as outlined
on Annex I hereto.

It is the intent of the parties hereto that this Agreement not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence repayment of any such obligations and liabilities and that
this Agreement amend and restate in its entirety the Existing Credit Agreement
and re-evidence the obligations of the Borrowers outstanding thereunder. The
amount of the Commitments on the Effective Date is $300,000,000; provided that
the Borrowers may not borrow more than $250,000,000 until the Administrative
Agent shall have received (i) a new Appraisal covering additional Vessels
identified as such on Schedule 8.16 and (ii) sufficient evidence that Fleet
Mortgages covering such additional Vessels have been filed in the appropriate
office and create a perfected first-priority lien in favor of the Administrative
Agent such that the aggregate fair market value of all Vessel Collateral subject
to such a lien is at least $600,000,000.

Section 2.02 Reserved.

Section 2.03 Borrowings; Several Obligations. Each Loan made shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments are several and no Lender
shall be responsible for any other Lender’s failure to make Loans as required.

(a) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrowers may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement.

(b) Minimum Amounts; Limitation on Number of Borrowings. At the commencement of
each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than
$1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $300,000; provided that an ABR Borrowing may be in an aggregate amount that
is equal to the entire unused balance of the total Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.08(e). Borrowings of more than one Type may be outstanding at the same
time, provided that there shall not at any time be more than a total of seven
(7) Eurodollar Borrowings outstanding.

(c) Notes. Any Lender may request that the Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender, substantially in the
form of Exhibit A-1, as applicable, dated (i) the Effective Date or (ii) the
effective date of an Assignment pursuant to Section 12.04(b), in a principal
amount equal to its Commitment as originally in effect and otherwise duly
completed and such substitute Notes as required by Section 12.04(b); provided
that promissory notes requested in amounts less than $1,000,000 shall require
the consent of the Borrowers, such consent not to be unreasonably withheld or
delayed. The Swing Line Lender may request that the Swing Line Loans be
evidenced by a note (a “Swing Line Note”). In such event, the Borrowers shall
prepare, execute and deliver to the Swing Line Lender a promissory note payable
to the Swing Line Lender, substantially in the form of Exhibit A- 2.

 

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The date, amount, Type, interest rate and Interest Period of each Loan or Swing
Line Loan made by each Lender or Swing Line Lender, as applicable, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books and maintained in accordance with its usual practice.
Failure to make such recordation shall not affect any Lender’s, Swing Line
Lender’s or any Borrowers’ rights or obligations in respect of such Loans or
Swing Line Loans.

(d) Requests for Borrowings. To request a Borrowing, the Borrowers shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., Houston, Texas time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., Houston, Texas time, one Business Day
before the date of the proposed Borrowing; provided that no such notice shall be
required for any deemed request of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as provided in Section 2.08(e). Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in substantially the form of Exhibit B-2 and signed by the Borrowers. Each such
telephonic and written Borrowing Request shall specify the following
information:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

(v) the location and number of the Borrowers’ account to which funds are to be
disbursed.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrowers shall be
deemed to have selected an Interest Period of one month’s duration. Each
Borrowing Request shall constitute a representation to the Administrative Agent
that the amount of the requested Borrowing shall not cause the total Credit
Exposures to exceed the total Commitments.

Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

 

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Section 2.04 Interest Elections.

(a) Conversion and Continuance. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrowers may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this
Section 2.04. The Borrowers may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

(b) Interest Election Requests. To make an election pursuant to this
Section 2.04, the Borrowers shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrowers were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in substantially the form of Exhibit C and
signed by the Borrowers.

(c) Information in Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to Section 2.04(c)(iii) and (iv) shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

(d) If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month’s duration.

(e) Notice to Lenders by the Administrative Agent. Promptly following receipt of
an Interest Election Request, the Administrative Agent shall advise each Lender
of the details thereof and of such Lender’s portion of each resulting Borrowing.

(f) Effect of Failure to Deliver Timely Interest Election Request and Events of
Default. If the Borrowers fail to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default

 

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has occurred and is continuing: (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing (and any Interest Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

Section 2.05 Funding of Borrowings.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., Houston, Texas time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrowers by
promptly crediting the amounts so received, in like funds, to an account of the
Borrowers maintained with the Administrative Agent in Houston, Texas and
designated by the Borrowers in the applicable Borrowing Request; provided that
ABR Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.08(e) shall be remitted by the Administrative Agent to the Issuing
Lender. Nothing herein shall be deemed to obligate any Lender to obtain the
funds for its Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
its Loan in any particular place or manner.

(b) Presumption of Funding by the Lenders. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s Applicable Percentage of such Borrowing, the Administrative Agent may
assume that such Lender has made such Applicable Percentage available on such
date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such
event, if such Lender has not in fact made its Applicable Percentage of the
applicable Borrowing available to Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrowers
to but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, at a rate per annum equal to the Federal Funds Effective
Rate for the first three (3) Business Days after the date such payment is
required, and thereafter at the rate then applicable to Borrowers or (ii) in the
case of the Borrowers, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

Section 2.06 Termination and Reduction of Commitments.

(a) Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date.

(b) Optional Termination and Reduction of Commitments.

(i) The Borrowers may at any time terminate, or from time to time reduce, the
Commitments; provided that (A) each reduction of the Commitments shall be in an
amount that is an integral multiple of $100,000 and not less than $1,000,000 and
(B) the Borrowers shall not terminate or reduce the Commitments if, after giving
effect to any concurrent prepayment of the Loans in accordance with
Section 3.04(c), the total Credit Exposures would exceed the total Commitments.

 

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(ii) The Borrowers shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under Section 2.06(b)(i) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrowers pursuant to this
Section 2.06(b)(ii) shall be irrevocable; provided that a notice of termination
of the Commitments delivered by the Borrowers may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrowers (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent
and may not be reinstated. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with each Lender’s Applicable
Percentage; provided that if any Lender is a Defaulting Lender at such time as
the Borrowers elect to terminate or reduce the Commitments hereunder, the
Borrowers may (in their discretion) apply all or any portion of the Commitments
to be reduced, to the Commitment of any one or more Defaulting Lenders specified
by the Borrowers before applying any remaining reduction to all Lenders.

(c) Mandatory Reduction of Commitments. In the event that the fair market value
of the total Vessel Collateral at any time, based on the most recent Appraisal,
is not greater than or equal to two hundred percent (200%) of the Commitments
from time to time in effect as required by Section 8.16, and the failure to meet
such requirement is not remedied by the taking of any such action provided
therein or within sixty (60) days in any event, then the Commitments shall be
reduced to such amount as will permit the Borrowers to comply with Section 8.16.

Section 2.07 Reserved.

Section 2.08 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrowers
may request, and the Issuing Lender shall cause, the issuance of dollar
denominated Letters of Credit for either Borrower’s own account or for the
account of any of the Subsidiaries, in a form reasonably acceptable to the
Administrative Agent and the Issuing Lender, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrowers
to, or entered into by the Borrowers with, the Issuing Lender relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrowers shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Lender) to the Issuing Lender and the
Administrative Agent (not less than five (5) Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a notice:

(i) requesting the issuance of a Letter of Credit or identifying the Letter of
Credit to be amended, renewed or extended;

(ii) specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day);

 

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(iii) specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.08(c));

(iv) specifying the amount of such Letter of Credit; and

(v) specifying the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.

Each notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (A) the LC
Exposure shall not exceed the LC Commitment and (B) the total Credit Exposures
shall not exceed the total Commitments.

If requested by the Issuing Lender, the Borrowers also shall submit a letter of
credit application on the Issuing Lender’s standard form in connection with any
request for a Letter of Credit.

(c) Expiration Date. Unless an earlier date is specified in Borrower’s request
for a Letter of Credit, such Letter of Credit shall expire at or prior to the
close of business on the date two years after the date of the issuance of such
Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension); provided that no Letter of Credit may have an
expiration date later than the Maturity Date unless such Letter of Credit is
cash collateralized to the satisfaction of the Administrative Agent or a backup
letter of credit from a financial institution satisfactory to the Administrative
Agent is delivered to the Administrative Agent in the name of the Administrative
Agent and for the corresponding amount of such unexpired Letter of Credit.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Lender or the Lenders, the Issuing Lender hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Lender,
a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Lender, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Lender and not reimbursed by the Borrowers
on the date due as provided in Section 2.08(e), or of any reimbursement payment
required to be refunded to the Borrowers for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 2.08(d) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, Houston, Texas time, on the date that
such LC Disbursement is made, if the Borrowers shall have received notice of
such LC Disbursement prior to 11:00 a.m., Houston, Texas time, on such date, or,
if such notice has not been received by the Borrowers prior to such time on such
date, then not later than 12:00 noon, Houston, Texas time, on the Business Day
immediately following the day that the Borrowers receive such notice, if such
notice is not received prior to such time on the day of receipt; provided that
if such LC Disbursement is not less than $300,000, the Borrowers shall, subject
to the conditions to Borrowing set forth herein, be deemed to have requested,
and the Borrowers do hereby request under such circumstances, that such payment
be financed with an ABR Borrowing in an equivalent amount and, to

 

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the extent so financed, the Borrowers’ obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the Borrowers fail to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrowers in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrowers, in
the same manner as provided in Section 2.05(a) with respect to Loans made by
such Lender (and Section 2.05(a) shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Lender the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrowers
pursuant to this Section 2.08(e), the Administrative Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to this Section 2.08(e) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interests may appear. Any payment made
by a Lender pursuant to this Section 2.08(e) to reimburse the Issuing Lender for
any LC Disbursement (other than the funding of ABR Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrowers of their
obligation to reimburse such LC Disbursement.

(f) Obligations Absolute. The Borrowers’ obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Lender under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.08(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrowers’ obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Lender, nor any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Lender; provided that the foregoing shall not be construed to excuse the
Issuing Lender from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrowers to the extent permitted by applicable law)
suffered by the Borrowers that are caused by the Issuing Lender’s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Lender (as finally determined by a court of competent
jurisdiction), the Issuing Lender shall be deemed to have exercised all
requisite care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Lender may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

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(g) Disbursement Procedures. The Issuing Lender shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Lender shall promptly notify the
Administrative Agent and the Borrowers by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Lender has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrowers of their obligation to reimburse the
Issuing Lender and the Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Lender shall make any LC Disbursement,
then, until the Borrowers shall have reimbursed the Issuing Lender for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(e)),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrowers reimburse such LC Disbursement, at the rate per annum then applicable
to ABR Loans. Interest accrued pursuant to this Section 2.08(h) shall be for the
account of the Issuing Lender, except that interest accrued on and after the
date of payment by any Lender pursuant to Section 2.08(e) to reimburse the
Issuing Lender shall be for the account of such Lender to the extent of such
payment.

(i) Replacement of the Issuing Lender. The Issuing Lender may be replaced at any
time by written agreement among the Borrowers, the Administrative Agent, the
replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Borrowers shall pay
all unpaid fees accrued for the account of the replaced Issuing Lender pursuant
to Section 3.05(b). From and after the effective date of any such replacement,
(i) the successor Issuing Lender shall have all the rights and obligations of
the Issuing Lender under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term “Issuing Lender” shall
be deemed to refer to such successor or to any previous Issuing Lender, or to
such successor and all previous Issuing Lenders, as the context shall require.
After the replacement of the Issuing Lender hereunder, the replaced Issuing
Lender shall remain a party hereto and shall continue to have all the rights and
obligations of the Issuing Lender under this Agreement with respect to Letters
of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.

(j) Cash Collateralization. If (i) any Event of Default shall occur and be
continuing and the Borrowers receive notice from the Administrative Agent or the
Required Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), (ii) the Borrowers are required to pay to the Administrative
Agent the excess attributable to an LC Exposure in connection with any
prepayment pursuant to Section 3.04(c) or (iii) the Borrowers are required to
cash collateralize a Defaulting Lender’s LC Exposure pursuant to Sections
2.13(a) or (b), then the Borrowers shall deposit, in an account with the
Administrative Agent designated for such purpose, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to, in the case of an Event of Default, the LC Exposure, in the case of a
payment required by Section 3.04(c), the amount of such excess as provided in
Section 3.04(c), as of such date plus any accrued and unpaid interest thereon
and in the case of a payment required by Sections 2.13(a) or (b), the amount of
such Defaulting Lender’s LC Exposure; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrowers or any
Guarantor described in Section 10.01(h) or Section 10.01(i). The Borrowers
hereby grant to the Administrative Agent, for the benefit of the Issuing Lender
and the Lenders, an exclusive first priority and continuing perfected security
interest in and Lien on such account and all cash, checks, drafts, certificates
and instruments, if any, from time to time deposited or held in such account,
all deposits or wire transfers made thereto, any and all investments purchased
with funds deposited in such account, all interest, dividends, cash,
instruments,

 

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financial assets and other Property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing, and all proceeds, products, accessions, rents, profits, income and
benefits therefrom, and any substitutions and replacements therefor. The
Borrowers’ obligation to deposit amounts pursuant to this Section 2.08(j) shall
be absolute and unconditional, without regard to whether any beneficiary of any
such Letter of Credit has attempted to draw down all or a portion of such amount
under the terms of a Letter of Credit, and, to the fullest extent permitted by
applicable law, shall not be subject to any defense or be affected by a right of
set-off, counterclaim or recoupment which the Borrowers or any of their
Subsidiaries may now or hereafter have against any such beneficiary, the Issuing
Lender, the Administrative Agent, the Lenders or any other Person for any reason
whatsoever. Such deposit of the amount required by this Section 2.08(j) shall be
held as collateral securing the payment and performance of the Borrowers’ and
the Guarantors’ obligations under this Agreement and the other Loan Documents.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over the amount deposited as required by this
Section 2.08(j). Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrowers’ risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent, subject to Section 10.02(c), to reimburse the Issuing
Lender for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated, be applied to satisfy other
obligations of the Borrowers and the Guarantors under this Agreement or the
other Loan Documents. If the Borrowers are required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, and
the Borrowers are not otherwise required to pay to the Administrative Agent the
excess attributable to an LC Exposure in connection with any prepayment pursuant
to Section 3.04(c), then such amount (to the extent not applied as aforesaid)
shall be returned to the Borrowers within three (3) Business Days after all
Events of Default have been cured or waived.

Section 2.09 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to
Borrowers from time to time on any Business Day during the Availability Period
in an aggregate amount not to exceed at any time outstanding the amount of the
Swing Line Sublimit; provided, however, that after giving effect to any Swing
Line Loan, the sum of (i) the outstanding principal balance of all Loans plus
(ii) the LC Exposure shall not exceed the total Commitments; provided further
that the Swing Line Lender shall not be required to make a Swing Line Loan to
refinance an outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrowers may borrow under
this Section 2.09, prepay under Section 3.04, and reborrow under this
Section 2.09. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Loan shall be made upon the Borrowers’
irrevocable notice to the Swing Line Lender and Administrative Agent (a “Swing
Line Loan Notice”), which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
11:00 a.m. Houston, Texas time on the requested borrowing date, and shall
specify (i) the amount to be borrowed and (ii) the requested borrowing date,
which shall be a Business Day. The Borrowers shall pay to the Swing Line Lender
the aggregate outstanding principal amount of all Swing Line Loans on the last
Business Day of each calendar month

 

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(which payment may be made with a Loan as provided in Section 2.09(c)(i) below)
(the “Repayment Date”), which Repayment Date shall in no event be later than the
Maturity Date. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer. Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Administrative Agent (including at the request of any Lender)
prior to 11:00 a.m. Houston, Texas time on the date of the proposed Swing Line
Loan (A) directing the Swing Line Lender not to make such Swing Line Loan as a
result of the limitations set forth in the proviso to the first sentence of
Section 2.09(a), or (B) that one or more of the applicable conditions specified
in Section 6.01 hereof is not then satisfied, then, subject to the terms and
conditions hereof, the Swing Line Lender will, promptly on the borrowing date
specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan
available to the Borrowers.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrowers (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Lender make a Loan in
an amount equal to such Lender’s Applicable Percentage of the amount of the
Swing Line Loans then outstanding. Such request shall be made in writing (which
written request shall be deemed to be a “Request for Advance” for purposes
hereof) and in accordance with the requirements of Section 2.03, without regard
to the minimum and multiples specified therein for the principal amount of
Loans, but subject to the unutilized portion of the total Commitments and the
conditions set forth in Section 6.01. The Swing Line Lender shall furnish the
Borrowers with a copy of the applicable Request for Advance promptly after
delivering such notice to the Administrative Agent. Each Lender shall make an
amount equal to such Lender’s Applicable Percentage of the amount specified in
such Request for Advance available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the Administrative
Agent’s office not later than 12:00 noon Houston, Texas time on the day
specified in such Request for Advance, whereupon subject to Section 2.09(c)(ii),
each Lender that so makes funds available shall be deemed to have made a Loan to
the Borrowers in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Loan
in accordance with Section 2.09(c)(i), the Request for Advance submitted by the
Swing Line Lender as set forth herein shall be deemed to be a request by the
Swing Line Lender that each Lender fund its risk participation in the relevant
Swing Line Loan and each Lender’s payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to Section 2.09(c)(i), shall be deemed
payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.09(c) by the time
specified in Section 2.09(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the Federal Funds Effective Rate for
the first three (3) Business Days after the date such payment is required, and
thereafter at the rate then applicable to the Borrowers.

 

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A certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.

(iv) Each Lender’s obligation to make Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.09(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, the Borrowers or any other
Person for any reason whatsoever, (B) the occurrence or continuance of an Event
of Default after the funding of a Swing Line Loan, (C) the funding of any Swing
Line Loan during the occurrence of an Event of Default if the Swing Line Lender
was unaware of such Event of Default or (D) any other occurrence, event or
condition, whether or not similar to any of the foregoing.

(d) Repayment of Participations.

(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any circumstance (including pursuant to any settlement entered into
by the Swing Line Lender in its discretion), each Lender shall pay to the Swing
Line Lender its Applicable Percentage thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the date such
amount is returned, at a rate per annum equal to the Federal Funds Effective
Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender. The obligations of Lenders under this clause shall survive
the payment in full of the Indebtedness and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrowers for interest on the Swing Line Loans.
Until each Lender funds its Loan or risk participation pursuant to Section 2.09
to refinance such Lender’s Applicable Percentage of any Swing Line Loan,
interest in respect of such Applicable Percentage shall be solely for the
account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

Section 2.10 Commitment Increase.

(a) Subject to the conditions set forth in Section 2.10(b), the Borrowers may
increase the total Commitments then in effect without the prior written consent
of the Lenders by increasing the Commitment of a Lender or by causing a Person
that at such time is not a Lender to become a Lender (an “Additional Lender”).

