$100,000,000.00

AMENDED AND RESTATED CREDIT AGREEMENT

Among

GLOBAL INDUSTRIES, LTD.,

and

GLOBAL OFFSHORE MEXICO, S. DE R.L. DE C.V.

as Borrowers,

THE LENDERS NAMED IN THIS CREDIT AGREEMENT

as Lenders,

CALYON NEW YORK BRANCH (F/K/A CREDIT LYONNAIS NEW YORK BRANCH)

as Administrative Agent

WELLS FARGO FOOTHILL, INC.

as Collateral Monitoring Agent

ABLECO FINANCE LLC

as Documentation Agent

NATEXIS BANQUES POPULAIRES

as Syndication Agent

CALYON SECURITIES

as Lead Arranger and Book Runner

August 6, 2004

--------------------------------------------------------------------------------

TABLE OF CONTENTS

                                                                                                                
Page

ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS                                 
1 

  Section 1.01 Certain Defined Terms   1   Section 1.01 Computation of Time
Periods  25   Section 1.01 Accounting Terms 25   Section 1.01 Classes and Types
of Advances 25   Section 1.01 Miscellaneous 25

ARTICLE II THE
ADVANCES                                                                                 
26

  Section 2.01 The Advances 26   Section 2.01 Method of Borrowing  28   Section
2.01 Fees 32   Section 2.01 Reduction of the Commitments 33   Section 2.01
Repayment 33   Section 2.01 Interest  33   Section 2.07 Prepayments 34   Section
2.01 Funding Losses 37   Section 2.01 Increased Costs 37   Section 2.01 Payments
and Computations 38   Section 2.01 Taxes 39   Section 2.01 Sharing of Payments,
Etc 41   Section 2.01 Lender Replacement; Agents 42   Section 2.01 Applicable
Lending Offices 43   Section 2.01 Letters of Credit 43   Section 2.01 Cash
Management 48 ARTICLE III CONDITIONS
PRECEDENT                                                             49  
Section 3.01 Conditions Precedent to Effectiveness 49   Section 3.02 Conditions
Precedent to Each Borrowing 51   Section 3.03 Determinations Under 52

ARTICLE IV REPRESENTATIONS AND WARRANTIES                                    52

  Section 4.01 Existence 52   Section 4.02 Power 52   Section 4.03 Authorization
and Approvals 53   Section 4.04 Enforceable Obligations 53   Section 4.05
Financial Statements 53   Section 4.06 True and Complete Disclosure 53   Section
4.07 Litigation; Compliance with Laws 54   Section 4.08 Use of Proceeds 54  
Section 4.09 Investment Company Act 54   Section 4.10 Public Utility Holding
Company Act 54   Section 4.11 Taxes 54   Section 4.12 Pension Plans 55   Section
4.13 Condition of Property; Casualties 55   Section 4.14 Insurance 56   Section
4.15

No Burdensome Restrictions; No Defaults

56   Section 4.16 Environmental Condition 56   Section 4.17 Title to Property,
Etc 57   Section 4.18 Security Interests 57   Section 4.19 Subsidiaries;
Corporate Structure 57   Section 4.20 Citizenship 57   Section 4.21 Labor
Relations 58   Section 4.22 Intellectual Property 58   Section 4.23 Solvency 58
ARTICLE V AFFIRMATIVE
COVENANTS                                                            59  
Section 5.01 Compliance with Laws, Etc 59   Section 5.02 Maintenance of
Insurance 59   Section 5.03 Preservation of Existence, Etc 63   Section 5.04
Payment of Taxes, Etc 63   Section 5.05 Reporting Requirements 63   Section 5.06
Maintenance of Property 67   Section 5.07 Inspection 67   Section 5.08 Use of
Proceeds 67   Section 5.09 Nature of Business 67   Section 5.10 Books and
Records 67   Section 5.11 New Subsidiaries 67   Section 5.12 New Vessels 68  
Section 5.13 Operation of Mortgaged Vessels 69   Section 5.14 Appraisal Reports
70   Section 5.15 Further Assurances in General 71   Section 5.16 Post-Closing
Requirements 71 ARTICLE VI NEGATIVE
COVENANTS                                                                  73  
Section 6.01 Liens, Etc. 73   Section 6.02 Debts, Guaranties and Other
Obligations 75   Section 6.03 Merger or Consolidation; Asset Sales 76   Section
6.04 Investments 78   Section 6.05 Transactions With Affiliates. 78   Section
6.06 Compliance with ERISA. 78   Section 6.07 Restricted Payments 79   Section
6.08 Maintenance of Ownership of Subsidiaries 79   Section 6.09 Agreements
Restricting Liens and Distributions 79   Section 6.10 Other Debt 79   Section
6.11 Limitation on Changes in Fiscal Periods 79   Section 6.12 Mortgaged Vessels
80   Section 6.13 Leverage Ratio 81   Section 6.14 Minimum Net Worth 81  
Section 6.15 Minimum Interest Coverage Ratio 81   Section 6.16 Minimum
Consolidated EBITDA 82   Section 6.17 Capital Expenditures 82   Section 6.18
Acquisitions 82   Section 6.19 Collateral Coverage Test 83 ARTICLE VII
REMEDIES                                                                                        
83   Section 7.01 Events of Default 83   Section 7.02 Optional Acceleration of
Maturity 85   Section 7.03 Automatic Acceleration of Maturity 85   Section 7.04
Non-Exclusivity of Remedies 86   Section 7.05 Right of Set off 86   Section 7.06
Application of Proceeds 86

ARTICLE VIII THE ADMINISTRATIVE AGENT, COLLATERAL

MONITORING AGENT AND THE ISSUING
BANK                                             87

  Section 8.01 Appointment; Nature of Relationship 87   Section 8.02  Powers 88
  Section 8.03 General Immunity 88   Section 8.04 No Responsibility for Loans,
Recitals, etc 88   Section 8.05 Action on Instructions of Lenders 89   Section
8.06 Employment of Agents and Counsel 89   Section 8.07 Reliance on Documents;
Counsel 89   Section 8.08 Reimbursement and Indemnification 89   Section 8.09
Notice of Default 90   Section 8.10 Rights as a Lender 90   Section 8.11 Lender
Credit Decision 91   Section 8.12 Successor Administrative Agent, Collateral
Monitoring Agent and Issuing Bank 91   Section 8.13 Other Titles 92   Section
8.14 Collateral Matters 92 ARTICLE IX BENEFIT OF AGREEMENT;

ASSIGNMENTS;
PARTICIPATIONS                                                                      
93

  Section 9.01 Successors and Assigns 93   Section 9.02 Participations 94  
Section 9.03 Assignments 95   Section 9.04 Dissemination of Information 96  
Section 9.05  Tax Treatment 96   Section 9.06 Registered Notes 96 ARTICLE X
AMENDMENT AND RESTATEMENT                                             97

Section 10.01

Original Credit Agreement 97 Section 10.02  Acknowledgment of Obligations;
Affirmation of Liens 97 Section 10.03 Limitations 97 ARTICLE XI
MISCELLANEOUS                                                                            
97 Section 11.01  Amendments, Etc 97 Section 11.02  Notices, Etc 98 Section
11.03 No Waiver; Remedies 98 Section 11.04 Costs and Expenses 98 Section 11.05
Binding Effect 99 Section 11.06 Indemnification 99 Section 11.07 Execution in
Counterparts 100 Section 11.08 Survival of Representations, Etc 100 Section
11.09 Severability 100 Section 11.10 Usury Not Intended 100 Section 11.11
Judgment Currency 101 Section 11.12 Forbearance Agreements 101 Section 11.13
Governing Law 101 Section 11.14 Consent to Jurisdiction; Process Agent 101
Section 11.15 Waiver of Jury 102 Section 11.16 USA Patriot Act Notification

102

 

 

EXHIBITS:           Exhibit A - Form of Assignment and Acceptance Exhibit B -
Form of Compliance Certificate Exhibit C - Form of Guaranty Exhibit D - Form of
Vessel Mortgage Exhibit E - Form of Notice of Borrowing Exhibit F - Form of
Notice of Conversion or Continuation Exhibit G - Form of Pledge Agreement
Exhibit H-1 - Form of Revolving Note (Company) Exhibit H-2 - Form of Revolving
Note (Mexican Borrower) Exhibit I - Form of Security Agreement Exhibit J - Form
of Swingline Note Exhibit K - Form of Mortgage

 

SCHEDULES:           Schedule A - Cayman Guarantors Schedule 1 - Notice
Information for Lenders Schedule 1.01 (a) - Permitted Bonds Obligations Schedule
1.01 (b) - Revolving Commitments Schedule 1.01 (c) - List of Guaranties Schedule
1.01 (d) - List of Pledge Agreements Schedule 2.16 (a) - Cash Management Banks
Schedule 4.16 - Environmental Disclosures Schedule 4.17 - Mortgaged Vessels and
Mortgaged Real Estate Schedule 4.19 - Subsidiaries/Corporate Structure Schedule
6.01 - Existing Liens Schedule 6.02 - Existing Debt

AMENDED AND RESTATED CREDIT AGREEMENT

        This Amended and Restated Credit Agreement dated as of August 6, 2004,
is among (a) Global Industries, Ltd., a Louisiana corporation (the "Company"),
and Global Offshore Mexico, S. de R.L. de C.V., a Mexican sociedad de
responsabilidad limitada de capital variable (the "Mexican Borrower", and
together with the Company, the "Borrowers"), (b) the Lenders (as defined below),
(c) Calyon New York Branch (formerly known as Credit Lyonnais New York Branch),
as Administrative Agent (as defined below) for the Lenders, and (d) Wells Fargo
Foothill, Inc., a California corporation, as Collateral Monitoring Agent (as
defined below).

        Reference is made to the Credit Agreement dated as of March 9, 2004 (the
"Original Credit Agreement") executed among the Borrowers, certain of the
Lenders, and the Administrative Agent, pursuant to which the Lenders parties
thereto agreed to make available to the Borrowers a revolving credit facility
for loans and letters of credit upon the terms and conditions set forth therein
and in the other Credit Documents (as defined therein).

        The parties to the Original Credit Agreement desire to amend the terms
of the Original Credit Agreement and add additional Lenders, and for the sake of
clarity only, have decided to amend and restate the Original Credit Agreement in
its entirety as set forth herein.

        The Borrowers, the Lenders, and the Agents (as defined below) agree as
follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

    Section 1.01    Certain Defined Terms. Any capitalized terms used in this
Agreement that are defined in Article 9 of the UCC (as defined below) shall have
the meanings assigned to those terms by the UCC as of the date of this
Agreement. As used in this Agreement, the terms defined above shall have the
meanings set forth above and the following terms shall have the following
meanings (unless otherwise indicated, such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

    "Acceptable Security Interest" in any Property means a Lien (a) which exists
in favor of the Administrative Agent for the benefit of the Lenders; (b) which
is superior to all other Liens except Permitted Prior Liens; (c) which secures
the Obligations of (i) in the case of Global Collateral, the Loan Parties and
(ii) in the case of Mexican Collateral, the Mexican Subsidiaries; and (d) which
is perfected and enforceable against all Persons in preference to any rights of
any Person therein (other than rights in respect of Permitted Prior
Liens).       

    "Acquisition" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Company or any of its
Subsidiaries (i) acquires from a third party that is not a Subsidiary any going
concern business or all or substantially all of the assets of any Person that is
not a Subsidiary, or division thereof, whether through purchase of assets,
merger or otherwise or (ii) directly or indirectly acquires from a third party
that is not a Subsidiary (in one transaction or as the most recent transaction
in a series of transactions) at least a majority (in number of votes) of the
securities of a corporation that is not a Subsidiary which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a Person other than a
corporation that is not a Subsidiary.

    "Administrative Agent" means Calyon in its capacity as contractual
representative of the Lenders pursuant to Article VIII, and not in its
individual capacity as a Lender, and any successor administrative agent pursuant
to Section 8.12.

    "Administrative Agent's Account" means the Deposit Account of Administrative
Agent established in accordance with Sections 2.16 and 5.16(b)(ii).

    "Advance" means a Revolving Advance or a Swingline Advance and "Advances"
means the Revolving Advances and the Swingline Advances collectively.

    "Affiliate" of any Person means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise. Without limiting
the generality of the foregoing, a Person shall be deemed to be controlled by
another Person if such other Person possesses, directly or indirectly, the power
to vote 10% or more of the securities having ordinary voting power for the
election of directors, managing general partners or the equivalent.

    "Agents" means the Administrative Agent and Collateral Monitoring Agent.

    "Agreed Currencies" means (i) Dollars, (ii) so long as such currencies
remain Eligible Currencies, Australian Dollars, British Pounds Sterling,
Canadian Dollars, Japanese Yen, Malaysian Ringgit, Thai Baht and the Euro, and
(iii) any other Eligible Currency which a Borrower requests the Administrative
Agent to include as an Agreed Currency hereunder and which is acceptable to all
of the Lenders. For the purposes of this definition, each of the specific
currencies referred to in clause (ii) above, shall mean and be deemed to refer
to the lawful currency of the jurisdiction referred to in connection with such
currency, e.g. "Australian Dollars" means the lawful currency of Australia.

    "Agreement" means this Amended and Restated Credit Agreement dated August 6,
2004 among the Borrowers, the Lenders, and the Agents, as it may be amended or
modified and in effect from time to time.

    "Alternate Base Rate" means, for any day, a fluctuating rate of interest per
annum equal to the higher of (a) the Prime Rate in effect for such day and (b)
the sum of the Federal Funds Rate in effect for such day plus ½ of 1% per annum.

    "Applicable Lending Office" means, with respect to any Lender, the office,
branch, subsidiary,affiliate or correspondent bank of such Lender listed on
Schedule 1 or such other office, branch, subsidiary, affiliate or correspondent
bank as such Lender may from time to time specify to the Company and the
Administrative Agent from time to time.

    "Applicable Margin" means, at any time with respect to each Type of Advance,
each category of Letter of Credit, and the Revolving Commitment Fee, the
percentage rate per annum as set forth below for the Level in effect at such
time:

 

LEVEL
I

LEVEL
II

LEVEL
III

LEVEL
IV

LEVEL
V

LEVEL
VI

LEVEL
VII

Eurodollar Advances and Letter of Credit Fee

4.00%

3.75%

3.50%

3.25%

3.00%

2.75%

2.50%

Base Rate Advances

3.00%

2.75%

2.50%

2.25%

2.00%

1.75%

1.50%

Revolving Commitment Fee

0.80%

0.75%

0.70%

0.65%

0.60%

0.55%

0.50%

    "Appraisal Report" means the appraisal reports delivered pursuant to Section
5.14.

    "Arranger" means Calyon Securities formerly known as Credit Lyonnais
Securities.

    "Assignment and Acceptance" has the meaning set forth in Section 9.03(a).

    "Base Rate Advance" means an Advance in Dollars which bears interest as
provided in Section 2.06(a).

    "Bonds" mean any surety agreements, undertakings or instruments of guarantee
signed by a bonding company or other surety on behalf of any Loan Party.

   "Borrowing" means a Revolving Borrowing, a Swingline Borrowing or a Mandatory
Revolving Borrowing.

    "Borrowing Date" means a date on which any Advance is made hereunder.    

    "Business Day" means, (a) with respect to any Borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York for the conduct of substantially all
of their commercial lending activities and on which dealings in Dollars are
carried on in the London interbank market and (b) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in New York
for the conduct of substantially all of their commercial lending activities.

    "Calyon" means Calyon New York Branch (formerly known as Credit Lyonnais New
York Branch).

    "Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
asset on a consolidated balance sheet of the Company and its Subsidiaries
prepared in accordance with GAAP, but excluding any capital expenditures
required under Section 6.03(b)(iii) hereof.

    "Capitalized Lease" of a Person means any lease of any Property by such
Person as lessee which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.

    "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

    "Cash Collateral Account" means a special cash collateral account pledged to
the Administrative Agent containing cash deposited pursuant to Sections 2.15(e),
2.15(h), 7.02(b) or 7.03(b) to be maintained with the Administrative Agent in
accordance with Section 2.15(g).

    "Cash Dominion Event" means the earlier to occur of (a) a written notice of
a Default to the Company from the Administrative Agent or any Lender or the
occurrence of an Event of Default or (b) Excess Availability is less than
$10,000,000.

    "Cash Management Account" has the meaning set forth in Section 2.16(a).

    "Cash Management Agreement" has the meaning set forth in Section 2.16(b).

    "Cash Management Bank" has the meaning set forth in Section 2.16(a).

    "Casualty Event" means, with respect to any Mortgaged Vessel, any accident,
occurrence, event or any condemnation or taking resulting in the loss of or to,
or any damage to, any Mortgaged Vessel or any of its equipment.

    "Cayman Guarantors" means the entities listed on Schedule A hereto.

    "CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.

    "Change in Control" means (a) the direct or indirect acquisition after the
Closing Date by any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934), or related persons
constituting a group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934) other than a Permitted Holder (as defined below), of
beneficial ownership of issued and outstanding shares of voting stock of the
Company, the result of which acquisition is that such person or such group
possesses in excess of 35% of the combined voting power of all then-issued and
outstanding voting stock of the Company or (b) during any period of 12
consecutive months, beginning with and after the Closing Date, individuals who
at the beginning of such 12-month period were directors of the Company (together
with new directors elected by, or nominated for election by, such directors or
directors elected under this parenthetical clause) shall cease for any reason to
constitute a majority of the board of directors of the Company at any time
during such period. A "Permitted Holder" is (i) William Doré, (ii) any trust,
corporation, partnership or other entity, 80% or more of the controlling
interest of which is held by William Doré, (iii) Kay Doré, former spouse of
William Doré, or (iv) any Person related to William Doré, his spouse or Kay
Doré, former spouse of William Doré, either as a direct-line descendant or
ancestor or as a relative with ancestors in common (adopted persons shall be
considered the natural born children of their adoptive parents), in each case to
whom such individual has transferred capital stock of the Borrower.

    "Class" has the meaning set forth in Section 1.04.

    "Closing Date" means the date on which this Agreement becomes effective in
accordance with the provisions of Section 3.01, and the Administrative Agent
confirms the same in writing to the Borrowers and the Lenders.

    "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

    "Collateral" means the Global Collateral and the Mexican Collateral.

    "Collateral Coverage Amount" means:

    (a) an amount equal to the lesser of:

        (i) (A) the aggregate Orderly Liquidation Value of all Eligible
Mortgaged Vessels as determined by the most recent Appraisal Report delivered to
Administrative Agent and the Lenders pursuant to Section 5.14 (provided,
however, that for the time period beginning on the Closing Date and ending on
the date of the first such Appraisal Report delivered pursuant to Section 5.14,
the aggregate Orderly Liquidation Value of all Eligible Mortgaged Vessels shall
be deemed to be $276,940,000), divided by (B) 1.4,

                                or

        (ii) (A) the sum of (1) the aggregate Orderly Liquidation Value of all
Eligible Mortgaged Vessels as determined by the most recent Appraisal Report
delivered to Administrative Agent and the Lenders pursuant to Section 5.14, and
(2) the fair market value (as set forth in the most recent appraisal delivered
to Collateral Monitoring Agent) of Eligible Real Property divided by (B) 2;

                                minus

    (b) the aggregate amount of all reserves, if any, established by Collateral
Monitoring Agent under Section 2.01(b).

    "Collateral Shortfall Amount" means the amount of Letter of Credit
Obligations at such time, less the amount on deposit in the Cash Collateral
Account at such time which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations.

    "Collateral Monitoring Agent" means Wells Fargo Foothill, Inc., a California
corporation its capacity as contractual representative of the Lenders pursuant
to Article VIII, and not in its individual capacity as a Lender, and any
successor collateral monitoring agent pursuant to Section 8.12.