 

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(b) The increase in the total Commitments shall be subject to the following
additional conditions:

(i) such increase shall not exceed $200,000,000 and the total Commitments after
such increase shall not exceed the least of (A) $500,000,000, (B) twenty percent
(20%) of the Parent Guarantor’s Consolidated Net Tangible Assets as of the last
day of the fiscal quarter immediately preceding such increase for which the most
recent internal financial statements are available, plus $25,000,000, and
(C) the amount permitted by the Indentures;

(ii) if the Borrowers elect to increase the total Commitments by increasing the
Commitment of a Lender, the Borrowers and such Lender shall execute and deliver
to the Administrative Agent a certificate substantially in the form of Exhibit
H-1 (a “Commitment Increase Certificate”);

(iii) if the Borrowers elect to increase the total Commitments by causing an
Additional Lender to become a party to this Agreement, then the Borrowers and
such Additional Lender shall execute and deliver to the Administrative Agent a
certificate substantially in the form of Exhibit H-2 (an “Additional Lender
Certificate”), together with an Administrative Questionnaire and a processing
and recordation fee of $3,500, and the Borrowers shall, if requested by the
Additional Lender, deliver a Note payable to such Additional Lender in a
principal amount equal to its Commitment, and otherwise duly completed; provided
that such Additional Lender must be reasonably acceptable to the Administrative
Agent, the Swing Line Lender and the Issuing Lender;

(iv) no Default shall have occurred and be continuing at the effective date of
such increase;

(v) on the effective date of such increase, no Eurodollar Borrowings shall be
outstanding or if any Eurodollar Borrowings are outstanding, then the effective
date of such increase shall be the last day of the Interest Period in respect of
such Eurodollar Borrowings unless the Borrowers pay compensation required by
Section 5.02;

(vi) no Lender’s Commitment may be increased without the consent of such Lender;

(vii) no increase shall be less than $25,000,000 and shall be in a whole
multiple of $5,000,000 in excess thereof;

(viii) the Borrowers shall remain in compliance with Section 8.16 as of such
date after giving effect to the Commitment Increase; and

(ix) an Appraisal satisfactory to Administrative Agent shall have been obtained
not more than 120 days prior to the effectiveness of such Commitment Increase
with respect to those vessels being added as Vessel Collateral and the
Administrative Agent shall be satisfied that new or amended security instruments
create first priority, perfected Liens on such additional Vessel Collateral
subject only to Excepted Liens identified in clause (a) through (c) of
Section 9.03.

(c) Subject to acceptance and recording thereof pursuant to Section 2.10(d),
from and after the effective date specified in the Commitment Increase
Certificate or the Additional Lender Certificate (or if any Eurodollar
Borrowings are outstanding, then the last day of the Interest Period in respect
of such Eurodollar Borrowings, unless the Borrowers have paid compensation

 

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required by Section 5.02): (A) the amount of the total Commitments shall be
increased as set forth therein, and (B) in the case of an Additional Lender
Certificate, any Additional Lender party thereto shall become a party to this
Agreement and have the rights and obligations of a Lender under this Agreement
and the other Loan Documents. In addition, such Lender or such Additional
Lender, as applicable, shall purchase a pro rata portion of the outstanding
Loans (and participation interests in Letters of Credit) of each of the other
Lenders (and such Lenders hereby agree to sell and to take all such further
action to effectuate such sale) such that each Lender (including any Additional
Lender, if applicable) shall hold its Applicable Percentage of the outstanding
Loans (and participation interests) after giving effect to the increase in the
total Commitments.

(d) Upon its receipt of a duly completed Commitment Increase Certificate or an
Additional Lender Certificate, executed by the Borrowers and the Lender or the
Borrowers and the Additional Lender party thereto, as applicable, the processing
and recording fee referred to in Section 2.10 (b), the Administrative
Questionnaire referred to in Section 2.10(b), if applicable, the written consent
which will not be unreasonably withheld of the Administrative Agent, the Swing
Line Lender and the Issuing Lender to such increase required by Section 2.10(b)
and the Additional Lender, if applicable, and such other certificates, opinions
and documents as the Administrative Agent may reasonably request, the
Administrative Agent shall accept such Commitment Increase Certificate or
Additional Lender Certificate and record the information contained therein in
the Register required to be maintained by the Administrative Agent pursuant to
Section 12.04(b)(iv). No increase in the total Commitments shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this Section 2.10(d). The Administrative Agent shall promptly
provide a copy of the updated Annex I, or a copy of the updated Register, to the
Parent Guarantor.

Section 2.11 Joint and Several Liability of the Borrowers.

(a) Each of the Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the Lenders under
this Agreement, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of them.

(b) Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrower with respect to the payment and
performance of all of the obligations arising under this Agreement and the other
Loan Documents, it being the intention of the parties hereto that all of the
obligations hereunder and under the other Loan Documents shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
between them.

(c) If and to the extent that either of the Borrowers shall fail to make any
payment with respect to any of the obligations hereunder as and when due or to
perform any of such obligations in accordance with the terms thereof, then in
each such event, the other Borrower will make such payment with respect to, or
perform, such obligation.

(d) The provisions of this Section 2.11 are made for the benefit of the Lenders
and their successors and assigns and may be enforced by them from time to time
against either of the Borrowers as often as occasion therefor may arise and
without requirement on the part of the Lenders first to marshall any of its
claims or to exercise any of its rights against the other Borrower or to exhaust
any remedies available to it against the other Borrower or to resort to any
other source or means of obtaining payment of any of the obligations hereunder
or to elect any other remedy. The provisions of this Section 2.11 shall remain
in effect until all the obligations hereunder shall have been paid in full or

 

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otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the obligations, is rescinded or must otherwise be
restored or returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 2.11 will forthwith be reinstated and in effect as though such payment
had not been made.

(e) Notwithstanding any provision to the contrary contained herein or in any of
the other Loan Documents, to the extent the obligations of either Borrower shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Borrower
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation,
Bankruptcy Law).

(f) Each Borrower hereby appoints the other Borrower to act as its agent for all
purposes under this Agreement (including, without limitation, with respect to
all matters relating to the borrowing, conversion, continuance and repayment of
Loans and the applications for the issuance, renewal, extensions or reissuance
of a Letter of Credit) and agrees that (i) any notice or communication delivered
by the Administrative Agent or a Lender to a Borrower shall be deemed delivered
to both Borrowers and (ii) the Administrative Agent and the Lenders may accept,
and be permitted to rely on, any notice, document, instrument or agreement
executed by one Borrower on behalf of the other Borrower.

Section 2.12 Replacement of Lender. The Borrowers shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 5.01 or 5.03, (b) fails to vote in favor of any measure requiring the
affirmative vote of one hundred percent (100%) of the Lenders or (c) is a
Defaulting Lender, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Governmental Requirement,
(ii) no Event of Default shall have occurred and be continuing at the time of
such replacement that has not been waived in accordance with the terms hereof,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 5.04 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 5.01 or 5.03(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrowers shall
be liable to such replaced Lender under Section 5.02 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial institution
shall be reasonably satisfactory to the Administrative Agent and the Issuing
Lender, (vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 12.04 (provided that the Borrowers
shall be obligated to pay the registration and processing fee referred to
therein), (viii) until such time as such replacement shall be consummated, the
Borrowers shall pay all additional amounts (if any) required pursuant to
Section 5.01 or 5.03(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrowers, the
Administrative Agent or any other Lender shall have against the replaced Lender.

Section 2.13 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

 

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(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article X or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to any Issuing Lender or Swing Line Lender hereunder;
third, to cash collateralize the Issuing Lenders’ Fronting Exposure with respect
to such Defaulting Lender in accordance with Section 2.08(j); fourth, as the
Borrowers may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrowers, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) cash collateralize the Issuing
Lenders’ future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.08(j); sixth, to the payment of any amounts owing to the Lenders,
the Issuing Lenders or Swing Line Lenders as a result of any judgment of a court
of competent jurisdiction obtained by any Lender, the Issuing Lenders or Swing
Line Lenders against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Borrowers as a result of any judgment of a court of competent jurisdiction
obtained by the Borrowers against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any Loans or LC Disbursements in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans were made
or the related Letters of Credit were issued at a time when the conditions set
forth in Section 6.02 were satisfied or waived, such payment shall be applied
solely to pay the Loans of, and LC Disbursements owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of, or LC Disbursements owed to, such Defaulting Lender until such time as all
Loans and funded and unfunded participations in LC Commitments and Swing Line
Loans are held by the Lenders pro rata in accordance with the Commitments under
the applicable Facility without giving effect to Section 2.13(a)(iv). Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.13(a)(ii) shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.

(iii) Certain Fees.

(A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any
period during which that Lender is a Defaulting Lender (and the Borrowers shall
not be required to pay any such fee that otherwise would have been required to
have been paid to that Defaulting Lender).

(B) Each Defaulting Lender shall be entitled to receive fees for its
participations in Letters of Credit for any period during which that Lender is a
Defaulting Lender only to the extent allocable to its Applicable Percentage of
the stated amount of Letters of Credit for which it has provided Cash Collateral
pursuant to Section 2.08(j).

 

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(C) With respect to any Commitment Fee or Letter of Credit fee not required to
be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the
Borrowers shall (x) pay to each Non-Defaulting Lender that portion of any such
fee otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in LC Disbursements or Swing Line Loans that has been
reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay
to each Issuing Lender and Swing Line Lender, as applicable, the amount of any
such fee otherwise payable to such Defaulting Lender to the extent allocable to
such Issuing Lender’s or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in LC Disbursements and Swing Line
Loans shall be reallocated among the Non-Defaulting Lenders in accordance with
their respective Applicable Percentages (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent that (x) the conditions
set forth in Section 6.02 are satisfied at the time of such reallocation (and,
unless the Borrowers shall have otherwise notified the Administrative Agent at
such time, the Borrowers shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y) such reallocation does not
cause the aggregate Credit Exposure of any Non-Defaulting Lender to exceed such
Non-Defaulting Lender’s Commitment. No reallocation hereunder shall constitute a
waiver or release of any claim of any party hereunder against a Defaulting
Lender arising from that Lender having become a Defaulting Lender, including any
claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation

(v) Cash Collateral, Repayment of Swing Line Loans. If the reallocation
described in clause (iv) above cannot, or can only partially, be effected, the
Borrowers shall, without prejudice to any right or remedy available to them
hereunder or under law, (x) first, prepay Swing Line Loans in an amount equal to
the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the
Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth
in Section 2.08(j).

(b) Defaulting Lender Cure. If the Borrowers, the Administrative Agent and each
Swing Line Lender and Issuing Lender agree in writing that a Lender is no longer
a Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
cash collateral), that Lender will, to the extent applicable, purchase at par
that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Loans and funded and unfunded participations in Letters of Credit and Swing Line
Loans to be held pro rata by the Lenders in accordance with the Commitments
under the applicable Facility (without giving effect to Section 2.13(a)(iv)),
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrowers while that Lender was a Defaulting Lender;
and provided, further, that except to the extent otherwise expressly agreed by
the affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

(c) New Swing Line Loans/Letters of Credit. So long as any Lender is a
Defaulting Lender, (i) the Swing Line Lender shall not be required to fund any
Swing Line Loans unless it is satisfied that it will have no Fronting Exposure
after giving effect to such Swing Line Loan and (ii) no Issuing Lender shall be
required to issue, extend, renew or increase any Letter of Credit unless it is
satisfied that it will have no Fronting Exposure after giving effect thereto.

 

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ARTICLE III

Payments of Principal and Interest; Prepayments; Fees

Section 3.01 Repayment of Loans.

The Borrowers hereby unconditionally promise to pay to the Administrative Agent,
for the account of each Lender, the then unpaid principal amount of each Loan on
the Maturity Date. The Borrowers hereby unconditionally promise to pay to the
Swing Ling Lender the unpaid principal amount of each Swing Line Loan on the
Repayment Date for such Swing Line Loan.

Section 3.02 Interest.

(a) ABR Loans. The Loans comprising each ABR Borrowing (including each Swing
Line Loan) shall bear interest at the Alternate Base Rate plus the Applicable
Margin, but in no event to exceed the Highest Lawful Rate.

(b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.

(c) Post-Default. Notwithstanding the foregoing, if an Event of Default under
Sections 10.01(a) or (b) has occurred and is continuing, then all Loans
outstanding shall bear interest, after as well as before judgment, at a rate per
annum equal to two percent (2%) plus the then applicable rate of interest
accruing on the Loans as provided in Sections 3.02(a) and (b), but in no event
to exceed the Highest Lawful Rate.

(d) Interest Payment Dates. Accrued interest on each Loan (other than Swing Line
Loans) shall be payable in arrears on each Interest Payment Date for such Loan
and on the Maturity Date; provided that (i) interest accrued pursuant to
Section 3.02(c) shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than an optional prepayment of an ABR Loan
prior to the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment, and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

(e) Interest Rate Computations. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.

Section 3.03 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or

 

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(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

Section 3.04 Prepayments.

(a) Optional Prepayments. The Borrowers shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b).

(b) Notice and Terms of Optional Prepayment. The Borrowers shall notify the
Administrative Agent by telephone (confirmed by delivery of a notice of
prepayment in the form of Exhibit B-3 hereto (“Notice of Prepayment”) executed
by a Responsible Officer) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 12:00 noon, Houston, Texas
time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 12:00 noon, Houston, Texas time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and whether the prepayment is to be
applied to Swing Line Loans or the other Loans; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.06(b), then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.06(b), but the Borrowers shall be responsible for any break
funding payments pursuant to Section 5.02. Promptly following receipt of any
such notice relating to a Borrowing, the Administrative Agent shall advise the
applicable Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of a
Borrowing of the same Type as provided in Section 2.03. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 3.02.

(c) Mandatory Prepayments.

(i) After giving effect to any termination or reduction of the Commitments
pursuant to Section 2.06(b) or 2.06(c), the Borrowers shall (A) prepay the
Borrowings on the date of such termination or reduction in an aggregate
principal amount equal to the difference between the new Commitments and the
total Credit Exposure, and (B) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(j).

(ii) In connection with a Casualty Event, if after such Casualty Event (x) the
fair market value of the Vessel Collateral is less than two hundred percent
(200%) of the outstanding Credit Exposures of all Lenders and (y) the Borrowers
shall not substitute any Vessel Collateral involved in any Casualty Event with
one or more Vessels of equivalent or greater comparable value so that the value
of the Vessel Collateral is equal to or greater than two hundred percent

 

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(200%) of the outstanding Credit Exposures of all Lenders within sixty (60) days
of such Casualty Event, or if prior to the beginning of, or prior to the
expiration of, such 60-day period an Event of Default has occurred and is
continuing, then the Borrowers shall prepay the Loans with the insurance
proceeds from such Casualty Event or in the alternative, the Administrative
Agent will apply such insurance proceeds as a mandatory prepayment.

(iii) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied, first, ratably to any ABR Borrowings then outstanding, and, second, to
any Eurodollar Borrowings then outstanding, and if more than one Eurodollar
Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
priority beginning with the Eurodollar Borrowing with the least number of days
remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.

(iv) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied ratably to the Loans included in the prepaid Borrowings. Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the
extent required by Section 3.02.

(v) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
accompanied by a Notice of Prepayment executed by a Responsible Officer of the
Borrowers detailing the reason for such prepayment as reasonably requested by
the Administrative Agent.

(d) No Premium or Penalty. Prepayments permitted or required under this
Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.

Section 3.05 Fees.

(a) Commitment Fees. The Borrowers agree to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the average daily amount of the unused amount
of the Commitment of such Lender (after deducting all outstanding Loans and LC
Exposure, but excluding Swing Line Loans) during the period from and including
the Effective Date to but excluding the Maturity Date. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the Maturity Date, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

(b) Letter of Credit Fees. The Borrowers agree to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, (ii) to the Issuing Lender a fronting fee, which shall
equal 0.125% per annum on the face amount of each Letter of Credit, payable in
advance at the time of issuance, provided that in no event shall such fee be
less than $750, and (iii) to the Issuing Lender, for its own account, its
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
accrued through and including the last day of March, June, September and
December of each year shall be

 

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payable on such last day, commencing on the first such date to occur after the
date of this Agreement; provided that all such fees shall be payable on the
Maturity Date and any such fees accruing after the Maturity Date shall be
payable on demand. Any other fees payable to the Issuing Lender pursuant to this
Section 3.05(b) shall be payable within ten (10) days after demand. All
participation fees shall be computed on the basis of a year of 360 days, unless
such computation would exceed the Highest Lawful Rate, in which case interest
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).

(c) Administrative Agent Fees. The Borrowers agree to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrowers and the Administrative Agent.

(d) Defaulting Lender Fees. The Borrowers shall not be obligated to pay the
Administrative Agent and the Administrative Agent shall not be required to pay
any Defaulting Lender’s ratable share of the fees described in Section 3.05(a)
and (b) for the period commencing on the day such Defaulting Lender becomes a
Defaulting Lender and continuing for so long as such Lender continues to be a
Defaulting Lender.

ARTICLE IV

Payments; Pro Rata Treatment; Sharing of Set-offs

Section 4.01 Payments; Pro Rata Treatment; Sharing of Set-offs.

(a) Payments by the Borrowers. The Borrowers shall make each payment required to
be made by them hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Section 5.01, Section 5.02,
Section 5.03 or otherwise) prior to 11:00 a.m., Houston, Texas time, on the date
when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim. Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances. Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices specified in Section 12.01, except payments
to be made directly to the Issuing Lender or the Swing Line Lender as expressly
provided herein and except that payments pursuant to Section 5.01, Section 5.02,
Section 5.03 and Section 12.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate Recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

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(c) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements and participation in Swing Line Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements or participation in Swing Line Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements and
participation in Swing Line Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements and participation
in Swing Line Loans; provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this
Section 4.01(c) shall not be construed to apply to any payment made by the
Borrowers pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in LC
Disbursements or participation in Swing Line Loans to any assignee or
participant, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this Section 4.01(c) shall apply). The Borrowers
consent to the foregoing and agree, to the extent they may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrowers rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrowers in the amount of such participation.

Section 4.02 Presumption of Payment by the Borrowers. Unless the Administrative
Agent shall have received notice from the Borrowers prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders or
the Issuing Lender or the Swing Line Lender that the Borrowers will not make
such payment, the Administrative Agent may assume that the Borrowers have made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Lender or the Swing Line
Lender, as the case may be, the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders or the Issuing Lender or
the Swing Line Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Lender or the Swing Line Lender with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.

Section 4.03 Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.05(a),
Section 2.08(d), Section 2.08(e), Section 2.09(c) or Section 4.02 then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid. If at any
time prior to the acceleration or maturity of the Loans, the Administrative
Agent shall receive any payment in respect of principal of a Loan or a
reimbursement of an LC Disbursement while one or more Defaulting Lenders shall
be party to this Agreement, the Administrative Agent shall apply such payment
first to the Borrowing(s) for which such Defaulting Lender(s) shall have failed
to fund its pro rata share until such time as such Borrowing(s) are paid in full
or each Lender (including each Defaulting Lender) is owed its Applicable
Percentage of all Loans then outstanding. After acceleration or maturity of the
Loans, all principal will be paid ratably as provided in Section 10.02(c).

 

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ARTICLE V

Increased Costs; Break Funding Payments; Taxes; Illegality

Section 5.01 Increased Costs.