    "Collections" means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

    "Confidential Information Memorandum" means the Confidential Information
Memorandum dated March 2004 (together with all amendments and supplements
thereto) and furnished to the Lenders in connection with the syndication of the
Revolving Commitments hereunder.

    "Commitments" means (a) as to any Lender, its Revolving Commitment, and (b)
as to the Swingline Bank, its Swingline Commitment.

    "Compliance Certificate" means a Compliance Certificate signed by a
Responsible Officer of the Company in substantially the form of the attached
Exhibit B.

     "Computation Date" has the meaning set forth in Section 2.15(h).

   "Consolidated Debt" means all Debt of the Company and its Subsidiaries
calculated on a consolidated basis at any time.   

    "Consolidated EBITDA" means, for any Person and its Subsidiaries calculated
on a consolidated basis for any period:   

    (a) Consolidated Net Income for such period plus   

    (b) to the extent deducted in determining Consolidated Net Income, (i)
Consolidated Interest Expense, (ii) foreign, federal, state, and local taxes on
Net Income net of credits, (iii) depreciation expense, (iv) amortization
expense, (v) non-operating, non-cash charges, (vi) fees and expenses incurred in
connection with this Agreement, (vii) losses in the equity of the Company's
former unconsolidated subsidiary, CCC Fabricaciones y Construcciones S.A. de
C.V., and (viii) up to $40,000,000.00 of costs and expenses incurred by the
Company in connection with the GTM Settlement minus

    (c) to the extent included in determining Consolidated Net Income,
extraordinary non-operating gains, non-cash charges related to the impairment of
assets and other gains or losses in connection with the sale or disposal of
assets, each net of related income taxes, all determined in accordance with
GAAP.

    "Consolidated Interest Expense" means, for any Person and its Subsidiaries
calculated on a consolidated basis for any period, without duplication, the sum
of (a) interest expense, including the interest component of Capitalized Leases
and the net amount payable under any Rate Hedging Agreement, (b) the interest
component of Synthetic Leases, (c) commitment, facility, usage and similar fees
payable in connection with any Debt, and (d) letter of credit fees for Financial
Letters of Credit, all determined in accordance with GAAP.

    "Consolidated Net Income" means, for any Person and its Subsidiaries
calculated on a consolidated basis for any period, net income after taxes for
such period, as determined in accordance with GAAP.

    "Consolidated Net Worth" means, for the Company and its Subsidiaries
calculated on a consolidated basis at any time, all amounts which would be
included under shareholders' equity.

    "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.

    "Continue", "Continuation", and "Continued" each refers to a continuation of
Advances for an additional Interest Period upon the expiration of the Interest
Period then in effect for such Advances.

    "Control Agreement" means a control agreement, in form and substance
satisfactory to Agents, executed by and among the Company or one of its Domestic
Subsidiaries which is a Guarantor or any Cayman Guarantor, the Agents, and the
applicable securities intermediary (with respect to a Securities Account) or
bank (with respect to a Deposit Account).

    "Control Percentage" means, with respect to any Person, the percentage of
the outstanding capital stock (or other ownership interests and including any
options, warrants or similar rights to purchase such capital stock) of such
Person having ordinary voting power which gives the direct or indirect holder of
such stock or ownership interests the power to elect a majority of the Board of
Directors (or other applicable governing body) of such Person.

    "Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades (whether or not incorporated) under
common control which, together with the Company or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.

    "Convert", "Conversion", and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.02(b).

    "Credit Documents" means this Agreement, the Notes, the Guaranties, the
Letter of Credit Documents, the Security Documents, any Financial Contracts
between the Company or any of its Subsidiaries and any Lender or any Affiliate
of any Lender and each other agreement, instrument or document executed by the
Company, any of its Subsidiaries or any of its officers at any time in
connection with this Agreement.

    "Debt," for any Person, means without duplication:       

          (a) indebtedness of such Person for borrowed money;       

        (b) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;

          (c) obligations of such Person to pay the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade);

            (d) Capitalized Lease Obligations;

           (e) all obligations of such Person in respect of letters of credit,
bank guarantees or similar instruments which are issued upon the application of
such Person or upon which such Person is an account party or for which such
Person is in any way liable;

             (f) all obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property;

              (g) Net Mark-to-Market Exposure of Financial Contracts;

              (h) Synthetic Lease Obligations;                

              (i) Sale and Leaseback Transactions;

             (j) indebtedness or obligations of others, whether or not assumed,
secured by Liens or payable out of the proceeds or production from Property on
or in respect of any Property now or hereafter owned or acquired by such Person,
the amount of such Debt being deemed to be the lesser of the value of such
Property and the amount of the obligation so secured;

               (k) Contingent Obligations in respect of the Debt of another
Person referred to in clauses (a) through (i) of this definition; and

               (l) the incurrence of withdrawal liability under Title IV of
ERISA by such person or a "commonly controlled entity" with respect to a
Multiemployer Plan and Unfunded Liabilities.

    "Debt Incurrence" means any issuance for cash or Liquid Investments by the
Company or any of its Subsidiaries of any Debt after the Closing Date not
permitted pursuant to Section 6.02.

    "Debt Incurrence Proceeds" means, with respect to any Debt Incurrence, all
cash and Liquid Investments received by the Company or any of its Subsidiaries
from such Debt Incurrence after payment of, or provision for, all brokerage
commissions and other reasonable out-of-pocket fees and expenses actually
incurred.

    "Default" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.

    "Deposit Account" means any deposit account (as that term is defined in the
UCC).

    "Documentary Letter of Credit" means a letter of credit qualifying as a
"commercial letter of credit" under 12 CFR Part 3, Appendix A, Section 3(b)(3)
or any successor U.S. Comptroller of the Currency regulation.

    "Dollars" and "$" means the lawful money of the United States of America.

    "Dollar Amount" of any currency at any date shall mean (a) the amount of
such currency if such currency is Dollars or (b) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, in each case on or
as of the most recent Computation Date.

    "Domestic Subsidiary" means each Subsidiary of the Company organized in a
state, province, or territory of the United States of America.

    "Eligible Currency" means any currency other than Dollars (a) that is
readily available, (b) that is freely traded, (c) in which deposits are
customarily offered to banks in the London interbank market, (d) which is
convertible into Dollars in the international interbank market, and (e) as to
which an Equivalent Amount may be readily calculated. If, after the designation
by the Lenders of any currency as an Agreed Currency, (i) currency control or
other exchange regulations are imposed in the country in which such currency is
issued with the result that different types of such currency are introduced,
(ii) such currency is, in the determination of the Administrative Agent, no
longer readily available or freely traded, or (iii) in the determination of the
Administrative Agent, an Equivalent Amount of such currency is not readily
calculable, the Administrative Agent shall promptly notify the Lenders and the
Company, and such currency shall no longer be an Agreed Currency until such time
as all of the Lenders agree to reinstate such currency as an Agreed Currency.

    "Eligible Mortgaged Vessels" means any of the Mortgaged Vessels that (i) are
flagged in the United States, Vanuatu, and Panama, (ii) are owned by a Borrower
or Guarantor, and (iii) have, in full force and effect, all certificates and
permits required by all applicable Governmental Authorities for the operation,
charter and employment of such Mortgaged Vessels.

    "Eligible Real Property" means the real property located at Carlyss,
Louisiana, provided such real property is subject to a Mortgage.

    "Environment" or "Environmental" shall have the meanings set forth in 43
U.S.C. § 9601(8) (1988).

    "Environmental Claim" means any third party (including any governmental
agency or employee) action, lawsuit, claim, regulatory action or proceeding,
order, decree, consent agreement or notice of potential or actual responsibility
or violation which seeks to impose liability under any Environmental Law.

    "Environmental Law" means all Legal Requirements relating to protection of
the Environment, including without limitation CERCLA, the Submerged Lands Act,
the Outer Continental Shelf Lands Act, the Federal Water Pollution Control Act
of 1972, the Oil Pollution Act of 1990, and the Act to Prevent Pollution from
Ships relating to (a) pollution, contamination, injury, destruction, loss,
protection, cleanup, reclamation or restoration of the air, surface water,
groundwater, land surface or subsurface strata, or other natural resources; (b)
solid, gaseous or liquid waste generation, treatment, processing, recycling,
reclamation, cleanup, storage, disposal or transportation; (c) exposure to
pollutants or contaminants or to hazardous or toxic substances, materials or
wastes; or (d) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of hazardous or toxic
substances, materials or wastes.

    "Environmental Permit" means any permit, license, order, approval,
registration or other authorization required under Environmental Law.

    "Equity Issuance" means any issuance of equity securities (including any
preferred equity securities) by the Company or any of its Subsidiaries other
than equity securities issued (a) to the Company or one of its Subsidiaries; (b)
pursuant to employee or director and officer benefit or dividend reinvestment
plans or stock option or purchaser plans in the ordinary course of business; and
(c) as consideration in connection with any investment by the Company or any of
its Subsidiaries in any other Person pursuant to which such Person shall become
a Subsidiary or shall be merged into or consolidated with the Company or any of
its Subsidiaries.

    "Equity Issuance Proceeds" means, with respect to any Equity Issuance, all
cash and Liquid Investments received by the Company or any of its Subsidiaries
from such Equity Issuance after payment of, or provision for, all brokerage
commissions and other reasonable out-of-pocket fees and expenses actually
incurred.

    "Equivalent Amount" of any currency with respect to any amount of Dollars at
any date shall mean the amount of such currency that would be obtained from
exchanging such amount of Dollars for such other currency, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of the
Administrative Agent for such currency in the London foreign exchange market at
approximately 11:00 a.m. (London, England time) as of such date.

    "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

    "Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D.     

    "Eurodollar Advance" means an Advance which bears interest based on the
Eurodollar Reference Rate.

    "Eurodollar Rate Reserve Percentage" of any Lender for the Interest Period
for any Eurodollar Advance in Dollars means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.

    "Eurodollar Reference Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable London interbank offered rate for
deposits in Dollars appearing on Dow Jones Markets (Telerate) Page 3750 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;
provided that, if Dow Jones Markets (Telerate) Page 3750 is not available for
any reason, the Eurodollar Reference Rate for the relevant Interest Period shall
instead be the London interbank offered rate for deposits in Dollars 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.

    "Events of Default" has the meaning set forth in Section 7.01.

    "Excess Availability" means, as of any date of determination, (a) the amount
equal to the amount that Borrowers are entitled to borrow as Revolving Advances
hereunder (after giving effect to all then outstanding Obligations and all
sublimits and reserves then applicable hereunder) plus (b) Qualified Cash minus
(c) the aggregate amount, if any, of all trade payables of Borrowers and their
Subsidiaries over 60 days past due unless such trade payables are being
contested in good faith and by appropriate proceedings and after adequate
reserves have been provided therefor and all book overdrafts of Borrowers and
their Subsidiaries.

    "Existing Lenders" means the Lenders party to the Original Credit Agreement.

    "Federal Funds Effective Rate" means, for any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 11:00 a.m.
(New York time) on such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

    "Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any of its successors.

    "Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (b) any Rate Hedging Agreement.

    "Financial Contract Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
Financial Contracts, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Financial Contract.

    "Financial Letter of Credit" means a letter of credit qualifying as a
"financial guarantee-type letter of credit" under 12 CFR Part 3, Appendix A,
Section 4(a)(8) or any successor U.S. Comptroller of the Currency regulation.

    "Financial Statements" means the audited consolidated balance sheet of the
Company and its consolidated Subsidiaries for each of the fiscal years ending
December 31, 2001, December 31, 2002, and December 31, 2003, and the related
consolidated statements of operations, comprehensive income, cash flows, and
shareholders' equity of the Company and its consolidated Subsidiaries for each
of the twelve month periods then ended.

    "Foreign Subsidiary" means any Subsidiary of the Company organized in a
jurisdiction other than a state, province or territory of the United States.

    "Fund," "Trust Fund," or "Superfund" means the Hazardous Substance Response
Trust Fund, established pursuant to 42 U.S.C. § 9631 (1988) and the Post-closure
Liability Trust Fund, established pursuant to 42 U.S.C. § 9641 (1988), which
statutory provisions have been amended or repealed by the Superfunds Amendments
and Reauthorization Act of 1986, and the "Fund," "Trust Fund," or "Superfund"
that are now maintained pursuant to § 9507 of the Code.

    "GAAP" means with respect to any financial statements of the Company or any
of its Subsidiaries, or calculations related to such financial statements of the
Company or any of its Subsidiaries, United States generally accepted accounting
principles as in effect from time to time applied on a basis consistent with the
requirements of Section 1.03.

    "Global Collateral" means (a) all Mortgaged Vessels, the Collateral (as
defined in the Mortgages), the Collateral (as defined in the Security
Agreements), and the Pledged Collateral (as defined in the Pledge Agreements),
in each case to the extent securing the Obligations of each Loan Party and (b)
all amounts contained in the Cash Collateral Account. Global Collateral shall
not include the MARAD Collateral.

    "Global Guarantors" means the parties listed as Global Guarantors on
Schedule 1.01(c).

    "Global Guaranty" means the guaranty executed by each Global Guarantor in
favor of the Administrative Agent for the ratable benefit of the Lenders
guaranteeing the Obligations of the Loan Parties, as it may be amended or
modified and in effect from time to time, in substantially the form of the
attached Exhibit C.

    "Governmental Authority" means, as to any Person in connection with any
subject, any foreign, supranational, national, state or provincial governmental
authority, or any political subdivision of any state thereof, or any agency,
department, commission, board, authority or instrumentality, bureau or court, in
each case having jurisdiction over such Person or such Person's Property in
connection with such subject.

    "Governmental Proceedings" means any action or proceedings by or before any
Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.

    "GTM Settlement" means the settlement between the Company and Groupe GTM
(now Vinci) for an amount not exceeding $40,000,000.00.

    "Guaranty" means a Global Guaranty or a Mexican Guaranty.

    "Guarantor" means a Global Guarantor, a Mexican Guarantor, or each Material
Domestic Subsidiary of a Borrower that becomes a guarantor of all or a portion
of the Obligations in accordance with Section 5.11.

    "Hazardous Substance" means the substances identified as such pursuant to
CERCLA and any chemicals regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum or petroleum products
Released into the Environment, radionuclides and radioactive materials.

    "Hazardous Waste" means the substances regulated as such pursuant to any
Environmental Law.

    "Initial Mortgaged Vessels" means each of the Vessels listed on the attached
Schedule 4.17.

    "Insurance Policies" includes (a) all insurances (including, without
limitation, all certificates of entry in protection and indemnity and war risks
associations or clubs) in respect of the Collateral, whether heretofore, now or
hereafter effected, and all renewals of or replacements for the same, (b) all
claims, returns of premium and other moneys and claims for moneys due and to
become due under or in respect of said insurances, and (c) all other rights of
each owner of Collateral under or in respect of said insurances.

    "Interest Coverage Ratio" means, for the Company and its Subsidiaries on a
consolidated basis, as of the end of any fiscal quarter, for the then
most-recently ended four fiscal quarters, the ratio of (a) the Company's
Consolidated EBITDA to (b) the Company's Consolidated Interest Expense.

    "Interest Period" means, for each Eurodollar Advance comprising part of the
same Borrowing, the period commencing on the date of such Advance or the date of
the Conversion of any existing Advance into such an Advance and ending on the
last day of the period selected by a Borrower pursuant to the provisions below
and Section 2.02 and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by a Borrower pursuant to the provisions below and Section
2.02. The duration of each such Interest Period shall be one, two, three, or six
months (or such other period that is acceptable to the Lenders), in each case as
the relevant Borrower may select; provided, however, that:

        (a) Interest Periods commencing on the same date for Advances by each
Lender comprising part of the same Borrowing shall be of the same duration;

        (b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;

        (c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month;

        (d) no Borrower may select any Interest Period for any Revolving Advance
which ends after the Maturity Date; and

        (e) at the Administrative Agent's sole discretion, a Borrower may not
select any Interest Period for any Eurodollar Advance longer than 14 days until
the earlier to occur of (i) 90 days following the Closing Date, and (ii) the
satisfactory completion of the syndication of this Agreement by the Arranger.

    "Issuing Bank" means Calyon, any Lender that agrees to become an Issuing
Bank with the consent of the Administrative Agent (such consent to not be
unreasonably withheld), and any successor issuing bank pursuant to Section 8.12.

    "Legal Requirement" means, as to any Person, any law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or official
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority which is applicable to such Person.

    "Lenders" means the lenders listed on the signature pages of this Agreement
and each Purchaser that shall become a party to this Agreement pursuant to
Article IX.

    "Letter of Credit" means (a) a Documentary Letter of Credit, Financial
Letter of Credit, or Performance Letter of Credit or (b) if an Issuing Bank in
such Issuing Bank's sole reasonable discretion determines that it is able to
issue a bank guaranty, a bank guaranty which guarantees obligations not covered
by a Letter of Credit, in each case issued under the Revolving Commitments and
subject to this Agreement.

    "Letter of Credit Documents" means, with respect to any Letter of Credit,
such Letter of Credit and any agreements, documents, and instruments entered
into in connection with or relating to such Letter of Credit.

    "Letter of Credit Exposure" means, at any time, the sum of (a) the Dollar
Amount of the aggregate undrawn maximum face amount of each Letter of Credit at
such time and (b) the Dollar Amount of the aggregate unpaid amount of all
Reimbursement Obligations owing with respect to such Letters of Credit at such
time minus the Dollar Amount of any cash collateral held by the Administrative
Agent in the Cash Collateral Account at such time.

    "Letter of Credit Obligations" means any obligations of the Borrowers under
this Agreement in connection with the Letters of Credit.

    "Level I, Level II, Level III, Level IV, Level V, Level VI and Level VII"
and individually, a "Level," shall mean the applicable Leverage Ratio set forth
below:

 

Level

Leverage Ratio

 

Level I

≥ 4.00

 

Level II

≥ 3.50 and < 4.00

 

Level III

≥ 3.00 and < 3.50

 

Level IV

≥ 2.50 and < 3.00

 

Level V

≥ 2.00 and < 2.50

 

Level VI

≥ 1.50 and < 2.00

 

Level VII

< 1.50

For purposes of determining the Applicable Margin applicable from time-to-time
under this Agreement, the Leverage Ratio (and corresponding Level) shall be
determined from the financial statements of the Company and its Subsidiaries
most recently delivered pursuant to Section 5.05 and certified to Administrative
Agent and the Lenders in the Compliance Certificate required to be delivered by
the Company in connection with such financial statements pursuant to Section
5.05(d). Any change in the Applicable Margin shall be effective on the fifth
Business Day occurring after the date of receipt by the Administrative Agent of
the financial statements pursuant to Section 5.05. If at any time the Company
fails to deliver such financial statements and Compliance Certificate within the
times specified in Section 5.05, Level I shall be deemed to be in effect until
the fifth Business Day after the Administrative Agent receives such financial
statements.

    "Leverage Ratio" means, as of the last day of any fiscal quarter of the
Company, the ratio of (a) Consolidated Debt (excluding surety bonds, Performance
Letters of Credit or Documentary Letters of Credit) as of such day to (b) the
Company's Consolidated EBITDA for the four fiscal quarters then ended. For
purposes of the calculation of the Leverage Ratio in determining compliance with
Section 6.13, "Consolidated Debt" shall also exclude MARAD Financing.

    "Lien" means any mortgage, lien (statutory or other), pledge, assignment,
charge, deed of trust, security interest, hypothecation, preference, deposit
arrangement, encumbrance, priority or other security arrangement or preferential
arrangement of any kind or nature whatsoever to secure or provide for the
payment of any obligation of any Person, whether arising by contract, operation
of law or otherwise (including, without limitation, the interest of a vendor or
lessor under any conditional sale agreement, synthetic lease, Capitalized Lease
or other title retention agreement).