(a) Eurodollar Changes in Law. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrowers will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender, the Swing Line Lender or the Issuing
Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s, Swing
Line Lender’s or the Issuing Lender’s capital or on the capital of such
Lender’s, the Swing Line Lender’s or the Issuing Lender’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations
in Letters of Credit and Swing Line Loans held by, such Lender, or the Letters
of Credit issued by the Issuing Lender, to a level below that which such Lender,
the Swing Line Lender or the Issuing Lender or such Lender’s, the Swing Line
Lender’s or the Issuing Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s, the Swing Line
Lender’s or the Issuing Lender’s policies and the policies of such Lender’s, the
Swing Line Lender’s or the Issuing Lender’s holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender,
the Swing Line Lender or the Issuing Lender, as the case may be, such additional
amount or amounts as will compensate such Lender, the Swing Line Lender or the
Issuing Lender or such Lender’s, the Swing Line Lender’s or the Issuing Lender’s
holding company for any such reduction suffered.

(c) Certificates. A certificate of a Lender, the Swing Line Lender or the
Issuing Lender setting forth the amount or amounts necessary to compensate such
Lender, the Swing Line Lender or the Issuing Lender or its holding company, as
the case may be, as specified in Section 5.01(a) or (b) shall be delivered to
the Borrowers and shall be conclusive absent manifest error. The Borrowers shall
pay such Lender, the Swing Line Lender or the Issuing Lender, as the case may
be, the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

(d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on
the part of any Lenders, the Swing Line Lender or the Issuing Lender to demand
compensation pursuant to this Section 5.01 shall not constitute a waiver of such
Lender’s, the Swing Line Lender’s or the Issuing Lender’s right to demand such
compensation; provided that the Borrowers shall not be

 

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required to compensate a Lender, the Swing Line Lender or the Issuing Lender
pursuant to this Section 5.01 for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender, the Swing Line Lender or
the Issuing Lender, as the case may be, notifies the Borrowers of the Change in
Law giving rise to such increased costs or reductions and of such Lender’s, the
Swing Line Lender’s or the Issuing Lender’s intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.

Section 5.02 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan into an ABR Loan other than on the
last day of the Interest Period applicable thereto, or (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto, then, in any such event, the Borrowers
shall compensate each Lender requesting a reimbursement for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market.

A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

Section 5.03 Taxes.

(a) Issuing Lender. For the purposes of this Section 5.03, the term “Lender”
includes any Issuing Lender.

(b) Payments Free of Taxes. Any and all payments by or on account of any
obligation of a Borrower under any Loan Document shall be made without deduction
or withholding for any Taxes, except as required by applicable law. If any
applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by such Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section) the applicable Recipient receives
an amount equal to the sum it would have received had no such deduction or
withholding been made.

(c) Payment of Other Taxes by the Borrowers. The Borrowers shall pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of the Administrative Agent timely reimburse it for the payment of any
Other Taxes.

 

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(d) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent, each Lender, the Swing Line Lender and the Issuing Lender,
within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender,
the Swing Line Lender or the Issuing Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrowers
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate of the
Administrative Agent, a Lender, the Swing Line Lender or the Issuing Lender as
to the amount of such payment or liability under this Section 5.03 shall be
delivered to the Borrowers and shall be conclusive absent manifest error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrowers have not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrowers to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.04(f) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) Evidence of Payments. Upon request by the Administrative Agent, the
Borrowers shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing any payment
of Indemnified Taxes by the Borrowers or the Parent Guarantor to a Governmental
Authority, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

(g) Foreign Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrowers and the Administrative Agent, at the time or times reasonably
requested by the Borrowers or the Administrative Agent, such properly completed
and executed documentation reasonably requested by the Borrowers or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrowers or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.03(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

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(ii) Without limiting the generality of the foregoing:

(A) any Lender that is a U.S. Person shall deliver to the Borrowers and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrowers or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit I-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of
the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or
Exhibit I-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on
behalf of each such direct and indirect partner.

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrowers or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

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(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrowers and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the
Borrowers or the Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrowers or the
Administrative Agent as may be necessary for the Borrowers and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrowers and the Administrative
Agent in writing of its legal inability to do so

(h) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.03 (including by
the payment of additional amounts pursuant to this Section 5.03), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

(i) Survival. Each party’s obligations under this Section 5.03 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document

Section 5.04 Mitigation Obligations. If any Lender requests compensation under
Section 5.01, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 5.03, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 5.01 or
Section 5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

Section 5.05 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its applicable lending
office to honor its obligation to make or

 

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maintain Eurodollar Loans either generally or having a particular Interest
Period hereunder, then (a) such Lender shall promptly notify the Borrowers and
the Administrative Agent thereof and such Lender’s obligation to make such
Eurodollar Loans shall be suspended (the “Affected Loans”) until such time as
such Lender may again make and maintain such Eurodollar Loans and (b) all
Affected Loans which would otherwise be made by such Lender shall be made
instead as ABR Loans (and, if such Lender so requests by notice to the Borrowers
and the Administrative Agent, all Affected Loans of such Lender then outstanding
shall be automatically converted into ABR Loans on the date specified by such
Lender in such notice) and, to the extent that Affected Loans are so made as (or
converted into) ABR Loans, all payments of principal which would otherwise be
applied to such Lender’s Affected Loans shall be applied instead to its ABR
Loans.

ARTICLE VI

Conditions Precedent

Section 6.01 Effective Date. The obligations of the Lenders to make Loans, the
Swing Line Lender to make Swing Line Loans and of the Issuing Lender to issue
Letters of Credit hereunder and the termination of the Existing Credit Agreement
and the reallocation of Commitments referred to in Section 2.01 shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 12.02 or the last paragraph of this
Section 6.01):

(a) The Administrative Agent, the Arranger and the Lenders shall have received
all commitment, facility and agency fees and all other fees and amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrowers hereunder.

(b) The Administrative Agent shall have received a certificate of the secretary
or an assistant secretary of each Borrower and each Guarantor setting forth
(i) resolutions of its board of directors, members or partners with respect to
the authorization of each Borrower or such Guarantor to execute and deliver the
Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of each Borrower or such
Guarantor (y) who are authorized to sign the Loan Documents to which such
Borrower or such Guarantor is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and
(iv) the Organizational Documents of the Borrowers and such Guarantor, certified
as being true and complete. The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from each Borrower to the contrary.

(c) The Administrative Agent shall have received certificates of the appropriate
state agencies with respect to the existence, qualification and good standing of
each Borrower and each Guarantor.

(d) The Administrative Agent shall have received a closing certificate which
shall be substantially in the form of Exhibit D, duly and properly executed by a
Responsible Officer and dated as of the Effective Date.

(e) The Administrative Agent shall have received from each party hereto
counterparts (in such number as may be requested by the Administrative Agent) of
this Agreement signed on behalf of such party.

 

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(f) The Administrative Agent shall have received duly executed Notes payable to
each Lender that has requested a Note in a principal amount equal to its
respective Commitment dated as of the date hereof.

(g) The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of the Security Instruments and amendments to the Fleet Mortgage. In
connection with the execution and delivery of the Security Instruments, the
Administrative Agent shall be satisfied that the Security Instruments create
first priority, perfected Liens (A) subject only to Excepted Liens identified in
clauses (a) to (c) of Section 9.03 on the Vessel Collateral and (B) subject only
to Excepted Liens identified in clauses (a) and (b) of Section 9.03 on the
Deposit Accounts.

(h) The Administrative Agent shall have received an opinion of Winstead PC,
special counsel to the Parent Guarantor, the Borrowers and the Guarantors,
substantially in the form of Exhibit E hereto.

(i) The Administrative Agent shall have received a certificate of insurance
coverage of the Borrowers evidencing that the Borrowers and the Subsidiaries are
carrying insurance in accordance with Section 7.13.

(j) The Administrative Agent shall have received appropriate UCC or other
relevant search certificates reflecting no prior Liens encumbering the Vessel
Collateral for each of the following jurisdictions: Delaware, Louisiana and any
other jurisdiction requested by the Administrative Agent; other than those being
released prior to the Effective Date or Liens permitted by Section 9.03.

(k) The Administrative Agent shall have received a certificate of a Responsible
Officer of the Borrowers certifying that the Borrowers have received all
consents and approvals required by Section 7.03.

(l) The Administrative Agent shall have received a solvency certificate from a
Responsible Officer of the Borrowers, in form and substance reasonably
satisfactory to the Administrative Agent, confirming the solvency of the
Borrowers and the Guarantors, taken as a whole, after giving effect to those
aspects of the Transactions applicable at the Effective Date.

(m) The Administrative Agent shall have received, reviewed and been satisfied
with, the title information as the Administrative Agent may reasonably require
satisfactory to the Administrative Agent setting forth the status of title to
the Vessel Collateral.

(n) The Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Lender to issue Letters of Credit hereunder shall not become effective unless
all of the foregoing conditions are satisfied (or waived pursuant to
Section 12.02 or deemed waived and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time); provided
that upon the funding of the initial Loans hereunder, the foregoing conditions
in this Section 6.01 shall be deemed satisfied unless otherwise specified in
writing by the Administrative Agent.

 

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Section 6.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (including the initial funding), the Swing Line
Lender to make a Swing Line Loan and of the Issuing Lender to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

(a) At the time of and immediately after giving effect to such Borrowing, Swing
Line Loan or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing and the
fair market value of the Vessel Collateral is equal to or in excess of two
hundred percent (200%) of the outstanding Credit Exposures of all Lenders taking
into account the increase of Credit Exposures requested based on the most recent
Appraisal.

(b) At the time of and immediately after giving effect to such Borrowing, Swing
Line Loan or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no event, development or circumstance has occurred or
shall then exist that has resulted in, or could reasonably be expected to have,
a Material Adverse Effect.

(c) The representations and warranties of the Borrowers and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct on and as of the date of such Borrowing, Swing Line Loan or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent any such representations and warranties are
expressly limited to an earlier date.

(d) The making of such Loan or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, would not cause any Lender or the Issuing
Lender to violate or exceed any applicable Governmental Requirement, and no
Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the Transactions as contemplated
by this Agreement or any other Loan Document.

(e) The receipt by the Administrative Agent of a Borrowing Request in accordance
with Section 2.03, a Swing Line Loan Notice in accordance with Section 2.09(b),
or a request for a Letter of Credit in accordance with Section 2.08(b), as
applicable.

(f) In the event that the Equity Interests of the Foreign Subsidiaries of the
Parent Guarantor that would otherwise be Guarantors pursuant to Section 8.15(c)
become included in the Security Instruments, the Administrative Agent shall have
received certificates, if any, together with undated, blank stock or membership
interest powers for each such certificate, representing 65% of such issued and
outstanding Equity Interests.

Each request for a Borrowing or a Swing Line Loan and each request for the
issuance, amendment, renewal or extension of any Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrowers on the date
thereof as to the matters specified in Section 6.02(a) through (f).

ARTICLE VII

Representations and Warranties

The Parent Guarantor and the Borrowers jointly and severally represent and
warrant to the Administrative Agent and each Lender that:

 

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Section 7.01 Organization; Powers. Each of the Parent Guarantor, the Borrowers
and each Subsidiary is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite
corporate or limited liability company power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its Property and to carry on its business as now conducted, and is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.

Section 7.02 Authority; Enforceability. The Transactions are within the
Borrowers’ and each Guarantor’s limited liability company, corporate or
partnership powers and have been duly authorized by all necessary limited
liability company or corporate and, if required, member, or shareholder action.
Each Loan Document to which a Borrower or a Guarantor is a party has been duly
executed and delivered by such Borrower or such Guarantor and constitutes a
legal, valid and binding obligation of such Borrower and such Guarantor, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

Section 7.03 Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other third Person (including members, partners or
shareholders of the Borrowers, the Guarantors or any other Person), nor is any
such consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or the consummation of the
transactions contemplated thereby, except such as have been obtained or made and
are in full force and effect other than the recording and filing of the Security
Instruments as required thereby or by this Agreement, (b) will not violate any
applicable law or regulation or the Organizational Documents of the Borrowers,
the Guarantors or any Subsidiary or any order of any Governmental Authority,
(c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon the Parent Guarantor, the Borrowers
or any Subsidiary or its Properties, or give rise to a right thereunder to
require any material payment to be made by the Borrowers or such Subsidiary and
(d) will not result in the creation or imposition of any Lien on any Property of
the Parent Guarantor, the Borrowers or any Subsidiary (other than the Liens
created by the Loan Documents).

Section 7.04 Financial Projections; No Material Adverse Change.

(a) The Parent Guarantor has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the fiscal year ended December 31, 2010, reported
on by Ernst & Young LLP, independent public accountants, and (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended September 30, 2011,
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Parent Guarantor and its Consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of certain footnotes in
the case of the unaudited quarterly financial statements.

(b) Since December 31, 2010 there has been no event, development or circumstance
that has had or could reasonably be expected to have a Material Adverse Effect.

(c) None of the Parent Guarantor, the Borrowers or any Subsidiary has any
material Funded Debt or any contingent liabilities, off-balance sheet
liabilities or partnerships,

 

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liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except for those arising
with respect to the Transactions, those arising under the Indentures and those
included or otherwise disclosed in the financial statements or other written
materials delivered to the Administrative Agent.

Section 7.05 Litigation.

(a) Except as set forth on Schedule 7.05, there are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Parent Guarantor and each
Borrower, threatened against or affecting the Parent Guarantor, the Borrowers or
any Subsidiary or any of their Properties (i) as to which there is a reasonable
possibility of an adverse determination that could reasonably be expected to
have a Material Adverse Effect, or (ii) that involve any Loan Document or the
Transactions.

(b) Since the date of this Agreement, there has been no change in the status of
the matters disclosed in Schedule 7.05 that has resulted in, or could reasonably
be expected to have, Material Adverse Effect.

Section 7.06 Environmental Matters. Except as could not be reasonably expected
to have a Material Adverse Effect (or with respect to (c), (d) and (e) below,
where the failure to take such actions could not be reasonably expected to have
a Material Adverse Effect):

(a) Neither any Property of the Parent Guarantor, the Borrowers or any
Subsidiary nor the operations conducted thereon violate any Environmental Laws.

(b) Neither any Property of the Parent Guarantor, the Borrowers or any
Subsidiary nor the operations conducted thereon or, to the knowledge of the
Parent Guarantor and each Borrower, by any prior owner or operator of such
Property or operation, are subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws.

(c) All notices, permits, licenses, exemptions, approvals or similar
authorizations, if any, required to be obtained or filed in connection with the
operation or use of any and all Property of the Parent Guarantor, the Borrowers
and each Subsidiary, including, without limitation, past or present treatment,
storage, disposal or release of a Hazardous Material into the environment, have
been duly obtained or filed, and the Parent Guarantor, the Borrowers and each
Subsidiary are in compliance with the terms and conditions of all such notices,
permits, licenses and similar authorizations.

(d) All Hazardous Material, if any, generated at any and all Property of the
Parent Guarantor and each Borrower or any Subsidiary by any such Person, and to
the knowledge of the Parent Guarantor and the Borrowers, by any other Person,
has in the past been transported, treated and disposed of in accordance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and, to the
knowledge of the Parent Guarantor and each Borrower, all such transport carriers
and treatment and disposal facilities have been and are operating in compliance
with Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action, investigation or inquiry
by any Governmental Authority pursuant to any Environmental Laws.

(e) Neither the Borrowers nor the Parent Guarantor has any knowledge that any
Hazardous Materials are now located on or in the Vessels, or that any other
Person has ever caused or permitted any Hazardous Materials to be placed, held,
located or disposed of on, the Vessels or any part thereof, except for such
Hazardous Materials that may have been placed, held, or located on the Vessels
in accordance with and otherwise not in violation of Environmental Laws.

 

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(f) To the extent applicable under OPA, all Property of the Parent Guarantor,
the Borrowers and each Subsidiary currently satisfies all requirements imposed
by OPA and, except as set forth on Schedule 7.06(f), the Parent Guarantor and
each Borrower does not have any reason to believe that such Property, to the
extent subject to OPA, will not be able to maintain compliance with OPA
requirements during the term of this Agreement.

(g) To the knowledge of the Parent Guarantor and the Borrowers, there has been
no exposure of any Person or Property to any Hazardous Materials in connection
with any Property or operation of the Borrowers or any Subsidiary that could
reasonably be expected to form the basis of a claim for damages or compensation.

Section 7.07 Compliance with the Laws and Agreements; No Defaults.

(a) The Parent Guarantor, the Borrowers and each Subsidiary is in compliance
with all Governmental Requirements applicable to it or its Property and all
agreements and other instruments binding upon it or its Property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its business,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

(b) Neither the Parent Guarantor, the Borrowers nor any Subsidiary is in default
nor has any event or circumstance occurred which, but for the expiration of any
applicable grace period or the giving of notice, or both, would constitute a
default under, or would require the Parent Guarantor, the Borrowers or a
Subsidiary to Redeem or make any offer to Redeem under any indenture, note,
credit agreement or instrument pursuant to which any Material Indebtedness is
outstanding or by which the Parent Guarantor, the Borrowers or any Subsidiary or
any of their Properties is bound.

(c) No Default has occurred and is continuing.

Section 7.08 Investment Company Act. Neither the Parent Guarantor nor any
Subsidiary is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended.

Section 7.09 Reserved.

Section 7.10 Taxes. Each of the Parent Guarantor, the Borrowers and the
Subsidiaries has timely filed (including any available extension) or caused to
be filed all Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
the Parent Guarantor, a Borrower or such a Subsidiary, as applicable, has set
aside on its books adequate accruals in accordance with GAAP (to the extent such
accrual may be set up under GAAP) or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect. The
charges and accruals on the books of the Parent Guarantor, the Borrowers and the
Subsidiaries in respect of Taxes and other governmental charges are, in the
reasonable opinion of the Borrowers, adequate.

 

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Section 7.11 ERISA.

(a) The Parent Guarantor, the Borrowers, the Subsidiaries and each ERISA
Affiliate have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.

(b) Each Plan is, and has been, maintained in substantial compliance with ERISA
and, where applicable, the Code.

(c) No act, omission or transaction has occurred which could result in
imposition on the Parent Guarantor, the Borrowers, any Subsidiary or any ERISA
Affiliate (whether directly or indirectly) of (i) either a material civil
penalty assessed pursuant to subsections (c), (i), (l) or (m) of section 502 of
ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or
(ii) material breach of fiduciary duty liability damages under section 409 of
ERISA.

(d) No Plan (other than a defined contribution plan) or any trust created under
any such Plan has been terminated since September 2, 1974. No liability to the
PBGC (other than for the payment of current premiums which are not past due) by
the Parent Guarantor, the Borrowers, any Subsidiary or any ERISA Affiliate has
been or is expected by the Parent Guarantor, the Borrowers, any Subsidiary or
any ERISA Affiliate to be incurred with respect to any Plan. No ERISA Event has
occurred or is reasonably expected to occur.

(e) Full payment when due has been made of all material amounts which the Parent
Guarantor, the Borrowers, the Subsidiaries or any ERISA Affiliate is required
under the terms of each Plan or applicable law to have been paid as
contributions to such Plan, and no waived funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), which could reasonably be
expected to have a Material Adverse Effect, exists with respect to any Plan. The
actuarial present value of the benefit liabilities under each Plan which is
subject to Title IV of ERISA does not, as of the end of the Parent Guarantor’s
most recently ended fiscal year, exceed the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities by a material amount, and the
sum of such excesses for all such Plans is not material. The term “actuarial
present value of the benefit liabilities” shall have the meaning specified in
section 4041 of ERISA.