    "Liquid Investments" means:

        (a) short-term obligations of, or obligations the principal of and
interest on which are unconditionally and fully guaranteed by, the United States
of America;

        (b) commercial paper rated "A-1" (or the then equivalent) or better by
the rating service of Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. or "P-1" (or the then equivalent) or better by the
rating service of Moody's Investors Service, Inc. or upon the discontinuance of
both of such services, such other nationally recognized rating service or
services, as the case may be, as shall be selected by the Administrative Agent
with the consent of the Majority Lenders;

        (c) demand deposit accounts maintained in the ordinary course of
business;

        (d) certificates of deposit issued by and time deposits with commercial
banks (whether domestic or foreign) having capital and surplus in excess of
$100,000,000.00 (or the Equivalent Amount if denominated in a currency other
than Dollars); provided in each case that the same provides for payment of both
principal and interest (and not principal alone or interest alone) and is not
subject to any contingency regarding the payment of principal or interest; and

        (e) such other instruments (within the meaning of Article 9 of the
Uniform Commercial Code as adopted in the State of New York on, before, or after
the Closing Date) as the Company may request and the Administrative Agent may
approve in writing, which approval will not be unreasonably withheld.

    "Loan Party" means each Borrower, each Guarantor, and each of the Company's
other Subsidiaries executing a Credit Document.

    "Majority Lenders" means, at any time, (a) before the Revolving Commitments
terminate, Lenders holding at least 65% of the then aggregate Revolving
Commitments and (b) thereafter, Lenders having at least 65% of the aggregate
unpaid principal amount of the Notes and participation interests in the Letter
of Credit Exposure at such time.

    "Mandatory Revolving Borrowing" means a Revolving Borrowing comprised of
Base Rate Advances made to repay a Swingline Advance which has not been repaid
to the Swingline Bank on the date due.

    "MARAD" means the Maritime Administration, United States of America.

    "MARAD Collateral" means the MARAD Vessels, additions and accessions
thereto, inventory relating thereto, improvements thereof, all reserve and
construction funds associated with any MARAD Financing and money and other
instruments therein, MARAD Revenues, insurance and proceeds from insurance in
respect of such property, and proceeds of any of the foregoing.

    "MARAD Financing" means any debt obligations of the Company or its
Subsidiaries for the purpose of financing or refinancing vessels which, pursuant
to Title XI of the Merchant Marine Act of 1936, as amended, is secured by a full
faith and credit guaranty of the U.S. government, represented by the Secretary
of Transportation, acting through MARAD.

    "MARAD Revenues" means the rights to payments and payments made under any
contracts between the Company or any of its Subsidiaries and one or more of
their customers under which the Company or any of its Subsidiaries uses a MARAD
Vessel to perform any of its obligations under such contract.

    "MARAD Vessels" means the Global Pioneer (Official Number 1040503), the
Man-o-War (Official Number 1045921), the Kingfish (Official Number 1049274), the
L-400 (Official Number 1056079), the CB-6 (Official Number 1048400) and the DB
Hercules (Official Number 635).

    "Material Adverse Change" shall mean (a) a material adverse change in the
business, Property, condition (financial or otherwise), results of operations of
the Company and its Subsidiaries, taken as a whole; (b) the occurrence and
continuance of any event or circumstance which could reasonably be expected to
have a material adverse effect on the Borrowers' and the Guarantors' ability,
taken as a whole, to perform their obligations under this Agreement, any Note,
any Guaranty, or any Security Document to which it is party; or (c) a material
adverse effect on the validity or enforceability of any material provision of
the Credit Agreement, any Note, any Guaranty, or any Security Document or the
material rights or remedies of the Administrative Agent, the Collateral
Monitoring Agent, or the Lenders thereunder.

    "Material Domestic Subsidiary" means any Material Subsidiary of the Company
which is not also a Foreign Subsidiary.

    "Material Partial Loss" means a Casualty Event that is not a Total Loss but
which results in excess of $3,000,000.00 damage to the Vessel.

    "Material Subsidiary" means any Subsidiary of the Company (a) having total
assets or annual gross revenues in excess of $10,000,000.00 (or the Equivalent
Amount if denominated in a currency other than Dollars) and which is not also a
Foreign Subsidiary (other than a Mexican Subsidiary) or (b) that owns any
Material Vessel, and "Material Subsidiaries" means all such Subsidiaries
collectively.

    "Material Vessel" means any construction barge, liftboat, dive support
vessel, offshore support vessel, jet sled, cargo barges, utility boats,
operational saturation diving systems or other vessel with an Orderly
Liquidation Value of $1,500,000.00 or more, other than the MARAD Vessels.

    "Maturity Date" means the earlier of (a) March 9, 2007 and (b) the earlier
termination in whole of the Commitments in accordance with the provisions of
this Agreement.

    "Maximum Facility Amount" means $100,000,000.

    "Maximum Rate" means the maximum nonusurious interest rate under applicable
law (determined under such laws after giving effect to any items which are
required by such laws to be construed as interest in making such determination,
including without limitation if required by such laws, certain fees and other
costs).

    "Mexican Collateral" means (a) all Pledged Collateral (as defined in the
Mexican Pledge Agreements), (b) all Collateral (as defined in the Mexican
Security Agreement) and (c) the Global Collateral.

    "Mexican Guarantors" means the parties listed as Mexican Guarantors on
Schedule 1.01(d).

    "Mexican Guaranty" means the guaranty executed by each Mexican Guarantor in
favor of the Administrative Agent for the ratable benefit of the Lenders
guaranteeing the Obligations of the Mexican Borrower and the other Mexican
Guarantors, as it may be amended or modified and in effect from time to time, in
substantially the form of the attached Exhibit C.

    "Mexican Parents" means Global Industries Mexico Holdings, S. de R.L. de
C.V., a Mexican sociedad de responsabilidad limitada de capital variable, Global
Industries Offshore Netherlands, BV, a Dutch limited liability company, and GLBL
Holdings, L.L.C., a Louisiana limited liability company.

    "Mexican Pledge Agreements" means the Pledge Agreements executed by each of
the Mexican Parents and all other documents or instruments executed in
connection therewith.

    "Mexican Security Agreement" means the Security Agreement executed by the
Mexican Subsidiaries and all other documents or instruments executed in
connection therewith.

    "Mexican Security Documents" means the Mexican Pledge Agreements, the
Mexican Security Agreement and all other documents or instruments executed in
connection therewith.

    "Mexican Subsidiaries" means the Mexican Parents, the Mexican Borrower,
Global Vessels Mexico, S. de R.L. de C.V., a Mexican sociedad de responsabilidad
limitada de capital variable, Global Industries Offshore Services, S. de R.L. de
C.V., a Mexican sociedad de responsabilidad limitada de capital variable, and
Global Industries Services, S. de R.L. de C.V., a Mexican sociedad de
responsabilidad limitada de capital variable, and each other Person that becomes
a Subsidiary of one or more of such entities after the Closing Date.

    "Mortgage" means each mortgage or deed of trust in substantially the form of
the attached Exhibit K and executed by the Company or a Subsidiary of the
Company to secure all or a portion of the Obligations.

    "Mortgaged Vessels" means the Initial Mortgaged Vessels and Vessels becoming
subject to a Vessel Mortgage pursuant to Section 5.12.

    "Multiemployer Plan" means a multiemployer plan as defined in section
4001(a)(3) of ERISA to which the Company or any member of the Controlled Group
is obligated to make contributions.

    "Net Cash Proceeds" means, with respect to any sale, transfer, or other
disposition of any of the Company's or any of its Subsidiaries' Property
(including the issuance, sale or transfer of stock or other equity interest by
the Company or such Subsidiary) all cash and Liquid Investments received by the
Company or any of its Subsidiaries from such issuance, sale, transfer or other
disposition after (a) payment of, or provision for, all commissions and other
reasonable out of pocket fees and expenses actually incurred; (b) payment of any
outstanding obligations relating to such Property paid in connection with, and
necessary for, any such sale, transfer, or other disposition; (c) the amount of
reserves recorded in accordance with GAAP for indemnity or similar obligations
of the Company and its Subsidiaries directly related to such sale, transfer or
other disposition; and (d) provision for all income or other taxes payable in
respect of the fiscal year in which such sale, transfer, or other disposition
occurs measured by or resulting from such sale transfer or other disposition and
which are payable in such fiscal year or the succeeding fiscal year.

    "Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Financial Contracts as determined in
accordance with GAAP. "Unrealized losses" means the fair market value of the
cost to such Person of replacing such Financial Contract as of the date of
determination (assuming the Financial Contract were to be terminated as of that
date), and "unrealized profits" means the fair market value of the gain to such
Person of replacing such Financial Contract as of the date of determination
(assuming such Financial Contract were to be terminated as of that date).

    "Note" means a Revolving Note or a Swingline Note, and "Notes" means all
such promissory notes collectively.

    "Notice of Assignment" has the meaning set forth in Section 9.03(b).

    "Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit E signed by a Responsible Officer of a Borrower.

    "Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of the attached Exhibit F signed by a Responsible
Officer of the Company.

    "Obligations" means (a) all unpaid principal of the Advances, unpaid
interest on the Advances (including any interest that, but for the provisions of
the Bankruptcy Code, would have accrued), all Reimbursement Obligations, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations and amounts payable by the Borrowers and the Guarantors to the
Administrative Agent or the Lenders under the Credit Documents, and (b) all
Financial Contract Obligations of the Company or any of its Subsidiaries owing
to any Lender or any Affiliate of a Lender.

    "Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

    "Orderly Liquidation Value" means with respect to the Mortgaged Vessels, (a)
on the Closing Date, the orderly liquidation value based on a liquidation
conducted over a twelve (12) month period, and (b) thereafter, the orderly
liquidation value for such other time period determined by Agents in their
Permitted Discretion. The term "orderly liquidation" of the Mortgaged Vessels
shall initially be based upon the appraisals delivered to the Administrative
Agent in connection with the Original Credit Agreement (a copy of which has been
delivered to the Collateral Monitoring Agent) and thereafter as set forth in the
most recent Appraisal Report delivered to Agents in accordance with Section
5.14(a) hereof.