(f) None of the Parent Guarantor, the Borrowers, the Subsidiaries or any ERISA
Affiliate sponsors, maintains, or contributes to an employee welfare benefit
plan, as defined in section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such entities,
that may not be terminated by the Parent Guarantor, the Borrowers, any
Subsidiary or any ERISA Affiliate in its sole discretion at any time without any
material liability.

(g) None of the Parent Guarantor, the Borrowers, the Subsidiaries or any ERISA
Affiliate is required to contribute to, or has any other absolute or contingent
liability in respect of, any Multiemployer Plan that, when taken together with
all other such contribution obligations and liabilities, has resulted in, or
could reasonably be expected to have, a Material Adverse Effect.

Section 7.12 Disclosure; No Material Misstatements. The Parent Guarantor and the
Borrowers have disclosed to the Administrative Agents all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to them, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the reports, financial statements, certificates or other
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Parent Guarantor, the Borrowers or any Subsidiary to the Administrative Agent or
any of its Affiliates in connection with the negotiation of this Agreement or
any other Loan Document or delivered hereunder or under any other Loan Document
(as modified or supplemented by other information so furnished) when considered
as a whole contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

Section 7.13 Insurance. The Parent Guarantor has, and has caused the Borrowers
and all of its Subsidiaries to have, (a) all insurance policies sufficient for
the compliance by each of them with all material Governmental Requirements, all
material agreements and all other Loan Documents and (b) insurance coverage in
at least amounts and against such risk (including, without limitation, public
liability) that are reasonably consistent with other companies in the industry
performing the same or a similar business for the assets and operations of the
Borrowers and its Subsidiaries but at minimum as required by the Loan Documents.
The Administrative Agent and the Lenders have been named in a manner such that
they are afforded the stature of additional insureds in respect of such
liability insurance policies and the Administrative Agent has been named as loss
payee with respect to Vessel Collateral loss insurance.

Section 7.14 Restriction on Liens. Except as permitted by Section 9.16, neither
the Parent Guarantor nor any of the Subsidiaries is a party to any material
agreement or arrangement, or subject to any order, judgment, writ or decree,
which either restricts or purports to restrict its ability to grant Liens to the
Administrative Agent for the benefit of the Lenders on or in respect of the
Vessel Collateral or their other vessels to secure the Indebtedness and the Loan
Documents.

Section 7.15 Subsidiaries. Except as set forth on Schedule 7.15 or as disclosed
in writing to the Administrative Agent (which shall promptly furnish a copy to
the Lenders), which shall be a supplement to Schedule 7.15, the Parent Guarantor
has no Subsidiaries. The owner and percentage of ownership of each Subsidiary is
set forth on such schedule.

Section 7.16 Location of Business and Offices. The Parent Guarantor’s, the
Borrowers’ and each Subsidiary’s jurisdiction of organization, name as listed in
the public records of its jurisdiction of organization, organizational
identification number in its jurisdiction of organization, and the location of
its principal place of business and chief executive office is stated on Schedule
7.15 (or as set forth in a notice delivered pursuant to Section 8.12(b)).

Section 7.17 Properties; Titles, Etc.

(a) Each of the Borrowers has good title to all of the Vessel Collateral, free
and clear of all Liens except Liens permitted by clauses (a) through (c) of
Section 9.03.

(b) Except as set forth in Schedule 7.17, all of the material Properties of the
Parent Guarantor, the Borrowers and the Subsidiaries which are reasonably
necessary for the operation of their businesses are in good working condition,
ordinary wear and tear excepted, and are maintained in accordance with
reasonable commercial business standards, except where such condition or
maintenance could not reasonably be expected to have a Material Adverse Effect.

(c) The Parent Guarantor, the Borrowers and each Subsidiary owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
Property material to its business, and the use thereof by the Parent Guarantor,
the Borrowers and such Subsidiary does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. The Parent Guarantor,

 

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the Borrowers and the Subsidiaries either own or have valid licenses or other
rights to use all databases, and other technical information used in their
businesses as presently conducted, subject to the limitations contained in the
agreements governing the use of the same, which limitations are customary for
companies engaged in its line of business, with such exceptions as could not
reasonably be expected to have a Material Adverse Effect.

Section 7.18 Reserved.

Section 7.19 Swap Agreements. As of the Effective Date, Schedule 7.19 sets forth
a true and complete list of all Swap Agreements of the Borrowers and each
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark to market
value thereof, all credit support agreements relating thereto (including any
margin required or supplied) and the counterparty to each such agreement.

Section 7.20 Use of Proceeds. The proceeds of the Loans and the Letters of
Credit shall be used for working capital and general corporate purposes of the
Parent Guarantor, the Borrowers, and each Subsidiary, including the refinancing
of the Existing Credit Agreement, capital expenditures (including vessel
construction or conversions and acquisitions). The Parent Guarantor, the
Borrowers and each Subsidiary are not engaged principally, or as one of its or
their important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock
(within the meaning of Regulation T, U or X of the Board). No part of the
proceeds of the Loans will be used for any purpose which violates the provisions
of Regulations T, U or X of the Board.

Section 7.21 Solvency. After giving effect to the Transactions contemplated
hereby that had been effected through the date of determination, (a) the
aggregate assets (after giving effect to amounts that could reasonably be
received by reason of indemnity, offset, insurance or any similar arrangement),
at a fair valuation, of the Borrowers and the Guarantors, taken as a whole, will
exceed the aggregate Debt of the Borrowers and the Guarantors on a consolidated
basis, as the Debt becomes absolute and matures, (b) each of the Borrowers and
the Guarantors will not have incurred or intended to incur, and will not believe
that it will incur, Debt beyond its ability to pay such Debt (after taking into
account the timing and amounts of cash to be received by each of the Borrowers
and the Guarantors and the amounts to be payable on or in respect of its
liabilities, and giving effect to amounts that could reasonably be received by
reason of indemnity, offset, insurance or any similar arrangement) as such Debt
becomes absolute and matures and (c) each of the Borrowers and the Guarantors
will not have (and will have no reason to believe that it will have thereafter)
unreasonably small capital for the conduct of its business.

ARTICLE VIII

Affirmative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit have expired, terminated or been cash collateralized to the reasonable
satisfaction of the Issuing Lender and all LC Disbursements shall have been
reimbursed, the Parent Guarantor and the Borrowers covenant and agree with the
Administrative Agent and the Lenders on behalf of the Loan Parties that:

Section 8.01 Financial Statements and Reports. The Parent Guarantor and the
Borrowers will promptly furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders such information regarding the business and
affairs and financial condition of the Borrowers and the Parent Guarantor and
the Subsidiaries as the Administrative Agent or the Required Lenders may
reasonably request. Without limiting the generality of the foregoing, the Parent
Guarantor and the Borrowers will furnish or cause to be furnished to the
Administrative Agent and each of the Lenders, each of the following:

 

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(a) The Parent Guarantor Annual Reports—as soon as available and in any event
within seven (7) Business Days following the required SEC filing date for the
Form 10-K, the annual report on Form 10-K containing the audited consolidated
balance sheet of the Parent Guarantor as of the end of such year, the audited
consolidated statement of income of the Parent Guarantor for such year, the
audited consolidated statement of stockholders’ equity of the Parent Guarantor
for such year, and the audited consolidated statement of cash flows of the
Parent Guarantor for such year (along with data for each business segment for
such periods), setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, accompanied by the unqualified audit
opinions of Ernst & Young LLP or another independent certified public accountant
acceptable to the Required Lenders;

(b) Subsidiaries Annual Reports—promptly upon the request of the Administrative
Agent or the Required Lenders after April 30 in any year, the balance sheet of
any Subsidiary (that is not a Borrower or a Guarantor Subsidiary) as of the end
of the most recently completed fiscal year, the statement of income of such
Subsidiary for such year, the statement of owner’s equity of such Subsidiary for
such year, and the statement of cash flows of such Subsidiary for such year,
setting forth in each case in comparative form the corresponding figures for the
preceding fiscal year, certified as being true, correct and complete in all
material respects by the chief financial officer of the Parent Guarantor;

(c) The Parent Guarantor Quarterly Reports—as soon as available and in any event
within seven (7) Business Days of the required SEC filing date for the
Form 10-Q, the quarterly report on Form 10-Q containing the consolidated balance
sheet of the Parent Guarantor as of the end of such quarter, the consolidated
statements of income of the Parent Guarantor for such quarter and for the period
from the beginning of the fiscal year through such quarter, and the consolidated
statements of cash flows of the Parent Guarantor for the period from the
beginning of the fiscal year through such quarter (along with data for each
business segment for such periods), setting forth in each case in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal year, certified as being true, correct and complete in all material
respects by the chief financial officer of the Parent Guarantor;

(d) Audit Reports—promptly upon receipt thereof, copies of each other audit
report submitted to either Borrower or the Parent Guarantor by independent
accountants in connection with any annual, interim or special audit made by them
of the books of either Borrower or the Parent Guarantor; and

(e) Budget—as soon as available and with the delivery of the annual report on
Form 10-K required by Section 8.01(a), the Parent Guarantor’s consolidated
annual budget (including income statement, and capital expenditure budget) for
such calendar year.

All such balance sheets and other reports referred to above shall be in such
detail as the Administrative Agent or the Required Lenders may reasonably
request and shall conform to GAAP applied on a consistent basis, except only for
such changes in accounting principles or practice with which the independent
certified public accountants concur.

Section 8.02 Certificates of Compliance. (a) Concurrently with the furnishing of
the annual financial statements pursuant to Section 8.01(a) hereof, the Parent
Guarantor will furnish or cause to be furnished to the Administrative Agent, for
distribution to the Lenders, certificates from the independent

 

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certified public accountants for the Parent Guarantor stating that in the
ordinary course of their audit of the Parent Guarantor insofar as it relates to
accounting matters, their audit has not disclosed the existence of any condition
which constitutes a Default, or if their audit has disclosed the existence of
any such condition, specifying the nature, period of existence and status
thereof; provided, that the independent certified public accountants shall not
be liable to the Administrative Agent or the Lenders for their failure to
discover a Default.

(b) Concurrently with the furnishing of the financial statements pursuant to
Sections 8.01(a) and (c) hereof, the Parent Guarantor will furnish to
Administrative Agent a certificate that there is no Default or Event of Default
at such time and a certificate in form and substance satisfactory to the
Administrative Agent containing all information and calculations necessary for
determining compliance with Sections 9.01(a), (b) and (c) or (d), as applicable,
and for determining the Applicable Margin, and the Parent Guarantor will deliver
a certificate to Administrative Agent certifying that no Change in Control has
occurred.

Section 8.03 Taxes and Other Liens. The Borrowers and the Guarantors will pay
and discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon the Borrowers or any Guarantor or upon its income or upon
any of its Property as well as all claims of any kind (including claims for
labor, materials, supplies and rent) which, if unpaid, might become a Lien upon
any or all of its Property; provided, that the Borrowers and the Guarantors
shall not be required to pay any such tax, assessment, charge, levy or claim if
the amount, applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings diligently conducted and if the contesting
party shall have set up accruals therefor adequate under GAAP (provided that
such accruals may be set up under GAAP).

Section 8.04 Existence; Compliance. Except as permitted by Section 9.06, each
Borrower and each Guarantor will maintain its limited liability company or
corporate existence and rights. The Borrowers and the Guarantors will observe
and comply with all valid laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, certificates, franchises,
permits, licenses, authorizations, directions and requirements of any
Governmental Authority including Governmental Requirements and Environmental
Laws, unless any such failure to observe and comply would not reasonably be
expected to have a Material Adverse Effect.

Section 8.05 Further Assurances. The Borrowers and the Guarantors will promptly
(and in no event later than thirty (30) days after written notice from the
Administrative Agent is received) cure or cause to be cured any defects in the
creation, execution and delivery of any of the Loan Documents. The Borrowers and
the Guarantors will, at their expense, promptly (and in no event later than
thirty (30) days after written notice from the Administrative Agent is received)
execute and deliver, or cause to be executed and delivered, to the
Administrative Agent and the Lenders upon request all such other and further
documents, agreements and instruments (including without limitation further
security agreements, financing statements, continuation statements, and
assignments of accounts and contract rights, except for Excluded Contracts (as
defined in the Guaranty and Collateral Agreement)) in compliance with or
accomplishment of the covenants and agreements of each Borrower and the
Guarantors in the Loan Documents or to further evidence and more fully describe
the Vessel Collateral, including any renewals, additions, substitutions,
replacements or accessions to the Vessel Collateral, or to correct any omissions
in the Security Instruments, or more fully state the security obligations set
out herein or in any of the Security Instruments, or to perfect, protect or
preserve any Liens created pursuant to any of the Security Instruments, or to
make any recordings, to file any notices, or obtain any consents as may be
necessary or appropriate in connection with the transactions contemplated by
this Agreement.

 

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Section 8.06 Performance of Obligations. The Borrowers will repay the Loans in
accordance with the Notes and this Agreement. The Borrowers and the Guarantors
will do and perform every act required of the Borrowers and the Guarantors, by
the Loan Documents at the time or times and in the manner specified.

Section 8.07 Reserved.

Section 8.08 Insurance. (a) The Borrowers and the Guarantors shall cause the
Administrative Agent to be named as loss payee, for the ratable benefit of the
Lenders, as to the Vessel Collateral and as mortgagee and the Administrative
Agent, as agent for the Lenders, to be named as an additional insured, with a
waiver of rights of subrogation, under a marine and war-risk insurance policy,
and the Administrative Agent, as agent for the Lenders, to be named as an
additional insured, with a waiver of rights of subrogation, under the
comprehensive general liability insurance, statutory workers’ compensation
insurance and longshoreman and harbor workers’ act coverage policies.

(b) The Borrowers and the Guarantors may purchase such insurance from any
insurance company or broker that is acceptable to the Administrative Agent,
which approval shall not be unreasonably withheld. All such insurance policies,
including renewals and replacements, must also be in form and substance
acceptable to the Administrative Agent, which approval shall not be unreasonably
withheld and must additionally contain a non-contributory loss payable
endorsement in favor of the Administrative Agent, for the ratable benefit of the
Lenders, providing in part that (i) all proceeds under such policies of
insurance will, subject to the terms and conditions of subsection (f) below, be
delivered directly to the Administrative Agent (payable as hereinafter provided)
and (ii) no act or omission on the part of the Borrowers, or any of their
officers, agents, employees or representatives, nor breach of any warranty
contained in such policies, shall affect the obligations of the insurer to pay
the full amount of any loss to the Administrative Agent. Such policies of
insurance must also contain a provision prohibiting cancellation or the
alteration of such insurance without at least thirty (30) days’ prior written
notice to the Administrative Agent of such intended cancellation or alteration.
The insurance policies and insurers in effect on the Effective Date, as provided
in advance to the Administrative Agent, are acceptable to the Administrative
Agent.

(c) The Borrowers and the Guarantors agree to provide, or cause to be provided
to, the Administrative Agent with originals or certified copies of such policies
of insurance or certificates with respect thereto. The Borrowers and the
Guarantors further agree to promptly furnish the Administrative Agent with
copies of all renewal notices and, if requested by the Administrative Agent,
with copies of receipts for paid premiums. The Borrowers and the Guarantors
shall provide, or cause to be provided to, the Administrative Agent binders or
such other proof acceptable to the Administrative Agent that renewal or
replacement policies of insurance will be in effect before any such existing
policy or policies should expire.

(d) In the event the Borrowers and the Guarantors should, for any reason
whatsoever, fail to cause any insurance required hereunder or under the Security
Instruments to be maintained as herein or therein provided, or to cause such
policies to be and remain so assigned or payable as provided herein, or to cause
to be delivered to the Administrative Agent satisfactory evidence thereof, then
the Administrative Agent, if it so elects, may itself have any such insurance
effected in such amounts and in such companies as it may deem proper and may pay
the premiums therefor and the Borrowers shall reimburse the Administrative Agent
(and the Lenders, if applicable) upon demand for the amount of the premiums
paid, together with interest thereon at the Default Rate from the date such
premiums were paid by the Administrative Agent (or Lender, if applicable) until
reimbursed. The Administrative Agent and the Lenders shall not be responsible
for the solvency of any company issuing any insurance policy, whether or not
selected or approved by the Administrative Agent or the Lenders, or for the
collection of any amounts due under any such policy, and shall be responsible
and accountable only for such money as may be actually received by the
Administrative Agent or the Lenders.

 

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(e) The Borrowers and the Guarantors agree to notify the Administrative Agent in
writing within thirty (30) days of any Casualty Event involving a Vessel (or any
other vessel owned by either Borrower that could reasonably be expected to have
a Material Adverse Effect), in each case whether or not such casualty or loss is
covered by insurance. The Borrowers and the Parent Guarantor further agree to
promptly notify their insurance company and to submit an appropriate claim and
proof of claim to the insurance company in the event that a Vessel or any other
vessel owned by either Borrower, is involved in a Casualty Event. As to the
Vessel Collateral, the Administrative Agent may submit such a claim and proof of
claim to the insurance company on the owner’s behalf, should the owner fail to
do so promptly for any reason. As to the Vessel Collateral, the Borrowers and
the Guarantors hereby irrevocably appoint the Administrative Agent as its agent
and attorney-in-fact, each such agency being coupled with an interest, to make,
settle and adjust claims under such policy or policies of insurance (regardless
of whether a settlement or adjustment of a claim is an Event of Default) and to
endorse the name of the Borrowers and the Guarantors on any check or other item
of payment for the proceeds thereof; it being understood, however, that unless
one or more Defaults exist under this Agreement, the Administrative Agent will
not settle or adjust any such claim without the prior approval of the Borrowers
(which approval shall not be unreasonably withheld).

(f) The Borrowers and the Guarantors shall not declare or agree with
underwriters that a Vessel is a constructive or compromised, agreed or arranged
constructive total loss without the prior written consent of the Administrative
Agent and the Required Lenders. The proceeds of all insurance covering Vessel
Collateral shall be made payable to the owner of such Vessel and the
Administrative Agent jointly, and delivered to the Administrative Agent. The
Administrative Agent agrees to notify the applicable insurance carrier to make
the insurance payment payable to and delivered to the Borrowers in connection
with a Casualty Event if after such Casualty Event either: (i) no Event of
Default shall have occurred and be continuing; and the fair market value of the
Vessel Collateral is equal to or in excess of two hundred percent (200%) of the
outstanding Credit Exposures of all Lenders or (ii) no Event of Default shall
have occurred and be continuing; and the Borrowers have replaced the Vessel
Collateral subject to the Casualty Event with one or more vessels of equivalent
or greater comparable fair market value, acceptable to the Administrative Agent
in its sole and absolute discretion, and have provided to the Administrative
Agent a first priority, perfected Lien subject only to Excepted Liens identified
in clauses (a) to (c) of Section 9.03 on such substitute Vessel Collateral.

(g) The Administrative Agent’s receipt of such insurance proceeds and the
application of such proceeds as provided herein shall not, however, affect the
Administrative Agent’s Liens against the Vessels, for the ratable benefit of the
Lenders. Other than in circumstances where insurance proceeds relative to the
loss of or damage to a Vessel are applied to the repayment of the Indebtedness
or where the Borrowers or the Parent Guarantor have substituted one or more
Vessels of equivalent or greater fair market value as Vessel Collateral in
compliance with Section 8.16 (without taking into account the Vessels damaged),
nothing under this Section 8.08 shall be deemed to excuse the Borrowers from
their obligations to promptly repair, replace or restore any lost or damaged
Vessel, whether or not the same is covered by insurance, whether or not such
proceeds of insurance are available, and whether or not such proceeds are
sufficient in amount to complete such repair, replacement or restoration, to the
satisfaction of the Administrative Agent. Furthermore, unless otherwise
confirmed by the Administrative Agent and the Required Lenders in writing, the
application or release of any insurance proceeds by the Administrative Agent
shall not be deemed to cure or waive any Event of Default under this Agreement.

 

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(h) The Borrowers and the Guarantors, upon request of the Administrative Agent,
shall furnish, or cause to be furnished, to the Administrative Agent reports on
each existing policy of insurance showing such information as the Administrative
Agent or the Required Lenders may request, including without limitation the
following: (i) the name of the insurer; (ii) the risks insured; (iii) the amount
of the policy; (iv) the Property insured; (v) the then current value on the
basis of which insurance has been obtained and the manner of determining that
value; and (vi) the expiration date of the policy.

Section 8.09 Accounts and Records. The Borrowers and the Guarantors will keep
books of record and accounts in which true and correct entries will be made as
to all material matters of all dealings or transactions in relation to the
respective business and activities, sufficient to permit reporting in accordance
with GAAP, consistently applied.

Section 8.10 Right of Inspection. (a) The Borrowers and the Guarantors will
permit any officer, employee or agent of the Administrative Agent, any Lender,
the Surveyor, the United States Coast Guard or the American Bureau of Shipping
to visit and inspect the Vessels, and to visit and inspect the other Vessel
Collateral, and (b) the Borrowers and the Guarantors will permit any officer,
employee or agent of the Administrative Agent and (upon the occurrence and
continuance of an Event of Default) any Lender to examine the books of record
and accounts of the Borrowers and the Guarantors, take copies and extracts
therefrom, and discuss the affairs, finances and accounts of the Borrowers and
the Guarantors with their officers, accountants, counsel and auditors, all of
the foregoing at such reasonable times and on reasonable notice and without
hindrance or delay and as often as the Administrative Agent, any Lender (if
applicable), the Surveyor, the United States Coast Guard or the American Bureau
of Shipping may reasonably desire. Notwithstanding the foregoing, except
following an Event of Default that has occurred and is continuing, the
Administrative Agent, any Lender and the Surveyor shall not visit or inspect the
Vessels or other Vessel Collateral more frequently than twice a year,
individually or as a group, and then at their own expense, except that the
Borrowers will be responsible for such expense following the occurrence and
during the continuance of an Event of Default, and provided that any such visits
or inspections shall occur when the applicable Vessel is shoreside at a location
involved in the ordinary course of providing its services under its then
applicable charter or other vessel service contract.

Section 8.11 Maintenance of Properties. The Borrowers and the Guarantors shall
maintain and preserve all of their respective Properties (and any Property
leased by or consigned to any of them or held under title retention or
conditional sales contracts) that are used or useful in the conduct of their
respective business in the ordinary course in good working order and condition
at all times, ordinary wear and tear excepted, and make all repairs,
replacements, additions, betterments and improvements to their respective
Properties to the extent necessary so that any failure will not reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, the Borrowers and the Guarantors shall at all times maintain the
Vessels in compliance with the requirements of the American Bureau of Shipping
or any other classification society acceptable to the Administrative Agent, for
the highest classification for vessels of like age and type, and upon the
Administrative Agent’s request therefor, the Borrowers shall promptly provide to
the Administrative Agent copies of certificates duly issued by the American
Bureau of Shipping or other classification society acceptable to the
Administrative Agent, to the effect that the Vessels have been given the highest
classification and rating for vessels of the same respective ages and types,
free of all recommendations and notations of such classification society
affecting class.

Section 8.12 Notice of Certain Events. (a) The Parent Guarantor and the
Borrowers shall promptly notify the Administrative Agent if any one of them
learns of the occurrence of any event which constitutes a Default, together with
a detailed statement by a Responsible Officer of the Parent Guarantor as to the
nature of the Default and the steps being taken to cure the effect of such
Default.

 

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(b) The Parent Guarantor and the Borrowers shall promptly notify the
Administrative Agent of any change in organizational jurisdiction, location of
the principal place of business or the office where records concerning accounts
and contract rights are kept, or any change in the federal taxpayer
identification number or organizational identification number of the Parent
Guarantor or any Subsidiary.

(c) The Parent Guarantor and the Borrowers shall promptly provide the
Administrative Agent, upon request therefor by the Administrative Agent,
listings of the assets of the Borrowers or the Guarantors and the condition
thereof, in form and substance satisfactory to the Administrative Agent.

(d) The Parent Guarantor and the Borrowers shall promptly submit such
information in form and substance satisfactory to the Administrative Agent as
may be reasonably requested by the Administrative Agent concerning construction
of new vessels for the Borrowers or the Guarantors.

(e) The Parent Guarantor and the Borrowers shall promptly notify the
Administrative Agent of any defaults or alleged defaults of any party with
respect to any construction contract for newbuild vessels that could reasonably
be expected to have a Material Adverse Effect, and thereafter keep the
Administrative Agent advised of any significant developments in connection
therewith.

(f) The Parent Guarantor and the Borrowers shall promptly notify the
Administrative Agent of any and all Liens filed or otherwise asserted, and
attachments made, against the Vessels, together with copies of all related
instruments and any other materials that the Administrative Agent shall request.

(g) The Parent Guarantor and the Borrowers shall provide to the Administrative
Agent upon request therefor by the Administrative Agent from time to time,
evidence satisfactory to the Administrative Agent that no Change in Control has
occurred.

Section 8.13 ERISA Information and Compliance. The Parent Guarantor and the
Borrowers will furnish to the Administrative Agent (i) as soon as is
administratively practicable following a request from the Administrative Agent
copies of each annual or other report filed with the United States Secretary of
Labor or the PBGC, copies of each annual and other report with respect to any
Plan sponsored or maintained by either of the Borrowers, the Parent Guarantor,
any Subsidiary, or any ERISA Affiliate and (ii) as soon as is administratively
practicable upon becoming aware of the occurrence of any (A) ERISA Event or
(B) “prohibited transaction,” as such term is defined in Section 4975 of the
Code, in connection with any Plan sponsored or maintained by any Parent
Guarantor, either Borrower, any Subsidiary or any ERISA Affiliate that could
reasonably be expected to have a Material Adverse Effect, a written notice
signed by the president, the chief executive officer or the chief financial
officer of the Parent Guarantor specifying the nature thereof, what action the
Parent Guarantor is taking or proposes to take with respect thereto, and, when
known, any action taken by the Internal Revenue Service with respect thereto.
The Parent Guarantor and the Borrowers will comply with all of the applicable
funding and other requirements of ERISA as such requirements relate to the Plans
of the Parent Guarantor or any Subsidiary.

Section 8.14 Charters. The Borrowers and the Guarantors shall perform all of its
obligations in respect of, and observe all of the terms and provisions of, any
charter of a Vessel, and shall use their best efforts to keep all such
agreements in full force and effect for the applicable term thereof.
Notwithstanding the foregoing, no breach by the Borrowers or the Guarantors
under a charter shall be a Default or Event of Default hereunder unless the
result could reasonably be expected to have a Material Adverse Effect.

 

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Section 8.15 Security. The Indebtedness shall be secured by the following:

(a) The Vessels and related Property and rights of the Borrowers or the other
Loan Parties satisfying the requirements of Section 8.16 (“Vessel Collateral”),

(b) The Deposit Accounts, and

(c) Upon the formation or acquisition of any Subsidiary which results in Parent
Guarantor having Subsidiaries (other than Borrowers and the then existing
Guarantor Subsidiaries) with assets of $50,000,000 or more in the aggregate, or
upon any Subsidiaries (other than Borrowers and the then existing Guarantor
Subsidiaries) from time to time existing having assets of $50,000,000 or more in
the aggregate, then such Subsidiary or Subsidiaries as are satisfactory to the
Required Lenders in their sole discretion (such that the Subsidiaries, other
than the Borrowers, the then existing Guarantor Subsidiaries and such Subsidiary
or Subsidiaries as are satisfactory to the Required Lenders to guaranty the
Indebtedness, not guarantying the Indebtedness have assets of less than
$50,000,000 in the aggregate) shall guaranty the payment and performance of the
Indebtedness by executing and delivering in favor of the Administrative Agent,
for the ratable benefit of the Lenders, a guaranty agreement comparable to the
Guaranty and Collateral Agreement but in form and substance satisfactory to the
Administrative Agent and the Required Lenders. Notwithstanding the foregoing, in
the event that, but for this sentence, a Subsidiary formed under the laws of a
jurisdiction outside of the United States would be required to execute and
deliver a guaranty, then in lieu of such guaranty the Parent Guarantor or
applicable Subsidiary of Parent Guarantor that owns such foreign Subsidiary
shall promptly pledge to the Administrative Agent, for the ratable benefit of
the Lenders, on an equity class by equity class basis the lesser of (y) all of
the equity of such class in such foreign Subsidiary that it owns or
(z) sixty-five percent (65%) of the equity of such class issued and outstanding
in such foreign Subsidiary (in other words, no more than sixty-five percent
(65%) of each class of the foreign Subsidiary’s equity issued and outstanding is
to be pledged), as security for the Indebtedness (and if the pledgor is not a
Borrower, such pledgor shall guaranty the Indebtedness), all pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent. Furthermore, if a Subsidiary guarantees the Debt of
others, it shall also guaranty the Indebtedness on at least a pari passu basis
with such other guarantee.

Section 8.16 Collateral Value. The Borrowers shall cause the fair market value
of the total Vessel Collateral at all times to be greater than or equal to two
hundred percent (200%) of (a) $250,000,000 prior to the delivery of the items
set forth in subsections (i) and (ii) of the last paragraph of Section 2.01 and
(b) the Commitments from time to time in effect after such delivery (the
“Required Collateral Value”). If from time to time, in order for the Borrowers
to comply with the preceding sentence, including without limitation, when a
Vessel is subject to a Casualty Event, additional Vessels are required to be
mortgaged in favor of the Administrative Agent for the ratable benefit of the
Lenders, then (i) the Administrative Agent shall be entitled to choose in its
sole and absolute discretion which additional vessel or vessels owned (subject
to the next following sentence) by either Borrower, not otherwise subject to a
mortgage Lien securing Debt that otherwise does not violate this Agreement,
shall be so mortgaged so that the Borrowers will be in compliance with the
preceding sentence (and the parties acknowledge that the Borrowers may suggest
what additional vessel or vessels they would prefer but such suggestions
nevertheless shall not have the effect of impairing the fact that the selection
is at the Administrative Agent’s sole and absolute discretion), and (ii) the
applicable Borrower(s) owning such vessel(s) shall promptly supplement and amend
the applicable Security Instrument and this Agreement, or enter into collateral
documents, pursuant to documentation in form and substance satisfactory to the
Administrative Agent, so as to grant to the Administrative Agent, for the
ratable benefit of the Lenders,

 

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Fleet Mortgage Liens (or the foreign equivalent) thereon and first priority
security interests (or the foreign equivalent) in all related assets, and in
connection therewith the Borrowers shall provide to the Administrative Agent
evidence of insurance required under the Loan Documents and applicable
Certificates of Documentation as to the Vessel Collateral and Vessel abstracts
thereon showing the Fleet Mortgage as the only recorded Lien (other than
Excepted Liens) thereon. If the fair market value of the Vessel Collateral is
greater than the Required Collateral Value, the Borrowers shall not be entitled
to the release of any Vessel Collateral without the written consent of all
Lenders, which will not be unreasonably withheld. The Borrowers shall not
substitute vessels (and related assets) for existing Vessels that are Vessel
Collateral without the written consent of the Required Lenders, which will not
be unreasonably withheld. The Administrative Agent may, but shall not be
required to, accept vessels as Vessel Collateral that are flagged in countries
other than the U.S. The Administrative Agent and the Lender acknowledge that, on
the Effective Date and subject to receipt of the items set forth in subsections
(i) and (ii) of the last paragraph of Section 2.01, the requirements of this
Section 8.16 are met by providing a Lien on the Vessels set forth in Schedule
8.16 and related Vessel Collateral.

Section 8.17 Deposit Accounts. The Borrowers and the Parent Guarantor shall
maintain their primary domestic deposit, collection and disbursement banking
accounts with a Lender. The foregoing is not applicable to the Investment
Accounts, foreign banking accounts of the Borrowers or the Parent Guarantor or
other banking related products.

Section 8.18 Appraisal. At any time after the Effective Date (but in any event
only four (4) times after such date but prior to the Maturity Date) the Required
Lenders shall be entitled to require that the Administrative Agent obtain, or
the Administrative Agent may on its own initiative obtain, Appraisals by the
Surveyor with respect to the Vessel Collateral. The foregoing limitation shall
not apply (a) in connection with each exercise of a Commitment Increase or
(b) during the occurrence and continuance of any Default or Event of Default, in
which event the Administrative Agent or the Required Lenders shall be entitled
to additional Appraisals. The Borrowers shall be liable for all reasonable
expenses in connection with any such Appraisals. In addition to the foregoing,
the Required Lenders may from time to time in their discretion obtain further
Appraisals, at the pro-rata cost and expense of all the Lenders (computed by
reference to each Lender’s Applicable Percentage). If Dufour, Laskay & Strouse
is removed from the Administrative Agent’s list of approved surveyors and a
different surveyor (such surveyor to be on the Administrative Agent’s approved
list and selected by the Administrative Agent) appraises the Vessels at a lower
amount than previously appraised, the Borrowers may, at their own cost and
expense, have any other surveyor on the Administrative Agent’s approved list
reappraise the Vessels. The higher of the two appraisals shall be the accepted
appraisal, but only if the appraisal methodology is acceptable to the
Administrative Agent in its reasonable discretion.

Section 8.19 Liquidity. If the 2013 Convertible Senior Unsecured Notes remain
outstanding as of April 30, 2013, then commencing on such date, the Parent
Guarantor and the Borrowers shall maintain as of the end of such calendar month
and each calendar month-end thereafter, Available Liquidity of $350,000,000
until the earlier of (a) the refinancing of the 2013 Convertible Senior
Unsecured Notes to a date that is 91 or more days beyond the scheduled Maturity
Date or (b) the Redemption of the 2013 Convertible Senior Unsecured Notes.

ARTICLE IX

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit have expired, terminated or been cash collateralized to the reasonable
satisfaction of the Issuing Lender and all LC Disbursements shall have been
reimbursed, the Parent Guarantor and the Borrowers covenant and agree with the
Administrative Agent and the Lenders on behalf of the Loan Parties that:

 

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Section 9.01 Financial Covenants.

(a) Interest Coverage Ratio. The Parent Guarantor will not permit its ratio of
EBITDA (without pro forma adjustments) for the period of four fiscal quarters
then ending to interest expense (determined in accordance with GAAP except that
the non-cash original issue discount component of interest expense related to
Debt subject to APB 14 will be excluded from interest expense for purposes of
this calculation) as of the last day of any fiscal quarter to be less than
(i) 2.00 to 1.00 beginning with the fiscal quarter ending December 31, 2011
until the fiscal quarter ending September 30, 2012, (ii) 2.50 to 1.00 beginning
with the fiscal quarter ending December 31, 2012 until the fiscal quarter ending
March 31, 2013, and (iii) 3.00 to 1.00 beginning with the fiscal quarter ending
June 30, 2013 until the Maturity Date.

(b) Senior Secured Leverage Ratio. The Parent Guarantor will not, as of the last
day of any fiscal quarter commencing with the fiscal quarter ending
September 30, 2011, permit its Senior Secured Leverage Ratio to be greater than
2.00 to 1.00.

(c) Total Debt to Capitalization Ratio. The Parent Guarantor will not, as of the
last day of any fiscal quarter during the period commencing with the fiscal
quarter ending September 30, 2011 and ending with the fiscal quarter ending
September 30, 2012, permit its Total Debt to Capitalization Ratio to be greater
than 55%.

(d) Leverage Ratio. The Parent Guarantor will not, as of the last day of any
fiscal quarter commencing with the fiscal quarter ending December 31, 2012,
permit its Leverage Ratio to be greater than 4.00 to 1.00.

Section 9.02 Debt. No Loan Party will create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to any Debt not permitted by the terms of the Indentures as such
Indentures are amended or modified from time to time and comparable provisions
of any indentures that may be entered into as a restatement, renewal, refinance
or rearrangement of any of the Indentures (“Replacement Indentures”) entered
into from time to time (“Debt Covenant”) and, for purposes of the foregoing, the
provisions of the latest such Debt Covenant adopted, together with all related
definitions and giving effect, if applicable, to the termination provisions upon
the attainment of certain Debt ratings, are incorporated herein by reference,
mutatis mutandis, and shall be deemed to continue in effect for the
Administrative Agent’s, the Issuing Lender’s, the Swing Line Lender’s and the
Lenders’ benefit as in effect on the date of the last to be terminated of the
Indentures and any Replacement Indentures. The Debt issued under any Replacement
Indenture or any other indenture entered into by a Loan Party from time to time
must be payable in a single payment upon the Stated Maturity, such Stated
Maturity may not be earlier than six months after the Maturity Date, and the
covenants may not be materially more restrictive (taken as a whole) than the
covenants contained in this Agreement.

Section 9.03 Liens. No Loan Party will create, incur, assume, or permit to exist
any Lien on any of the Vessel Collateral or other Properties, except for the
following, which shall be “Excepted Liens”, provided that only the liens
referred to in clauses (a) through (c) below may apply to the Vessel Collateral:

(a) Liens in the Vessel Collateral and any other Liens in favor of the
Administrative Agent and the Lenders to secure the Indebtedness.

 

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(b) Liens for taxes, assessments, or other governmental charges not yet due or
which are being contested in good faith by appropriate action promptly initiated
and diligently conducted, if such accrual as shall be required by GAAP shall
have been made therefor.

(c) Landlords’, carriers’, warehousemen’s, mechanics’, laborers’, seamen’s,
preferred maritime and materialmen’s liens arising by law in the ordinary course
of business for sums either not yet due or being contested in good faith by
appropriate action promptly initiated and diligently conducted, if such accrual
as shall be required by GAAP shall have been made therefor.

(d) precautionary liens on Property covered by Capital Leases.

(e) Legal or equitable encumbrances deemed to exist by reason of negative pledge
covenants and other covenants or undertakings of like nature (provided, that any
such covenant or undertaking shall not apply to such Loan Party’s ability to
grant Liens in favor of the Administrative Agent and the Lenders).