    "Original Credit Agreement" has the meaning set forth in the second
introductory paragraph of this Agreement.

    "Original Currency" has the meaning set forth in Section 2.15(c).

    "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

    "Participants" has the meaning set forth in Section 9.02(a).

    "Performance Letter of Credit" means a letter of credit qualifying as a
"performance-based standby letter of credit" under 12 CFR Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation.

    "Permitted Bond Obligations" means the Company and its Subsidiaries'
obligations in respect of the bonds and bank guaranties listed on the attached
Schedule 1.01(a) in an amount not to exceed the amounts listed on such schedule
and any renewal and extension (but not increase) thereof.

    "Permitted Discretion" means a determination made in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment.

    "Permitted Liens" has the meaning set forth in Section 6.01.

    "Permitted Prior Liens" means Liens permitted under Sections 6.01(b) through
(k).

    "Person" means an individual, partnership, limited liability partnership,
limited liability company, corporation (including a business trust), joint stock
company, enterprise, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency, department or
instrumentality thereof or any trustee, receiver, custodian or similar official.

    "Plan" means an employee benefit plan (other than a Multiemployer Plan)
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Company or any member of
the Controlled Group may have any liability.

    "Pledge Agreements" means each of the Pledge Agreements in substantially the
form of the attached Exhibit G (or such other form as reasonably acceptable to
the Agents and the Company) and executed by each of the Pledgors to secure all
or a portion of the Obligations.

    "Pledgors" means the Company and its Subsidiaries listed on Schedule 1.01(d)
and other Subsidiaries of the Company executing a Pledge Agreement as required
by Section 5.11.

    "Prime Rate" means a fluctuating rate of interest per annum as shall be in
effect from time to time equal to the corporate base rate of interest publicly
announced by Calyon from time to time as its corporate base rate, whether or not
the Borrowers have notice thereof, when and as said corporate base rate changes.

    "Projections" means Company's forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a consistent
basis with the Company's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.

    "Property" of any Person means any and all property (whether real, personal,
or mixed, tangible or intangible) of such Person or other assets owned, leased
or operated by such Person.

    "Pro Rata Share" means, at any time with respect to any Lender, (a) before
the Revolving Commitments terminate, the ratio (expressed as a percentage) of
such Lender's Revolving Commitments at such time to the aggregate Revolving
Commitments at such time and (b) thereafter, the ratio (expressed as a
percentage) of such Lender's aggregate outstanding Advances and aggregate
outstanding participation interest in the Letter of Credit Exposure at such time
to the aggregate outstanding Advances of all the Lenders and Letter of Credit
Exposure at such time.

    "Protection and Indemnity Risks" means the usual risks covered by protection
and indemnity associations of international repute including the proportion not
recoverable in case of collision under the ordinary running-down clause.

    "Purchaser" has the meaning set forth in Section 9.03.

    "Qualified Cash" means, as of any date of determination, the amount of
unrestricted cash, marketable securities and Liquid Investments of Company and
its Domestic Subsidiaries which are Guarantors and the Cayman Guarantors
(provided that Control Agreements have been executed by each of the Cash
Management Banks with respect to the Cash Management Accounts of such Cayman
Guarantors and all of the post-closing requirements with respect to the Cayman
Guarantors set forth in Section 5.16(b) have been satisfied) that are in Deposit
Accounts or in Securities Accounts, or any combination thereof, and which such
Deposit Account or Securities Account is the subject of a Control Agreement and
is maintained by a branch office of the bank or securities intermediary located
within the United States.

    "Rate Hedging Agreement" means an agreement, device or arrangement providing
for payments which are related to fluctuations of interest rates, exchange rates
or forward rates, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts or warrants.

    "Regulations T, U, X and D" means Regulations T, U, X, and D of the Federal
Reserve Board, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

    "Reimbursement Obligations" means all of the obligations of the Company set
forth in paragraph (c) of Section 2.15.

    "Related Fund" means a fund, money market account, investment account or
other account managed by a Lender or an Affiliate of such Lender or its
investment manager.

    "Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.

    "Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section for which the disclosure
requirements have not been waived by the PBGC.

    "Response" shall have the meaning set forth in CERCLA or any other
Environmental Law.

    "Responsible Officer" means, of any Person, the Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, any Executive or
Senior Vice President, Vice President, Treasurer, Secretary of such Person or
any other member of senior management of such Person.

    "Restricted Payment" means (a) the declaration or making by the Company or
any of its Subsidiaries of any dividends or other distributions (in cash,
property, or otherwise) on, or any payment for the purchase, redemption or other
acquisition of, any shares of any capital stock (or other ownership interests)
of such Person, other than dividends payable in such Person's stock or other
ownership interests, as applicable; (b) the making by the Company or any of its
Subsidiaries of any payment (scheduled or otherwise) in respect of Subordinated
Debt, whether for principal, interest, fees, indemnities or any other amount;
and (c) any defeasance or covenant defeasance by the Company or any of its
Subsidiaries in respect of Subordinated Debt of such Person.

    "Revolving Advance" means an advance by a Lender to a Borrower as part of a
Revolving Borrowing and refers to a Base Rate Advance or a Eurodollar Advance.

    "Revolving Borrowing" means a borrowing consisting of simultaneous Revolving
Advances of the same Type made by each Lender pursuant to Section 2.01(a),
Continued pursuant to Section 2.02(b), or Converted by each Lender to Revolving
Advances of a different Type pursuant to Section 2.02(b).

    "Revolving Commitment" means, for each Lender, (a) on or before the
termination of the Revolving Commitments, the amount in Dollars set opposite
such Lender's name on Schedule 1.01(b) of this Agreement as its Revolving
Commitment or, if such Lender has entered into any Assignment and Acceptance or
Commitment Increase Agreement after the Closing Date, the amount set forth for
such Lender as its Revolving Commitment in the Notice of Assignment delivered to
the Administrative Agent pursuant to Section 9.03(b) or Commitment Increase
Agreement, as applicable, in each case, as such Revolving Commitment may be
reduced pursuant to Section 2.04 and (b) after the termination of the Revolving
Commitments and for purposes of the definitions of Majority Lenders and Pro Rata
Share only, the outstanding principal amount of such Lender's Revolving Advances
and Letter of Credit Exposure.

    "Revolving Note" means a promissory note of a Borrower payable to the order
of any Lender, in substantially the form of the attached Exhibit H-1 or H-2,
evidencing indebtedness of such Borrower to such Lender resulting from Revolving
Advances owing to such Lender.

    "Revolving Commitment Fee" means any fee charged on the Revolving Commitment
in the percentage amounts described in the definition of Applicable Margin.

    "Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to   which such Person is a party providing for the leasing
to the Company or any of its Subsidiaries of any Property owned by the Company
or any of its Subsidiaries which has been or is sold or transferred by the
Company or such Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.

    "SEC" means the Securities and Exchange Commission, and any successor
entity.

    "Securities Account" means any securities account (as that term is defined
in the UCC).

    "Security Agreements" means each of the Security Agreements in substantially
the form of the attached Exhibit I (or such other form as reasonably acceptable
to Agents and the Company) and executed by the Company and each Material
Subsidiary to secure all or a portion of the Obligations.

    "Security Documents" means the Mortgages, the Vessel Mortgages, the Pledge
Agreements, the Security Agreements, and each other document, instrument or
agreement executed in connection therewith or otherwise executed in order to
secure all or a portion of the Obligations.

    "Subordinated Debt" means any Debt of the Company or any of its Subsidiaries
which is subordinated to their respective obligations under the Credit Documents
in a manner satisfactory to the Administrative Agent and the Majority Lenders
and which is otherwise on terms and conditions satisfactory to the
Administrative Agent and the Majority Lenders.

    "Subsidiary" of a Person means any corporation, association, partnership or
other business entity of which more than 50% of the outstanding shares of
capital stock (or other equivalent interests) having by the terms thereof
ordinary voting power under ordinary circumstances to elect a majority of the
board of directors or Persons performing similar functions (or, if there are no
such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person.

    "Swingline Advance" means an advance made available to the Company by the
Swingline Bank pursuant to Section 2.01(d) and refers to a Base Rate Advance.

    "Swingline Bank" means Calyon or any other Lender as a successor Swingline
Bank.

    "Swingline Borrowing" means a borrowing consisting of a Swingline Advance
made by the Swingline Bank.

    "Swingline Commitment" means the obligation of the Swingline Bank to make
Swingline Advances up to a maximum principal amount of $10,000,000.00 at any
time outstanding.

    "Swingline Note" means a promissory note in substantially the form of the
attached Exhibit J duly executed by the Company and payable to the order of the
Swingline Bank evidencing the obligation of the Company to repay the Swingline
Advances.

    "Synthetic Lease Obligations" means the obligations of any Person under a
lease arrangement treated as an operating lease for financial accounting
purposes and a financing lease for tax purposes.

    "Tax Group" has the meaning set forth in Section 4.11.

    "Taxes" has the meaning set forth in Section 2.11(a).

    "Termination Event" means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30 day notice to the PBGC under such regulations); (b) the withdrawal of any
Loan Party or a member of the Controlled Group from a Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA;
(c) the giving of a notice of intent to terminate a Plan under Section 4041(c)
of ERISA; (d) the institution of proceedings to terminate a Plan by the PBGC; or
(e) any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.

    "Total Loss" means:

        (a) the actual, constructive, arranged, agreed, or compromised total
loss of any Mortgaged Vessel;

        (b) the requisition for title or other compulsory acquisition or
forfeiture of any Mortgaged Vessel otherwise than by requisition for hire; and

        (c) the capture, seizure, arrest, detention or confiscation of any
Mortgaged Vessel by any government or by Persons acting or purporting to act on
behalf of any government unless such Mortgaged Vessel be released from such
capture, seizure, arrest, detention or confiscation within 180 days after the
occurrence thereof.

    "Transferee" has the meaning set forth in Section 9.04.

    "Type" has the meaning set forth in Section 1.04.

    "UCC" means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Administrative Agent's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.

    "Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Plans exceeds the fair
market value of all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans using the actuarial
assumptions used for such Plans as of such valuation date.

    "Vessel Mortgages" means each of the Vessel Mortgages in substantially the
form of the attached Exhibit D and executed by the Company and each of its
Subsidiaries which owns an Initial Mortgaged Vessel or which obtains a Material
Vessel after the Closing Date to secure all or a portion of the Obligations.

    "War Risks" includes the risk of mines and hostile force and all risks
excluded from the standard form of English marine policy by the free capture and
seizure clause.

    "Wholly Owned" means, with respect to any Subsidiary of any Person, the
direct or indirect ownership of all of the outstanding capital stock or other
ownership interest of such Subsidiary (other than any director's qualifying
shares or investments by foreign nationals mandated by applicable law) by such
Person or one or more Wholly Owned Subsidiaries of such Person.

Section 1.02    Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".

Section 1.03    Accounting Terms. Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to Agents hereunder shall (unless otherwise disclosed to the Agents in
writing at the time of delivery thereof) be prepared, in accordance with GAAP
applied on a basis consistent with those used in the preparation of the latest
financial statements furnished to the Agents hereunder (which prior to the
delivery of the first financial statements under Section 5.05, shall mean the
Financial Statements). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with those
used in the preparation of the Financial Statements. In addition, all
calculations and defined accounting terms used herein shall, unless expressly
provided otherwise, when referring to any Person, refer to such Person on a
consolidated basis and mean such Person and its consolidated subsidiaries.

Section 1.04    Classes and Types of Advances. Advances are distinguished by
"Class" and "Type". The "Class" of an Advance refers to the determination of
whether such Advance is a Revolving Advance or Swingline Advance, each of which
constitutes a Class. The "Type" of an Advance refers to the determination
whether such Advance is a Eurodollar Advance or a Base Rate Advance, each of
which constitutes a Type.

Section 1.05    Miscellaneous. Article, Section, Schedule and Exhibit references
are to Articles and Sections of and Schedules and Exhibits to this Agreement,
unless otherwise specified. All references to instruments, documents, contracts,
and agreements are references to such instruments, documents, contracts, and
agreements as the same may be amended, supplemented, and otherwise modified from
time to time, unless otherwise specified.

 

ARTICLE II

THE ADVANCES

Section 2.01    The Advances.

Revolving Advances

. Each Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make Revolving Advances to the Borrowers in Dollars from time to
time on any Business Day during the period from the Closing Date until the
Maturity Date; provided that, (i) the sum of (A) the aggregate outstanding
principal amount of the Revolving Advances plus (B) the Letter of Credit
Exposure plus (C) the aggregate outstanding principal amount of the Swingline
Advances may not exceed at any time the lesser of (1) the aggregate amount of
the Revolving Commitments and (2) the Collateral Coverage Amount, (ii) the
aggregate outstanding Revolving Advances made to the Mexican Borrower may not
exceed $50,000,000.00, and (iii) the Letter of Credit Exposure may not exceed
the Maximum Facility Amount. Each Revolving Borrowing shall be in an aggregate
amount not less than $2,000,000.00 and in integral multiples of $500,000.00 in
excess thereof and shall consist of Revolving Advances of the same Type made on
the same day by the Lenders ratably according to their respective Revolving
Commitments. Within the limits of each Lender's Revolving Commitment, the
Borrowers may from time to time borrow, prepay pursuant to Section 2.07 and
reborrow under this Section 2.01(a).

 

Reserves

. Anything to the contrary in this Section 2.01(b) notwithstanding, Collateral
Monitoring Agent shall have the right to establish reserves in such amounts, and
with respect to such matters, as Collateral Monitoring Agent in its Permitted
Discretion shall deem necessary or appropriate, against the Collateral Coverage
Amount, with respect to (i) sums that Borrowers and Guarantors are required to
pay (such as taxes, assessments, insurance premiums, or, in the case of leased
assets, rents or other amounts payable under such leases) and have failed to pay
under any Section of this Agreement or any other Credit Document, (ii) amounts
owing by Borrowers or their Subsidiaries to any Person to the extent secured by
a Lien on, or trust over, any of the Collateral (other than any Permitted Lien)
which is specifically identified thereon as entitled to have priority over the
Administrative Agent's Liens, or which Lien or trust, in the Permitted
Discretion of Collateral Monitoring Agent establishes that it has a priority
superior to the Administrative Agent's Liens (such as Liens or trusts in favor
of landlords, warehousemen, stevedores, carriers, mechanics, materialmen,
laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or
other taxes where given priority under applicable law) in and to such item of
the Collateral, (iii) currency fluctuations, provided, however, that the amount
of each such reserve shall bear a reasonable relationship to the purpose for
which such reserve is being established and (iv) any vessel for which an
Appraisal Report has been delivered and that is no longer an Eligible Mortgaged
Vessel or has suffered a Casualty Event.

 

Collateral Coverage Amount

. The Collateral Coverage Amount shall at any time be based on the most recent
calculation of the Collateral Coverage Amount delivered by the Company to the
Collateral Monitoring Agent pursuant to Section 5.05(q)(i). Following the
Collateral Monitoring Agent's receipt of the calculation of the Collateral
Coverage Amount pursuant to Section 5.05(q)(i), the Collateral Monitoring Agent
shall review the terms thereof and in its Permitted Discretion make any
adjustments in accordance with the terms of Section 2.01(b) of this Agreement
and shall notify the Administrative Agent, the Issuing Bank, the Lenders and the
Company of the Collateral Coverage Amount that shall apply for the period up to
the next determination of the Collateral Coverage Amount. If at any time the
Company fails to deliver the calculation of the Collateral Coverage Amount
within the times specified in Section 5.05(q)(i), then the most recent
Collateral Coverage Amount, together with any adjustments made by the Collateral
Monitoring Agent in its Permitted Discretion and in accordance with Section
2.01(b)hereof, shall be deemed to be in effect until the Collateral Monitoring
Agent receives such calculation.

 

Swingline Advances

.

On the terms and conditions set forth in this Agreement, the Swingline Bank
agrees to from time to time on any Business Day during the period from the
Closing Date until the last Business Day occurring before the Maturity Date,
make advances ("Swingline Advances") in Dollars under the Swingline Note to the
Company for periods of up to five Business Days (except that no Swingline
Advance may mature after the Maturity Date), bearing interest at the Alternate
Base Rate plus the Applicable Margin for Base Rate Advances, and in an aggregate
principal amount not to exceed $10,000,000.00 outstanding at any time; provided
that the sum of (A) the aggregate principal amount of outstanding Revolving
Advances plus (B) the aggregate principal amount of outstanding Swingline
Advances plus (C) the Letter of Credit Exposure shall never exceed the lesser of
(i) the aggregate Revolving Commitments at such time and (ii) the Collateral
Coverage Amount; and provided further that no Swingline Advance shall be made by
the Swingline Bank if the statements set forth in Section 3.02 are not true on
the date of such Swingline Advance, it being agreed by the Company that the
giving of the applicable Notice of Borrowing and the acceptance by the Company
of the proceeds of such Swingline Advance shall constitute a representation and
warranty by the Company that on the date of such Swingline Advance such
statements are true. Subject to the other provisions hereof, the Company may
from time to time borrow, prepay (in whole or in part) and reborrow Swingline
Advances;

Except as provided in the following clause (iii) below, each request for a
Swingline Advance shall be made pursuant to telephone notice to the Swingline
Bank given no later than 11:00 a.m. (New York time) on the date of the proposed
Swingline Advance, promptly confirmed by a completed and executed Notice of
Borrowing telecopied to the Administrative Agent, who shall give the Collateral
Monitoring Agent prompt notice of such requested Borrowing by telecopier or
telex. The Swingline Bank will promptly make the Swingline Advance available to
the Company at the Company's account with the Administrative Agent. If the
Company does not intend to repay such Swingline Advance within five Business
Days after the date of the proposed Swingline Advance, then the Company shall
also deliver an irrevocable Notice of Conversion to the each Agent at its
Applicable Lending Office no later than 11:00 a.m. (New York time) on the date
of the requested Swingline Advance electing to Convert such Swingline Advance.
Each such Notice of Conversion shall be in writing or by telex, telecopier or
telephone, confirmed promptly in writing specifying (A) the requested Conversion
date (which shall be at least three Business Days after the making of such
Swingline Advance), (B) the amount of the Swingline Advance to be Converted, and
(C) the requested Interest Period. Promptly after receipt of a Notice of
Conversion under this paragraph, the Administrative Agent shall provide each
Lender with a copy thereof and notify each Lender of the interest rate under
Section 2.06(b). The portion of a Swingline Advance that is converted to
Eurodollar Advances shall constitute a new Borrowing.

 

The Company and the Lenders agree that in the event any Swingline Advance is not
repaid on the date due to the Swingline Bank, the Administrative Agent may give
each Lender a notice of Mandatory Revolving Borrowing, and upon receipt of such
notice, each Lender shall pay to the Administrative Agent its Pro Rata Share of
such Swingline Advance and such payment shall be deemed to be a Base Rate
Advance made pursuant to such Lender's Revolving Commitment, whether made before
or after termination of the Revolving Commitments, acceleration of the Revolving
Advances, or otherwise, and whether or not the conditions precedent in Section
3.02 have been satisfied at the time of such Mandatory Revolving Borrowing. The
Administrative Agent shall give each Lender notice of such Mandatory Revolving
Borrowing by 12:00 p.m. (New York time) on the date the Mandatory Revolving
Borrowing is to be made. Each Lender having a Revolving Commitment shall,
regardless of whether the conditions in Section 3.02 have been met at the time
of such Mandatory Revolving Borrowing and regardless of whether there exists any
Default or Event of Default, make its Revolving Advance available to the
Administrative Agent for the account of the Swingline Bank in immediately
available funds by 2:00 p.m. (New York time) on the date requested, and the
Company hereby irrevocably instructs the Swingline Bank to apply the proceeds of
such Mandatory Revolving Borrowing to the payment of the outstanding Swingline
Advances.