(f) Liens on Property of a Loan Party that is not Vessel Collateral, which Liens
arise from a judgment or judgments against a Loan Party; provided that such
Liens shall not exceed $5,000,000 in the aggregate during the term of the Loan
and such Loan Party shall nevertheless diligently contest such judgment.

(g) Liens by shipyards on vessels under construction securing the obligation of
a Loan Party to pay for the cost of such vessel.

(h) Liens on any Property of a Person existing at the time such Person is merged
into or consolidated with any Loan Party, provided that such Liens were in
existence prior to such merger or consolidation, were not created in
contemplation of it and do not extend to any Property or asset of any Loan
Party, other than those of the Person merged into or consolidated with any Loan
Party.

(i) Liens on any Person or any Property of a Person existing at the time of
acquisition thereof by any Loan Party, provided that such Liens were in
existence prior to such acquisition, were not created in contemplation of such
acquisition and do not extend to any Property of any Loan Party, other than such
Person or such Property acquired by any Loan Party.

(j) Liens securing the performance of tenders, bids, statutory obligations,
surety, appeal, return-of-the-money or performance bonds, government contracts,
insurance obligations or other obligations of a like nature incurred in the
ordinary course of business.

(k) Liens securing any Swap Agreements.

(l) Liens existing on the Effective Date.

(m) Liens securing Debt that is non-recourse to any Loan Party.

(n) Any interest or title of a lessor under an operating lease.

(o) Liens on Property of a Loan Party or a Subsidiary thereof to secure Debt
incurred for the purpose of (i) financing all or any part of the purchase price
of such Property incurred prior to, at the time of, or within 120 days after,
completion of the acquisition of such Property or (ii) financing all or any part
of the cost of construction or conversion of any such Property, provided that

 

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the amount of any such financing shall not exceed the amount expended in the
acquisition of, or the construction or conversion of, such Property and such
Liens shall not extend to any other Property of a Loan Party or a Subsidiary
thereof (other than any associated accounts, contracts and insurance proceeds).

(p) Liens securing Debt used to refinance Debt (as permitted by the Debt
Covenant) which are secured by Liens referred to in (h), (i), (l) and (o) above
and in this subsection (p).

(q) Liens securing Debt of any Loan Party that does not exceed $50,000,000 at
any one time outstanding on Property that is not Vessel Collateral.

(r) Liens on any Property of any Loan Party that is not Vessel Collateral that
were substituted or exchanged as collateral for other Properties of any Loan
Party that are referred to in (h) and (i) above, provided that the fair market
value of the substituted or exchanged Properties substantially approximates, at
the time of the substitution or exchange, the fair market value of the other
Properties so referred to.

(s) Rights of banks to setoff deposits against Debt owed to said banks.

(t) Liens upon specific items of inventory or other goods and proceeds of any
Loan Party securing the Loan Party’s obligations in respect of bankers’
acceptances issued or created for the account of any such Person to facilitate
the purchase, shipment or storage of such inventory or other goods in the
ordinary course of business.

Notwithstanding any of the exceptions contained in this Section 9.03, the
Indentures, Replacement Indentures or any other indenture entered into by a Loan
Party may not be secured by any Liens upon any Properties of the Borrowers, the
Guarantors or any of their Subsidiaries.

Section 9.04 Restricted Payments. Neither the Parent Guarantor nor the Borrowers
shall, declare or make any Restricted Payments except:

(a) a Borrower shall be permitted to make cash dividends or distributions to the
Parent Guarantor;

(b) stock dividends (including any rights distributed pursuant to a stockholder
rights plan), stock splits and reverse stock splits with respect to the Parent
Guarantor; provided, that the Parent Guarantor shall promptly notify the
Administrative Agent of any such permitted dividends, splits or reverse splits;

(c) the Parent Guarantor shall be permitted to issue shares of its Equity
Interests or purchase its Equity Interests for purposes of contributing such
shares or selling such shares to an employee stock ownership plan sponsored by
Parent Guarantor; provided, that the aggregate of such Restricted Payments
during the term of the Agreement shall not exceed $25,000,000;

(d) if no Event of Default shall have occurred and be continuing, the Parent
Guarantor shall be permitted to make Restricted Payments (other than “dividends
or other distributions” as that terminology is contemplated in the definition of
Restricted Payments) to the extent such Restricted Payments are made from the
proceeds of, and reasonably contemporaneously with, any issuance of convertible
Debt of the Parent Guarantor, or from any issuance of Equity Interests of the
Parent Guarantor (other than Disqualified Stock); and

 

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(e) if no Event of Default shall have occurred and be continuing, the Parent
Guarantor shall be permitted to otherwise make Restricted Payments provided that
(i) such Restricted Payments, together with the aggregate amount of all other
Restricted Payments made by the Parent Guarantor (other than pursuant to clause
(d) above) after the Effective Date is less than the sum of (A) 50% of the
cumulative Consolidated Net Income of the Parent Guarantor from January 1, 2006
to the end of the most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit) plus (B) $37,500,000 and (ii) after giving pro forma effect to such
Restricted Payment, the Borrowers shall have $10,000,000, if such Restricted
Payment takes place prior to December 31, 2012, or $20,000,000, if such
Restricted Payment takes place on or after December 31, 2012, as applicable, in
the aggregate in cash or cash equivalents in the Deposit Accounts or unused
availability under the Commitments or a combination of such cash and cash
equivalents and such availability.

Section 9.05 Nature of Business. Neither the Parent Guarantor nor any Subsidiary
will engage in any material respect in any business other than the marine vessel
business, including any logistics services related thereto and any ancillary,
complementary or related line of business.

Section 9.06 Mergers, Acquisitions, New Subsidiaries. No Loan Party will
acquire, merge or consolidate with or into or make an Investment in any Person
(other than with another Loan Party), nor will it sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
any Vessel Collateral or all or substantially all of its Property (whether now
owned or hereafter acquired) to any Person; provided, that

(a) a Loan Party may merge with another Person (other than with another Loan
Party) if, and only if, (1) the Loan Party is the surviving entity, (2) the
merging Person is primarily in the marine vessel business, including any
logistics services related thereto or any ancillary, complementary or related
line of business, (3) immediately preceding and after giving effect to such
merger, (A) there is no Default or Event of Default and (B) the Borrowers shall
have $10,000,000, if such merger takes place prior to December 31, 2012, or
$20,000,000, if such merger takes place on or after December 31, 2012, as
applicable, in the aggregate in cash or cash equivalents in the Deposit Accounts
or unused availability under the Commitments or a combination of such cash and
cash equivalents and such availability, (4) after giving effect to such merger,
(A) the Parent Guarantor is in compliance (calculated with pro forma effect to
such merger) with Section 9.01(b) and 9.01(d) and (B) had the merger occurred on
the last day of the most recently completed fiscal quarter for which internal
financial statements are available, (i) for all such fiscal quarters ending on
or prior to September 30, 2012, the Senior Secured Leverage Ratio of the Parent
Guarantor (on a consolidated basis with its Consolidated Subsidiaries) would be
at least 0.25x below the maximum Senior Secured Leverage Ratio permitted under
Section 9.01(b) for such quarter end before an Event of Default otherwise would
exist thereunder or (ii) for all such fiscal quarters ending on or after
December 31, 2012, the Leverage Ratio of the Parent Guarantor (on a consolidated
basis with its Consolidated Subsidiaries) would be at least 0.50x below the
maximum Leverage Ratio permitted under Section 9.01(d) for such quarter end
before an Event of Default otherwise would exist thereunder, and (5) the
Borrowers shall have provided the Administrative Agent at least fifteen
(15) days advance notice of the merger and such information and materials in
connection therewith that the Administrative Agent or any Lender reasonably
requests. If clause (4)(B) in this Section 9.06(a) cannot be satisfied, the Loan
Party can still merge with another Person (other than with another Loan Party)
if the cost of acquisition of such Person (measured by the market value of the
securities and other Property transferred and amount of assumed Debt) to be
merged with the Loan Party does not exceed fifteen percent (15%) of Consolidated
Net Tangible Assets (as of the most recently completed fiscal quarter for which
internal financial statements are available) and the other requirements of this
paragraph are met.

 

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(b) a Loan Party may acquire or form a Subsidiary, make an Investment, or
acquire any vessel (including barges) or other capital assets if, and only if,
(1) the Subsidiary or the Investment, as applicable, is in the marine vessel
business, including any logistics services related thereto or any ancillary,
complementary or related line of business, (2) immediately preceding and after
giving effect to such acquisition, formation or Investment, (A) there is no
Default or Event of Default and (B) the Borrowers shall have $10,000,000, if
such Investment takes place prior to December 31, 2012, or $20,000,000, if such
Investment takes place on or after December 31, 2012, as applicable, in the
aggregate in cash or cash equivalents in the Deposit Accounts or unused
availability under the Commitments or a combination of such cash and cash
equivalents and such availability, (3) after giving effect to such acquisition,
formation or Investment, (A) the Parent Guarantor is in compliance (calculated
with pro forma effect for such acquisition, formation or Investment) with
Section 9.01(b) and 9.01(d) and (B) had the acquisition, formation or Investment
occurred on the last day of the most recently ended fiscal quarter for which
internal financial statements are available (i) for all such fiscal quarters
ending on or prior to September 30, 2012, the Senior Secured Leverage Ratio of
the Parent Guarantor (on a consolidated basis with its Consolidated
Subsidiaries, including the new Subsidiary) would be at least 0.25x below the
maximum Senior Secured Leverage Ratio permitted under Section 9.01(b) for such
quarter end before an Event of Default otherwise would exist thereunder or
(ii) for all such fiscal quarters ending on or after December 31, 2012, the
Leverage Ratio of the Parent Guarantor (on a consolidated basis with its
Consolidated Subsidiaries, including the new Subsidiary) would be at least 0.50x
below the maximum Leverage Ratio permitted under Section 9.01(d) for such
quarter end before an Event of Default otherwise would exist thereunder, (4) a
Loan Party shall control the management and operations of such Subsidiary,
(5) simultaneously with the acquisition or formation of such Subsidiary, such
Subsidiary shall (if required under subsection 8.15(c) hereof) execute and
deliver to the Administrative Agent, for the ratable benefit of the Lenders, a
guaranty of the payment of the Indebtedness, (6) no Loan Party shall at any time
be or become liable for such Subsidiary’s Debts, then or thereafter arising
unless such Subsidiary is a Guarantor Subsidiary, (7) except where such
acquisition or formation of a Subsidiary or other acquisition shall involve in
excess of fifteen percent (15%) of Consolidated Net Tangible Assets (as of the
most recently completed fiscal quarter for which internal financial statements
are available) in which event, prompt notice following such action shall be
permissible, the Borrowers shall have provided the Administrative Agent at least
fifteen (15) days advance notice of the acquisition and such information and
materials in connection therewith that the Administrative Agent or any Lender
reasonably requests. If clause (3)(B) in this Section 9.06(b) cannot be
satisfied, the Loan Party can still acquire or form a Subsidiary or make an
Investment if the cost of such acquisition, formation or Investment does not
exceed fifteen percent (15%) of Consolidated Net Tangible Assets (as of most
recently completed fiscal quarter for which internal financial statements are
available) and the other requirements of this paragraph are met. Nothing in this
Agreement is intended to prohibit any Loan Party from entering into any new
construction or conversion of vessels.

If a Loan Party desires to take any action contrary to the terms of this
Section 9.06(b), the Administrative Agent and the Required Lenders shall
consider such action; provided, that before the Administrative Agent and the
Required Lenders decide whether to consent, the Administrative Agent and the
Required Lenders shall have been provided with all such information and
materials that they request and had sufficient time to assess the proposed
action and, further, if the Administrative Agent and the Required Lenders so
consent, then the Parent Guarantor and the Borrowers and such other Persons as
may be required by the Administrative Agent shall execute and deliver such
documents as the Administrative Agent requires, in form and substance
satisfactory to the Administrative Agent.

Section 9.07 ERISA Compliance. No Loan Party will at any time (a) permit any
Plan maintained by it to engage in any “prohibited transaction” as such term is
defined in Section 4975 of the Code; (b) incur any “waived funding deficiency”
as such term is defined in Section 302 of ERISA; or (c) terminate any such Plan
in a manner which could result in the imposition of a Lien on the Property of
the Borrowers pursuant to Section 4068 of ERISA, any of which could reasonably
be expected to have a Material Adverse Effect.

 

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Section 9.08 Indentures. No Loan Party shall amend, modify, supplement,
refinance or waive any of the Indentures, or enter into other documents in
connection therewith, including without limitation as to any refinancing, to add
any collateral thereunder, to change any of the covenants to make them more
restrictive than the covenants contained in this Agreement or any of the
Indentures as it exists on the date hereof, or to change the maturity,
amortization and other payment schedules of the underlying loans. As to all
other amendments, modifications, supplements, refinances and waivers to such
documents, the Parent Guarantor and the Borrowers shall provide to the
Administrative Agent an executed copy promptly after the execution and delivery
thereof.

Section 9.09 Prepayment of the Indentures and Other Debt. The Parent Guarantor
and the Borrowers shall not prepay any Debt, other than

(a) the Indebtedness, in accordance with this Agreement;

(b) trade payables and accruals and deferrals, in the ordinary course of
business;

(c) the 2013 Convertible Senior Unsecured Notes, if on the date of such
prepayment, pro forma for such prepayment, the Parent Guarantor and the
Borrowers (i) have Available Liquidity of at least $100,000,000, (ii) can
demonstrate in the reasonable determination of the Administrative Agent, based
on good faith assumptions, that the business plan of the Parent Guarantor is
fully funded for the next 4 fiscal quarters, (iii) are in pro forma compliance
with the provisions of Section 9.01, and (iv) no Default or Event of Default
exists or would result from such prepayment;

(d) the 2014 Senior Unsecured Notes, if on the date of such prepayment, pro
forma for such prepayment, the Parent Guarantor and the Borrowers (i) have
Available Liquidity of at least $100,000,000; provided, that if the date of such
repayment is after April 30, 2013 and the 2013 Convertible Senior Unsecured
Notes have not been (A) refinanced to a date that is 91 days beyond the
scheduled Maturity Date or (B) Redeemed, then the Parent Guarantor and the
Borrowers must have Available Liquidity of at least $350,000,000, (ii) can
demonstrate in the reasonable determination of the Administrative Agent, based
on good faith assumptions, that the business plan of the Parent Guarantor is
fully funded for the next 4 fiscal quarters, (iii) are in pro forma compliance
with the provisions of Section 9.01, and (iv) no Default or Event of Default
exists or would result from such prepayment;

(e) as to other Debt, so long as there is no Default or Event of Default then
existing and doing so would not give rise to a Default or an Event of Default
and the Parent Guarantor and the Borrowers shall have $10,000,000 in the
aggregate in cash or cash equivalents in the Deposit Accounts or unused
availability under the Commitments or a combination of cash and cash equivalents
and such availability, partial prepayments of such other Debt or the refinancing
of any such other Debt in full.

Section 9.10 Loans. No Loan Party shall lend, advance, deposit with, assume,
extend credit, or guarantee any money to any Person; provided, that
(a) intra-company Debt outstanding at any time, owed by the Parent Guarantor, a
Borrower, a Subsidiary or a less than 50%-owned Affiliate of a Loan Party to a
Loan Party in connection with accounting allocations between such Persons
(provided, further, that such Debt shall be unsecured and subordinated to the
Indebtedness upon terms and conditions satisfactory to Administrative Agent) is
permitted, (b) loans or advances by a Loan Party to another Loan

 

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Party (provided, further, that such Debt shall be unsecured and subordinated to
the Indebtedness upon terms and conditions satisfactory to Administrative Agent)
are permitted, (c) loans or advances to Subsidiaries other than Guarantor
Subsidiaries the outstanding amount of which does not at any time exceed, in the
aggregate, $50,000,000, (d) loans or advances to officers, directors and
employees of a Borrower or the Parent Guarantor made in the ordinary course of
business and consistent with past practices and applicable law in an aggregate
amount not to exceed $500,000 outstanding at any one time, are permitted, (e) a
Loan Party may provide financing or make loans or guarantees in connection with
transactions involving Parent Guarantor’s Equity Interests between such Loan
Party and a Parent Guarantor sponsored employee stock ownership plan, provided
that the aggregate amount of such financings, loans or guarantees for all Loan
Parties may not exceed $25,000,000 outstanding at any time and (f) a Loan Party
may provide financing to a Person in connection with such Person acquiring an
ownership interest in a Subsidiary or a less than 50%-owned Affiliate of a Loan
Party (and such financing shall be for no other purpose) where such Person’s
ownership interest is reasonably necessary, advisable or incidental to the
conduct of business by such Subsidiary or Affiliate in a jurisdiction outside of
the United States (provided, further, that (i) as to such a financing provided
by a Guarantor Subsidiary that does not involve a transfer of equity in such
Guarantor Subsidiary and as to any such financing provided by a Loan Party, the
Person acquiring the equity interest shall be acquiring it from the applicable
Loan Party providing the financing, another Loan Party or a newly formed
Subsidiary or Affiliate of a Loan Party, (ii) no actual funds shall transfer
from the Loan Party in connection with any such financing and (iii) no such
financings in the aggregate shall be with respect to more than thirty percent
(30%) of the equity of any such Subsidiary or more than fifty-one percent
(51%) of the equity of any such Affiliate).

Section 9.11 Proceeds of Loans. The Borrowers will not permit the proceeds of
the Loans to be used for any purpose other than those permitted by Section 7.20.
Neither the Borrowers nor any Person acting on behalf of the Borrowers has taken
or will take any action which might cause any of the Loan Documents to violate
Regulations T, U or X or any other regulation of the Board or to violate
Section 7 of the Exchange Act or any rule or regulation thereunder, in each case
as now in effect or as the same may hereinafter be in effect. If requested by
the Administrative Agent, the Borrowers will furnish to the Administrative Agent
a statement to the foregoing effect in conformity with the requirements of FR
Form U-1 or such other form referred to in Regulation U, Regulation T or
Regulation X of the Board, as the case may be.

Section 9.12 Transactions with Affiliates. The Parent Guarantor and the
Borrowers will not, and will not permit any Subsidiary to, enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Loan Parties and Wholly-Owned Subsidiaries of the Borrowers or the
Parent Guarantor) unless such transactions are not otherwise prohibited under
this Agreement and are upon fair and reasonable terms no less favorable to the
Parent Guarantor, Borrowers or such Subsidiaries than they would obtain in a
comparable arm’s length transaction with a Person not an Affiliate. For the
avoidance of doubt, an employee stock ownership plan sponsored by Parent
Guarantor shall not be an “Affiliate”.

Section 9.13 Reserved.

Section 9.14 Reserved.

Section 9.15 Sale of Properties. The Parent Guarantor will not, and will not
permit any of its Subsidiaries to, sell, assign, convey or otherwise transfer
any Property except for (a) the sale of inventory in the ordinary course of
business; (b) the sale or transfer of equipment that is no longer necessary for
the business of the Parent Guarantor or such Subsidiary as determined by the
Borrowers or the Parent Guarantor or is replaced by equipment of at least
comparable value and use; (c) any TTB Sale (and in connection therewith clauses
(i) and (ii) but not (iii) set forth in the proviso below shall be applicable);

 

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and (d) sales or other dispositions of Property or any interest therein (other
than Vessel Collateral the sale, release, substitution or other disposition of
which requires the consent of all Lenders or the Required Lenders, as the case
may be, as provided in Section 8.16 unless such consent has been obtained) or
Subsidiaries owning Properties; provided that in the case of (c) and (d) above
(i) not less than seventy-five percent (75%) of the consideration received in
respect of such sale or other disposition shall be cash or cash equivalents (and
in the case of any TTB Sale, not less than fifty percent (50%) of the
consideration received in respect of such sale shall be cash or cash
equivalents), (ii) the consideration received in respect of such sale or other
disposition shall be equal to or greater than the fair market value of the
Property or Subsidiary subject of such sale or other disposition (as reasonably
determined by the board of directors of the Parent Guarantor and, if requested
by the Administrative Agent, the Parent Guarantor shall deliver a certificate of
a Responsible Officer of the Parent Guarantor certifying to that effect), and
(iii) all such sales or other dispositions (other than a TTB Sale) of Property
or Subsidiaries owning Properties does not have a fair market value in excess of
twenty percent (20%) of the Consolidated Net Tangible Assets of the Parent
Guarantor in any twelve (12) month period in the aggregate, determined based on
the most recently reported financial position of the Parent Guarantor and its
Subsidiaries on a consolidated basis as of the most recent quarter end preceding
the end of such twelve (12) month period.

Section 9.16 Negative Pledge Agreements; Dividend Restrictions. The Parent
Guarantor will not, and will not permit any Subsidiary to, create, incur, assume
or suffer to exist any contract, agreement or understanding (other than this
Agreement, the Security Instruments or Capital Leases creating Liens permitted
by Section 9.03(d)) which in any way prohibits or restricts the granting,
conveying, creation or imposition of any Lien on any of its Property in favor of
the Administrative Agent and the Lenders or restricts any Subsidiary from paying
dividends or making distributions to the Borrowers or any Guarantor, or which
requires the consent of or notice to other Persons in connection therewith
except for any restriction that may exist under the Indentures, any Replacement
Indenture or other indenture entered into by a Loan Party.

ARTICLE X

Events of Default; Remedies

Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof, by acceleration or otherwise; and (other than a payment
due on the Maturity Date) such failure is not cured within three (3) Business
Days after the applicable due date.

(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days.

(c) any representation or warranty made or deemed made pursuant to Section 6.02
by or on behalf of the Parent Guarantor, either Borrower or any Subsidiary in or
in connection with any Loan Document or any amendment or modification of any
Loan Document or waiver under such Loan Document, or in any report, certificate,
financial statement or other document furnished pursuant to any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material adverse respect when made or deemed made pursuant
to Section 6.02.

 

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(d) either Borrower or any Guarantor shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.05, Section 8.08, or in
Article IX.

(e) either Borrower or any Guarantor shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any
other Loan Document, and such failure shall continue unremedied for a period of
thirty (30) days after the earlier to occur of (i) written notice thereof from
the Administrative Agent to the Borrowers (which notice will be given at the
request of the Required Lenders) or (ii) the chief executive officer or the
chief financial officer of either Borrower or any Guarantor otherwise becoming
aware of such default.

(f) either Borrower or any Guarantor shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable.

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (after
the giving of notice, the lapse of time or both) the holder or holders of such
Material Indebtedness or any trustee or administrative agent on its or their
behalf to cause such Material Indebtedness to become due, or to require the
redemption thereof or any offer to redeem to be made in respect thereof, prior
to its scheduled maturity or require either Borrower or any Guarantor to make an
offer in respect thereof.

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of either Borrower or any Guarantor or its debts, or of a substantial
part of its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for either Borrower or any Guarantor or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or ordering any of the
foregoing shall be entered.

(i) either Borrower or any Guarantor shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(h), (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for either Borrower or any Guarantor or for a substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing.

(j) either Borrower or any Guarantor shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due.

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $2,000,000 (to the extent not covered by independent third party
insurance provided by insurers of the highest claims paying rating or financial
strength as to which the insurer does not dispute coverage and is not subject to
an insolvency proceeding) shall be rendered against either

 

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Borrower or any Guarantor or any combination thereof and the same shall remain
undischarged (or Borrower and the Guarantor shall not have provided for its
discharge) for a period of thirty (30) consecutive days during which execution
shall not be effectively stayed and, if stayed pending appeal, for such longer
period during such appeal while providing such accruals as may be required by
GAAP.

(l) any material provision of the Loan Documents, after delivery thereof, shall
for any reason, except to the extent permitted by the terms thereof, cease to be
in full force and effect and valid, binding and enforceable in accordance with
their terms against either Borrower or any Guarantor or shall be repudiated by
any of them, or cease to create a valid and perfected Lien of the priority
required thereby on any material part of the collateral purported to be covered
thereby, (except to the extent permitted by the terms of this Agreement, or
either Borrower or any Guarantor shall so state in writing) and such invalidity,
lack of binding effect or priority is not cured to the Administrative Agent’s
satisfaction within thirty (30) days after the earliest to occur of (x) notice
from the Administrative Agent concerning its belief that a material provision is
not valid and binding or asserting the lack of priority of a Lien, or (y) the
chief executive officer or chief financial officer of a Borrower or the Parent
Guarantor otherwise becomes aware that any material provision is not valid and
binding or that a Lien lacks the intended priority.

(m) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred, has
resulted in, or could reasonably be expected to result in, liability of either
Borrower and any Guarantor in an aggregate amount that could reasonably be
expected to have a Material Adverse Effect.

(n) a Change in Control shall occur.

(o) either Borrower or the Parent Guarantor ceases to be a citizen of the United
States of America within the meaning of Title 46, Section 802 of the United
States Code; or

(p) a Material Adverse Effect shall occur.

Section 10.02 Remedies.

(a) In the case of an Event of Default other than one described in
Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the request of the Required Lenders, shall, by notice to the Borrowers,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the
Borrowers and the Parent Guarantors accrued hereunder and under the Notes and
the other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 2.08(j)), shall
become due and payable immediately, without presentment, demand, protest, notice
of intent to accelerate, notice of acceleration or other notice of any kind, all
of which are hereby waived by the Borrowers and the Parent Guarantor; and in
case of an Event of Default described in Section 10.01(h), Section 10.01(i) or
Section 10.01(j), the Commitments shall automatically terminate and the Notes
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and the other obligations of the Borrowers and the Parent
Guarantors accrued hereunder and under the Notes and the other Loan Documents
(including, without limitation, the payment of cash collateral to secure the LC
Exposure as provided in Section 2.08(j)), shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrowers and the Parent Guarantor.

 

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(b) In the case of the occurrence of an Event of Default, the Administrative
Agent and the Lenders will have all other rights and remedies available at law
and equity.

(c) All proceeds realized from the liquidation or other disposition of
collateral or otherwise received after maturity of the Notes, whether by
acceleration or otherwise, shall be applied:

(i) first, to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Administrative Agent
in its capacity as such;

(ii) second, pro rata to payment or reimbursement of that portion of the
Indebtedness constituting fees, expenses and indemnities payable to the Lenders;

(iii) third, pro rata to payment of accrued interest on the Loans;

(iv) fourth, pro rata to (A) payment of principal outstanding on the Loans,
(B) the payment obligations owing to an Administrative Agent, a Lender or an
Affiliate of an Administrative Agent or a Lender under a Swap Agreement
permitted by this Agreement and (C) to serve as cash collateral to be held by
the Administrative Agent to secure the LC Exposure;

(v) fifth, pro rata to any other Indebtedness; and

(vi) sixth, any excess, after all of the Indebtedness shall have been
indefeasibly paid in full in cash, shall be paid to the Borrowers or as
otherwise required by any Governmental Requirement.

Section 10.03 Reserved.

Section 10.04 Acceleration of Swap Agreements. Notwithstanding anything to the
contrary contained herein, acceleration and termination of the Swap Agreements
involving the Administrative Agent, any Lender or the Affiliate of any
Administrative Agent or Lender shall be governed by the terms of the Swap
Agreements.

ARTICLE XI

The Administrative Agent

Section 11.01 Appointment; Powers. Each of the Lenders hereby appoints Wells
Fargo Bank, N.A. as its Administrative Agent. Each Lender authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

Section 11.02 Duties and Obligations of the Administrative Agent. The
Administrative Agent shall have no duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing (the use of the

 

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term “Administrative Agent” herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law; rather, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties), (b) the Administrative Agent shall not have
any duty to take any discretionary action or exercise any discretionary powers,
except as provided in Section 11.03, and (c) except as expressly set forth
herein, the Administrative Agent shall have no duty to disclose, and shall not
be liable for the failure to disclose, any information relating to the
Borrowers, the Parent Guarantor or any of its Subsidiaries that is communicated
to or obtained by the Lender serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrowers, the Parent Guarantor or a Lender, and
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or under any other Loan Document or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or in
any other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, (v) the satisfaction of any condition set forth in
Article VI or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or as to those conditions
precedent expressly required to be to the Administrative Agent’s satisfaction,
(vi) the existence, value, perfection or priority of any collateral security or
the financial or other condition of the Borrowers or the Parent Guarantor and
its Subsidiaries, or (vii) any failure by the Borrowers or any other Person
(other than itself) to perform any of its obligations hereunder or under any
other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or therein. For
purposes of determining compliance with the conditions specified in Article VI,
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received written notice from such Lender prior
to the proposed Effective Date specifying its objection thereto.

Section 11.03 Action by Administrative Agent. The Administrative Agent shall
have no duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) and in all cases the Administrative Agent shall be
fully justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02) specifying the action to
be taken and (b) be indemnified to its satisfaction by the Lenders against any
and all liability and expenses which may be incurred by it by reason of taking
or continuing to take any such action. The instructions as aforesaid and any
action taken or failure to act pursuant thereto by the Administrative Agent
shall be binding on all of the Lenders. If a Default has occurred and is
continuing, then the Administrative Agent shall take such action with respect to
such Default as shall be directed by the requisite Lenders in the written
instructions (with indemnities) described in this Section 11.03, provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interests of the applicable Lenders. In no event,
however, shall the Administrative Agent be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement, the Loan Documents or applicable law. If a Default has occurred
and is continuing, the Administrative Agent

 

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shall not have any obligation to perform any act in respect thereof. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02), and otherwise the Administrative Agent shall not be
liable for any action taken or not taken by it hereunder or under any other Loan
Document or under any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith INCLUDING ITS OWN
ORDINARY NEGLIGENCE, except for its own gross negligence or willful misconduct.

Section 11.04 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon, except in the
case of gross negligence or willful misconduct by the Administrative Agent and
each of the Borrowers, the Guarantors, the Lenders, and the Issuing Lender
hereby waives the right to dispute the Administrative Agent’s record of such
statement absent manifest error. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrowers and the Parent Guarantor),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Administrative Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof permitted
hereunder shall have been filed with the Administrative Agent.

Section 11.05 Sub-Administrative Agents. The Administrative Agent may perform
any and all its duties and exercise its rights and powers by or through any one
or more sub-Administrative Agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-Administrative Agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of the preceding Sections of this
Article XI shall apply to any such sub-Administrative Agent and to the Related
Parties of the Administrative Agent and any such sub-Administrative Agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent. Neither Borrower nor the Parent Guarantor shall be
responsible for payment of fees or expenses of any such sub-Administrative
Agent.

Section 11.06 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section 11.06, the Administrative Agent may resign at any time by notifying
the Lenders, the Issuing Lender, the Borrowers and the Parent Guarantor, and the
Administrative Agent may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gives notice of its resignation or removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Lender, appoint a successor Administrative
Agent, or an Affiliate of any such Lender or such other location as approved by
the Required Lenders or if no such successor shall be appointed by the retiring
Administrative Agent as aforesaid, the Required Lenders shall thereafter perform
all of the duties of the retiring Administrative Agent hereunder until such
appointment by the Required Lenders is made and accepted. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Administrative Agent shall be

 

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the same as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the Administrative Agent’s resignation
hereunder, the provisions of this Article XI and Section 12.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its
sub-Administrative Agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

Section 11.07 Administrative Agents as Lenders. Each Lender serving as an
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not an Administrative Agent, and such Lender and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrowers, the Parent Guarantor or any of its Subsidiaries or other
Affiliates as if it were not an Administrative Agent hereunder.

Section 11.08 No Reliance. Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent, any other Administrative
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Administrative Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder. The Administrative
Agent shall not be required to keep itself informed as to the performance or
observance by the Borrowers, the Parent Guarantor or any of their Subsidiaries
of this Agreement, the Loan Documents or any other document referred to or
provided for herein or to inspect the Property or books of the Borrowers, the
Parent Guarantor or their Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Administrative Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrowers, the
Parent Guarantor (or any of their Affiliates) which may come into the possession
of such Administrative Agent or any of its Affiliates. In this regard, each
Lender acknowledges that Vinson & Elkins L.L.P. is acting in this transaction as
special counsel to Wells Fargo and its Affiliates only, except to the extent
otherwise expressly stated in any legal opinion or any Loan Document. Each other
party hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.

Section 11.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrowers, the Guarantors or any of their
Subsidiaries, the Administrative Agent (irrespective of whether the principal of
any Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrowers or the Guarantors) shall be entitled and empowered,
by intervention in such proceeding or otherwise:

(a) to file a proof-of-claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Indebtedness that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;

 

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(b) to collect and receive any monies or other Property payable or deliverable
on any such claims and to distribute the same; and

(c) and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 11.10 Authority of the Administrative Agent to Release Collateral and
Liens. Each Lender and the Issuing Lender hereby authorizes the Administrative
Agent to release any collateral that is permitted to be sold or released
pursuant to the terms of the Loan Documents. Each Lender and the Issuing Lender
hereby authorizes the Administrative Agent to execute and deliver to the
Borrowers, at the Borrowers’ sole cost and expense, any and all releases of
Liens, termination statements, assignments or other documents reasonably
requested by the Borrowers in connection with any sale or other disposition of
Property to the extent such sale or other disposition is permitted by the terms
of Section 9.15 or is otherwise authorized by the terms of the Loan Documents.

ARTICLE XII

Miscellaneous

Section 12.01 Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to Section 12.01(b)), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

(i) if to the Borrowers, to them at Hornbeck Offshore Services, Inc., 103
Northpark Blvd., Suite 300, Covington, LA 70433, Attention: James O. Harp, Jr.,
Executive Vice President and Chief Financial Officer; Telecopy No.:
(985) 727-2006.

(ii) if to the Administrative Agent, to it at WFBLS Charlotte Agency Services,
1525 W WT Harris Blvd, MAC D1109-019 Charlotte, NC 28262, Attention of Diana
Horn (Telecopy No. 704-590-2782), with a copy to Corbin Womac, Vice President &
Relationship Manager, at 1000 Louisiana, 9th Floor, MAC T0002-090, Houston,
Texas 77002, (Telecopy No. 713-739-1087);

(iii) if to the Issuing Lender, to it at WFBLS Charlotte Agency Services, 1525 W
WT Harris Blvd, MAC D1109-019 Charlotte, NC 28262, Attention of Diana Horn
(Telecopy No. 704-590-2782), with a copy to Corbin Womac, Vice President &
Relationship Manager, at 1000 Louisiana, 9th Floor, MAC T0002-090, Houston,
Texas 77002, (Telecopy No. 713-739-1087);

(iv) if to any other Lender, to it at its address (or telecopy number) set forth
in Schedule 12.01(a) hereto.

 

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(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Articles II, III, IV and V unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrowers and the Parent Guarantor may, in their respective discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

Section 12.02 Waivers; Amendments.

(a) No failure on the part of the Administrative Agent, the Issuing Lender or
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege, or any abandonment or discontinuance
of steps to enforce such right, power or privilege, under any of the Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any of the Loan Documents
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies of the Administrative Agent,
the Issuing Lender and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrowers therefrom shall in any
event be effective unless the same shall be permitted by Section 12.02(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, the Issuing Lender or any other Lender may have had notice or knowledge
of such Default at the time.

(b) Neither this Agreement nor any provision hereof nor any Security Instrument
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrowers, the Parent
Guarantor and the Required Lenders or by the Borrowers, the Parent Guarantor and
the Administrative Agent with the consent of the Required Lenders; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, or reduce any other Indebtedness hereunder or under any other
Loan Document, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment or prepayment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or any other Indebtedness hereunder or under any other Loan
Document, or reduce the amount of, waive or excuse any such payment, or postpone
or extend the Maturity Date without the written consent of each Lender affected
thereby, (iv) change Section 4.01(b) or Section 4.01(c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) release the Parent Guarantor (except as set forth in
the Guaranty and Collateral Agreement) or release all or substantially all of
the collateral (other than as provided in Section 11.10) without the written
consent of each Lender, or (vi) change any of the provisions of this
Section 12.02(b) or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or

 

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grant any consent hereunder or any other Loan Documents, without the written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Issuing Lender hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent or the Issuing Lender, as the case
may be. Notwithstanding the foregoing, any supplement to Schedule 7.15
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

Section 12.03 Expenses, Indemnity; Damage Waiver.

(a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent and its Affiliates, including, without limitation,
the reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and Appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and
other charges incurred by any Administrative Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out of pocket expenses incurred by the
Issuing Lender in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder, (iv) all
out-of-pocket expenses incurred by any Administrative Agent, the Issuing Lender
or any Lender, including the fees, charges and disbursements of any counsel for
any Administrative Agent, the Issuing Lender or any Lender, in connection with
the enforcement or protection of its rights in connection with this Agreement or
any other Loan Document, including its rights under this Section 12.03, and
including, without limitation, all such out-of-pocket expenses incurred during
any workout or restructuring in respect of such Loans or Letters of Credit.

(b) THE BORROWERS SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING LENDER
AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH
SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE
HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED
EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY
INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY
OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF THE BORROWERS OR ANY SUBSIDIARY TO COMPLY WITH THE
TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL
REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF

 

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ANY WARRANTY OR COVENANT OF THE BORROWERS OR ANY PARENT GUARANTOR SET FORTH IN
ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS
DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE
OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE
ISSUING LENDER TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY
LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER
IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH,
(v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS
OF THE BORROWERS, THE PARENT GUARANTOR AND THEIR SUBSIDIARIES BY THE PARENT
GUARANTOR, THE BORROWERS AND THEIR SUBSIDIARIES, (vii) ANY ASSERTION THAT THE
LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWERS,
THE PARENT GUARANTOR OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING
WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED
RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL,
OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR
PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE BORROWERS OR ANY SUBSIDIARY
WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWERS OR ANY SUBSIDIARY,
(x) THE PAST OWNERSHIP BY THE BORROWERS OR ANY SUBSIDIARY OF ANY OF THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED
RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF
OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF
THE PROPERTIES OWNED OR OPERATED BY THE BORROWERS OR ANY SUBSIDIARY OR ANY
ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY THE BORROWERS OR ANY OF THEIR SUBSIDIARIES,
(xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWERS OR ANY OF
THEIR SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT ANY OF THE ABOVE
INDEMNITIES SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT
SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY
A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

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(c) To the extent that the Borrowers fail to pay any amount required to be paid
by either Borrower to any Administrative Agent or the Issuing Lender under
Section 12.03(a) or (b), each Lender severally agrees to pay to such
Administrative Agent or the Issuing Lender, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against such Administrative Agent or the Issuing Lender in its capacity as such.

(d) To the extent permitted by applicable law, the Borrowers shall not assert,
and hereby waive, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.

(e) All amounts due under this Section 12.03 shall be payable not later than ten
(10) days after written demand therefor.

Section 12.04 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) except as permitted by Section 9.12, the
Borrowers may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrowers without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 12.04. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), Participants (to the extent provided in Section 12.04(c))
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent, the Issuing Lender and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) pursuant to an Assignment and Assumption
Agreement substantially in the form of Exhibit G (an “Assignment”) with the
prior written consent of: (A) the Borrowers and the Parent Guarantor (such
consent not to be unreasonably withheld) provided that no consent of the
Borrowers and the Parent Guarantor shall be required for an assignment to a
Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an
Event of Default under Section 10(a), (b), (h) or (i) has occurred and is
continuing, any other Person; (B) the Administrative Agent and; (C) the Issuing
Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
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the Administrative Agent) shall not be less than $5,000,000, unless each of the
Borrowers, the Parent Guarantor and the Administrative Agent otherwise consent,
provided that no such consent of the Borrowers and the Parent Guarantor shall be
required if an Event of Default under Section 10(a), (b), (h) or (i) has
occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment, together with a processing and recordation
fee of $3,500;

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;

(E) notwithstanding anything to the contrary contained in this Agreement, if
such Assignment is made at a time when an Event of Default has occurred and is
continuing, the written consent of the Borrowers to such Assignment shall not be
required; and

(F) notwithstanding anything to the contrary herein, no assignments shall be
made to a Defaulting Lender or any of its Subsidiaries or Affiliates.

For purposes of this Section 12.04, “Approved Fund” means any Person (other than
a natural person) that is engaged in making, purchasing, holding or investing in
bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

(iii) Subject to Section 12.04(b)(iv) and the acceptance and recording thereof,
from and after the effective date specified in each Assignment the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment, be released from its obligations under
this Agreement (and, in the case of an Assignment covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Section 5.01, Section 5.02, Section 5.03 and Section 12.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.04 shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.04(c)(i).

(iv) The Administrative Agent, acting for this purpose as an administrative
agent of the Borrowers and the Parent Guarantor, shall maintain at one of its
offices a copy of each Assignment delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Lender and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
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notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers and the Parent Guarantor, the Issuing Lender and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice. In connection with any changes to the Register, if necessary, the
Administrative Agent will reflect the revisions on Annex I and forward a copy of
such revised Annex I to the Borrowers, the Issuing Lender and each Lender.

(v) Upon its receipt of a duly completed Assignment executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
and applicable required tax forms (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 12.04(b)
and any written consent to such assignment required by Section 12.04(b), the
Administrative Agent shall accept such Assignment and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register after meeting the
requirements provided in this Section 12.04(b).

(c) (i) Any Lender may, without the consent of the Borrowers or the
Administrative Agent or the Issuing Lender sell participations to one or more
Lenders or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Administrative Agent, the Issuing
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the proviso to
Section 12.02 that affects such Participant. In addition such agreement must
provide that the Participant be bound by the provisions of Section 12.03.
Subject to Section 12.04(c)(ii), the Borrowers agree that each Participant shall
be entitled to the benefits of Sections 5.01, 5.02 and 5.03 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
Section 12.04(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.01(c) as though it were a
Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 5.02 or Section 5.03 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers’
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 5.03 unless the
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with
Section 5.03(g) as though it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 12.04(d) shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

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(e) Notwithstanding any other provisions of this Section 12.04, no transfer or
assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrowers and the Parent Guarantors to file a registration
statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any
state.

(f) Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that affects such Participant. The
Borrowers agrees that each Participant shall be entitled to the benefits of
Section 5.01, 5.02 and 5.03 (subject to the requirements and limitations
therein) to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section; provided that such
Participant (A) agrees to be subject to the provisions of Sections 2.12 and 5.04
as if it were an assignee under paragraph (b) of this Section; and (B) shall not
be entitled to receive any greater payment under Sections 5.01 or 5.03, with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. Each Lender that sells a participation agrees, at
the Borrowers’ request and expense, to use reasonable efforts to cooperate with
the Borrowers to effectuate the provisions of Section 2.12 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section12.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 4.01 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrowers, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(g) Notwithstanding anything in this Agreement to the contrary, in no event
shall any Lender or Participant assign any portion of or sell any participations
in its rights and obligations under this Agreement to a competitor in the marine
vessel business, including any logistic services related thereto or any
ancillary, complementary or related line of business, or an Affiliate of such
competitor, of the Parent Guarantor, the Borrowers, or a Subsidiary. This
prohibition shall be included in any documentation effecting an assignment of
any interest herein or in the Notes issued hereunder and any attempted
assignment in violation of this provision shall be void ab initio.

Section 12.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by the
Borrowers herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
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Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Lender or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 5.01, 5.02, 5.03 and 12.03 and Article
XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.

(b) To the extent that any payments on the Indebtedness or proceeds of any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any Bankruptcy Law, common law or
equitable cause, then to such extent, the Indebtedness so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative Agent’s and the Lenders’ Liens, rights, powers and remedies
under this Agreement and each Loan Document shall continue in full force and
effect. In such event, each Loan Document shall be automatically reinstated and
the Borrowers shall take such action as may be reasonably requested by the
Administrative Agent and the Lenders to effect such reinstatement.

Section 12.06 Counterparts; Integration; Effectiveness.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.

(b) This Agreement, the other Loan Documents and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.

(c) Except as provided in Section 6.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

Section 12.07 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender or Administrative Agent and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations (of whatsoever kind, including, without limitations
obligations under Swap Agreements) at any time owing

 

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by such Lender or Administrative Agent or any Affiliate of such Lender or
Administrative Agent to or for the credit or the account of the Borrowers or any
Guarantor against any of and all the obligations of the Borrowers or any
Guarantor owed to such Lender or Administrative Agent now or hereafter existing
under this Agreement or any other Loan Document, irrespective of whether or not
such Lender or Administrative Agent shall have made any demand under this
Agreement or any other Loan Document and although such obligations may be
unmatured; provided, however, that in no event shall the Administrative Agent or
any Lender be entitled to exercise any statutory or common law right of set-off
in the Investment Accounts in connection with and as against the Indebtedness.
The rights of each Lender or Administrative Agent under this Section 12.08 are
in addition to other rights and remedies (including other rights of setoff)
which such Lender or Administrative Agent or their respective Affiliates may
have.

Section 12.09 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.

(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS; EXCEPT THAT CHAPTER 346 OF THE
TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT SHALL BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY
LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS
SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM
OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING
JURISDICTION.

(c) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR ADMINISTRATIVE AGENT OF COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND
(iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
12.09.

 

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Section 12.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11 Confidentiality. Each of the Administrative Agent, the Issuing
Lender and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and Administrative Agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 12.11, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any Swap Agreement relating to the Borrowers and their
obligations, (g) with the consent of the Borrowers and the Parent Guarantor or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section 12.11 or (ii) becomes available to the
Administrative Agent, the Issuing Lender or any Lender on a nonconfidential
basis from a source other than the Borrowers. For the purposes of this
Section 12.11, “Information” means all information received from the Borrowers,
the Parent Guarantor or any Subsidiary relating to the Borrowers, the Parent
Guarantor or any Subsidiary and their businesses, other than any such
information that is available to the Administrative Agent, the Issuing Lender or
any Lender on a nonconfidential basis prior to disclosure by the Borrowers, the
Parent Guarantor or a Subsidiary; provided that, in the case of information
received from the Borrowers, the Parent Guarantor or any Subsidiary after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 12.11 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

Section 12.12 Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrowers); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically by such Lender as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the

 

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principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrowers). All sums paid or agreed to be paid to
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the stated term of the Loans evidenced by the
Notes until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (i) the amount of interest
payable to any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of
any subsequent interest computation period the amount of interest otherwise
payable to such Lender would be less than the amount of interest payable to such
Lender computed at the Highest Lawful Rate applicable to such Lender, then the
amount of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate
applicable to a Lender, such Lender elects to determine the applicable rate
ceiling under such Chapter by the weekly ceiling from time to time in effect.
Chapter 346 of the Texas Finance Code does not apply to the Borrowers’
obligations hereunder.

Section 12.13 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
LEGAL COUNSEL IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND
THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME
ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY
FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT
CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE
OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

Section 12.14 Collateral Matters; Swap Agreements. The benefit of the Security
Instruments and of the provisions of this Agreement relating to any collateral
securing the Indebtedness shall also extend to and be available to those
Lenders, Administrative Agents or their Affiliates which are counterparties to
any Swap Agreement with the Borrowers, the Parent Guarantor or any of their
Subsidiaries on a pro rata basis in respect of any obligations of the Borrowers,
the Parent Guarantor or any of their Subsidiaries which arise under any such
Swap Agreement while such Person or its Affiliate is a Lender or Administrative
Agent, but only while such Person or its Affiliate is a Lender or Administrative
Agent, including any Swap Agreements between such Persons in existence prior to
the date hereof. No Lender or Administrative Agent or any Affiliate of a Lender
shall have any voting rights under any Loan Document as a result of the
existence of obligations owed to it under any such Swap Agreements.

 

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Section 12.15 No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Lender
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrowers, the Parent Guarantor and no other Person (including,
without limitation, any Subsidiary of the Borrowers, any Subsidiary of the
Guarantors, any obligor, contractor, subcontractor, supplier or materialsman)
shall have any rights, claims, remedies or privileges hereunder or under any
other Loan Document against the Administrative Agent, the Issuing Lender or any
Lender for any reason whatsoever. There are no third party beneficiaries other
than the Parent Guarantor.

Section 12.16 Electronic Communications.

(a) The Borrowers and the Parent Guarantor hereby agree that, unless otherwise
requested by the Administrative Agent, each will provide to the Administrative
Agent all information, documents and other materials that it is obligated to
furnish to the Administrative Agent pursuant to the Loan Documents, including,
without limitation, all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) relates to a request for a new, or a conversion of
an existing, Borrowing or other extension of credit (including any election of
an interest rate or interest period relating thereto), (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of
Default under this Agreement, (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or any Borrowing
or other extension of credit hereunder or (v) initiates or responds to legal
process (all such non-excluded information being referred to herein collectively
as the “Communications”) by transmitting the Communications in an
electronic/soft medium (provided such Communications contain any required
signatures) in a format acceptable to the Administrative Agent, to both Corbin
Womac at corbin.m.womac@wellsfargo.com and Diana Horn at
diana.horn@wellsfargo.com (or such other e-mail address designated by the
Administrative Agent from time to time).

(b) Each party hereto agrees that the Administrative Agent may make the
Communications available to the Lenders and the Issuing Lender by posting the
Communications on IntraLinks or another relevant website, if any, to which each
Lender, the Issuing Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent) (the “Platform”). Nothing in this Section 12.16 shall prejudice the right
of the Administrative Agent to make the Communications available to the Lenders
and the Issuing Lender in any other manner specified in the Loan Documents.

(c) The Borrowers hereby acknowledge that certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrowers or their securities) (each,
a “Public Lender”). The Borrowers hereby agree that (i) Communications that are
to be made available on the Platform to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof, (ii) by marking
Communications “PUBLIC,” the Borrowers shall be deemed to have authorized the
Administrative Agents, the Issuing Lender and the Lenders to treat such
Communications as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Borrowers or their securities for purposes of United States federal and state
securities laws, (iii) all Communications marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Lender,” and
(iv) the Administrative Agents shall be entitled to treat any Communications
that are not marked “PUBLIC” as being suitable only for posting on a portion of
the Platform not designated “Public Lender.”

 

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(d) Each Lender agrees that e-mail notice to it (at the address provided
pursuant to the next sentence and deemed delivered as provided in the next
paragraph) specifying that Communications have been posted to the Platform shall
constitute effective delivery of such Communications to such Lender for purposes
of the Loan Documents. Each Lender agrees (i) to notify the Administrative Agent
in writing (including by electronic communication) from time to time to ensure
that the Administrative Agent has on record an effective e-mail address for such
Lender to which the foregoing notice may be sent by electronic transmission and
(ii) that the foregoing notice may be sent to such e-mail address.

(e) Each party hereto agrees that any electronic communication referred to in
this Section 12.16 shall be deemed delivered upon the posting of a record of
such communication (properly addressed to such party at the e-mail address
provided to the Administrative Agent) as “sent” in the e-mail system of the
sending party or, in the case of any such communication to the Administrative
Agent, upon the posting of a record of such communication as “received” in the
e-mail system of the Administrative Agent; provided that if such communication
is not so received by the Administrative Agent during the normal business hours
of the Administrative Agent, such communication shall be deemed delivered at the
opening of business on the next Business Day for the Administrative Agent.

(f) Each party hereto acknowledges that (i) the distribution of material through
an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Communications and the Platform are provided “as is” and “as available,”
(iii) none of the Administrative Agents, their affiliates nor any of their
respective officers, directors, employees, Administrative Agents, advisors or
representatives (collectively, the “Administrative Agent Parties”) warrants the
adequacy, accuracy or completeness of the Communications or the Platform, and
each Administrative Agent Party expressly disclaims liability for errors or
omissions in any Communications or the Platform, and (iv) no warranty of any
kind, express, implied or statutory, including, without limitation, any warranty
of merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by any
Administrative Agent Party in connection with any Communications or the
Platform.

Section 12.17 USA Patriot Act Notice. Each Lender hereby notifies the Borrowers
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of the Borrowers and other information
that will allow such Lender to identify the Borrowers in accordance with the
Act.

Section 12.18 Existing Credit Agreement. On the date of this Agreement, the
Existing Credit Agreement shall be amended and restated in its entirety by this
Agreement, and the Existing Credit Agreement shall be replaced hereby; provided
that the Borrowers, the Administrative Agent and the Lenders agree that on the
date of the initial funding of Loans hereunder, the loans and other Indebtedness
of the Borrowers under the Existing Credit Agreement, if applicable, shall be
renewed, rearranged, modified and extended with the proceeds of the initial
funding and the “Commitments” of the lenders under the Existing Credit Agreement
shall be superseded by this Agreement and terminated. This Agreement is not in
any way intended to constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
portion of such obligations and liabilities. The terms and conditions of this
Agreement and the Administrative Agent’s, the Lenders’, the Swing Line Lender’s
and the Issuing Lenders’ rights and remedies under this Agreement and the other
Loan Documents shall apply to all of the Indebtedness incurred under the
Existing Credit Agreement. The undersigned hereby waive (i) any right to receive
any notice of such termination, (ii) any right to receive any notice of
prepayment of amounts owed under the Existing Credit Agreement, and (iii) any
right to receive compensation under the Existing Credit Agreement in respect of
Eurodollar Loans outstanding under the Existing Credit Agreement resulting from
such rearrangement. Each Lender that was a party to the Existing Credit
Agreement hereby agrees to return to the Borrowers, with reasonable promptness,
any promissory note delivered by the Borrowers to such Lender in connection with
the Existing Credit Agreement.

 

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Section 12.19 Reallocation of Commitments.

(a) For an agreed consideration, each Lender (individually an “Assignor” and
collectively, the “Assignors”) hereby irrevocably sells and assigns, severally
and not jointly, (i) all of such Assignor’s rights and obligations in its
capacity as Lender under the Existing Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to its
Commitment and Credit Exposure, as the case may be, identified in Annex II
attached hereto and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of such Assignor
(in its capacity as Lender) against any Person, whether known or unknown,
arising under or in connection with the Existing Credit Agreement, any other
documents or instruments delivered pursuant thereto or the transactions governed
thereby or in any way based on or related to any of the foregoing, including
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively for all Assignors as the “Assigned Interests”) to the Lenders
(individually, an “Assignee” and, collectively, the “Assignees”) set forth on
Annex I hereto (which shall replace the Annex I to the Existing Credit Agreement
as of the Effective Date), and each Assignee hereby irrevocably purchases and
assumes from each Assignor such Assignee’s percentage (as set forth on Annex I)
of the Assigned Interests, subject to and in accordance with this Agreement, as
of the Effective Date. Such sale and assignment is without recourse to the
Assignors and, except as expressly provided in this Agreement, without
representation or warranty by the Assignors.

(b) From and after the Effective Date, the Administrative Agent shall distribute
all payments in respect of the Assigned Interests (including payments of
principal, interest, fees and other amounts) to the appropriate Assignors for
amounts which have accrued to but excluding the Effective Date and to the
appropriate Assignees for amounts which have accrued from and after the
Effective Date.

[SIGNATURES BEGIN NEXT PAGE]

 

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The parties hereto have caused this Amended and Restated Credit Agreement to be
duly executed as of the day and year first above written.

 

BORROWERS:     HORNBECK OFFSHORE SERVICES, LLC     By:    /s/ James O. Harp, Jr.
      James O. Harp, Jr.      

Executive Vice President and

Chief Financial Officer

   

HORNBECK OFFSHORE TRANSPORTATION, LLC

    By:    /s/ James O. Harp, Jr.       James O. Harp, Jr.      

Executive Vice President and

Chief Financial Officer

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PARENT GUARANTOR:       HORNBECK OFFSHORE SERVICES, INC.     By:    /s/ James O.
Harp, Jr.       James O. Harp, Jr.      

Executive Vice President and

Chief Financial Officer

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ADMINISTRATIVE AGENT:     WELLS FARGO BANK, N.A.     By:    /s/ Philip C.
Lauinger III     Name:    Philip C. Lauinger III     Title:   Managing Director

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LENDERS:     WELLS FARGO BANK, N.A.     By:    /s/ Philip C. Lauinger III    
Name:    Philip C. Lauinger III     Title:   Managing Director

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    COMERICA BANK     By:    /s/ Gary Culbertson     Name:    Gary Culbertson  
  Title:   Vice President

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    AMEGY BANK N.A.     By:    /s/ G. Scott Collins     Name:    G. Scott
Collins     Title:   Senior Vice President

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    DNB NOR BANK ASA     By:    /s/ Barbara Gronquist     Name:    Barbara
Gronquist     Title:   Senior Vice President

        By:    /s/ Stian Løvseth     Name:    Stian Løvseth     Title:   Vice
President

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    JPMORGAN CHASE BANK, N.A.     By:    /s/ Donald K. Hunt     Name:    Donald
K. Hunt     Title:   Officer

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    CAPITAL ONE, N.A.     By:    /s/ Mark Preston     Name:    Mark Preston    
Title:   Vice President

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    WHITNEY BANK     By:    /s/ Eric B. Goebel     Name:    Eric B. Goebel    
Title:   Vice President

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    BARCLAYS BANK PLC     By:    /s/ Vanessa A. Kurbatskiy     Name:    Vanessa
A. Kurbatskiy     Title:   Vice President