Section 2.02    Method of Borrowing.

Notice

. Each Borrowing (other than a Mandatory Revolving Borrowing) shall be made
pursuant to a Notice of Borrowing, given not later than (i) in the case of a
Borrowing comprised of Eurodollar Advances, 11:00 a.m. (New York time) on the
third Business Day before the Borrowing Date of a requested Borrowing and (ii)
in the case of a Borrowing comprised of Base Rate Advances, 6:00 p.m. (New York
time) on the first Business Day before the Borrowing Date of a requested
Borrowing, in each case to the Applicable Lending Office of the Administrative
Agent. The Administrative Agent shall give to each Lender prompt notice on the
day of receipt of a timely Notice of Borrowing of such requested Borrowing by
telecopier or telex. Each Notice of Borrowing shall be by telecopier, telex or
telephone, confirmed promptly in writing specifying (A) the Borrowing Date
(which shall be a Business Day), (B) the requested Type and Class of Advances
comprising such Borrowing, (C) the requested aggregate amount of such Borrowing,
and (D) if such Borrowing is to be comprised of Eurodollar Advances, the
requested Interest Period for each such Borrowing. In the case of a requested
Borrowing comprised of Eurodollar Advances, the Administrative Agent shall
promptly notify each Lender of the applicable interest rate under Section
2.06(b). Each Lender shall make available its Pro Rata Share of such Borrowing
before 3:00 p.m. (New York time) on the date of such Borrowing in immediately
available funds to the Administrative Agent at its Applicable Lending Office on
the date of such Borrowing or such other location as the Administrative Agent
may specify by notice to the Lenders. After the Administrative Agent's receipt
of such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will promptly make such funds available to
the applicable Borrower not later than 4:00 p.m. (New York time) on the
Borrowing Date at such account as such Borrower shall specify in writing to the
Administrative Agent.

 

Conversions and Continuations

. In order to elect to Convert or Continue an Advance under this Section, the
Company shall deliver an irrevocable Notice of Conversion or Continuation to the
Administrative Agent at its Applicable Lending Office no later than (i) 11:00
a.m. (New York time) at least one Business Day in advance of such requested
Conversion date in the case of a Conversion of a Eurodollar Advance to a Base
Rate Advance or (ii) 11:00 a.m. (New York time) at least three Business Days in
advance of such requested Conversion date in the case of a Conversion into or
Continuation of a Eurodollar Advance to another Eurodollar Advance. Each such
Notice of Conversion or Continuation shall be in writing or by telex, telecopier
or telephone, confirmed promptly in writing specifying (A) the requested
Conversion or Continuation date (which shall be a Business Day), (B) the amount,
Type, and Class of the Advance to be Converted or Continued, (C) whether a
Conversion or Continuation is requested, and if a Conversion, into what Type of
Advance, and (D) in the case of a Conversion to, or a Continuation of, a
Eurodollar Advance, the requested Interest Period. Promptly after receipt of a
Notice of Conversion or Continuation under this paragraph, the Administrative
Agent shall provide each Lender with a copy thereof and, in the case of a
Conversion to or a Continuation of a Eurodollar Advance, notify each Lender of
the interest rate under Section 2.06(b). The portion of Advances comprising part
of the same Borrowing that are converted to Advances of another Type shall
constitute a new Borrowing. Notwithstanding anything in this Agreement to the
contrary, Conversions of Eurodollar Advances may only be made at the end of the
applicable Interest Period for such Advances; provided, however, that
Conversions of Base Rate Advances may be made at any time.

 

Certain Limitations

. Notwithstanding anything in paragraphs (a) and (b) above:

at no time shall there be more than six Interest Periods applicable to
outstanding Eurodollar Advances which are Revolving Advances;

 

(A) if any Lender shall, at least one Business Day before the date of any
requested Borrowing, notify the Administrative Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other Governmental Authority asserts that
it is unlawful, for such Lender or any of its Applicable Lending Offices to
perform its obligations under this Agreement to make Eurodollar Advances, or to
fund or maintain Eurodollar Advances, the right of the Company to select
Eurodollar Advances from such Lender for such Borrowing or for any subsequent
Borrowing shall be suspended until such Lender shall notify the Administrative
Agent that the circumstances causing such suspension no longer exist, and (B)
such Lender's Advance for such Borrowing shall be a Base Rate Advance and such
Lender agrees to use commercially reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would
avoid the effect of this paragraph and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender;

 

if the Administrative Agent is unable to determine the Eurodollar Reference Rate
for any requested Borrowing and the Administrative Agent gives telephonic or
telecopy notice thereof to the Company as soon as practicable, the right of the
Company to select Eurodollar Advances for such Borrowing or for any subsequent
Borrowing and the obligation of the Lenders to make such Eurodollar Advances
shall be suspended until the Administrative Agent shall notify the Company and
the Lenders that the circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Base Rate Advance;

 

if the Majority Lenders shall, by 11:00 a.m. (New York time) at least one
Business Day before the date of any requested Borrowing, notify the
Administrative Agent that the Eurodollar Reference Rate will not adequately
reflect the cost to such Lenders of making or funding their respective
Eurodollar Advances and the Administrative Agent gives telephonic or telecopy
notice thereof to the Company as soon as practicable, the right of the Borrowers
to select Eurodollar Advances for such Borrowing or for any subsequent Borrowing
and the obligation of the Lenders to make Eurodollar Advances shall be suspended
until the Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance;

 

if the Company shall fail to select the duration or Continuation of any Interest
Period for any Eurodollar Advances in accordance with the provisions contained
in the definition of "Interest Period" in Section 1.01 and paragraphs (a) and
(b) above or shall fail to deliver a Notice of Conversion or Continuation or to
specify the Type of Eurodollar Advance in a Notice of Conversion or
Continuation, the Administrative Agent will forthwith so notify the Company and
the Lenders and such Advances will be made available to the Borrowers on the
date of such Borrowing and will have an Interest Period of one month; and

 

no Advance may be Converted or Continued as a Eurodollar Advance at any time
when a Default has occurred and is continuing.

 

Notices Irrevocable

. Each Notice of Borrowing and Notice of Conversion or Continuation delivered by
a Borrower shall be irrevocable and binding on the Borrowers. In the case of any
Borrowing which the related Notice of Borrowing or Notice of Conversion or
Continuation specifies is to be comprised of Eurodollar Advances, the Company
shall indemnify each Lender against any loss, out-of-pocket cost or expense
actually incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing or such Notice of
Conversion or Continuation for such Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss, cost or expense
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender as part of such Borrowing when such Advance, as a result of such failure,
is not made on such date.

 

Administrative Agent Reliance

. Unless the Administrative Agent shall have received notice from a Lender
before any Borrowing Date that such Lender will not make available to the
Administrative Agent such Lender's Pro Rata Share of any Borrowing, the
Administrative Agent may assume that such Lender has made its Pro Rata Share of
such Borrowing available to the Administrative Agent on the Borrowing Date in
accordance with paragraph (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such Borrowing Date a corresponding amount. If and to the extent that such
Lender shall not have so made its Pro Rata Share of such Borrowing available to
the Administrative Agent, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate per annum equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. If such Lender shall
repay to the Administrative Agent such corresponding amount and interest as
provided above, such corresponding amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising such Borrowing.
If such Lender's Advance as part of such Borrowing is not made available by such
Lender within three Business Days of the Borrowing Date, the applicable Borrower
shall repay such Lender's share of such Borrowing (together with interest
thereon at the interest rate applicable during such period to Advances
comprising such Borrowing) to the Administrative Agent not later than three
Business Days after receipt of written notice from the Administrative Agent
specifying such Lender's share of such Borrowing that was not made available to
the Administrative Agent.

 

Lender Obligations Several

. The failure of any Lender to make the Advance to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any, to make
its Advance on the Borrowing Date. No Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender
on any Borrowing Date.

 

Notes

. The indebtedness of each Borrower to each Lender resulting from Revolving
Advances owing to such Lender may be evidenced by the Revolving Note of the
applicable Borrower payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its registered assigns). The indebtedness of the
Company to the Swingline Bank resulting from Swingline Advances owing to the
Swingline Bank shall be evidenced by the Swingline Note.

Section 2.03    Fees.

Revolving Commitment Fees

. The Company agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee per annum on the average daily amount by which such
Lender's Revolving Commitment exceeds the sum of (i) the aggregate principal
amount of such Lender's outstanding Revolving Advances and (ii) its
participation share of the Letter of Credit Exposure, from the Closing Date
until the Maturity Date at the Applicable Margin for Revolving Commitment Fees.
The fees payable pursuant to this clause (a) are due quarterly in arrears on the
last Business Day of each March, June, September, and December commencing March
31, 2004 and on the Maturity Date. For purposes of calculating the commitment
fee hereunder, the Letter of Credit Exposure for any Letters of Credit issued in
a currency other than Dollars shall be at any time the Dollar Amount of such
Letter of Credit Exposure as determined on the most recent Computation Date with
respect to such Letter of Credit.

 

Administrative Agent's Fees

. The Company agrees to pay to the Administrative Agent and the Arranger the
agent's and arranger's fees as separately agreed upon by the Company and the
Administrative Agent in the letter agreement dated August 6, 2004 from the
Arranger and Calyon to the Company on the dates required by such letter.

 

Letter of Credit Fees

. The Company agrees to pay (i) to the Administrative Agent for the pro rata
benefit of each Lender for each Letter of Credit a fee per annum equal to the
Applicable Margin then in effect for such type of Letter of Credit times the
daily maximum amount available to be drawn under such Letter of Credit; provided
that, if any Borrower shall default in the payment of any amount of principal,
interest or fees when due (whether at stated maturity, by acceleration, or
otherwise), then the applicable fee rate on such Letters of Credit shall be the
Applicable Margin then in effect for such Letter of Credit plus 2% per annum and
(ii) to such Issuing Bank, a fronting fee for each Letter of Credit issued for
its account equal to 0.125% per annum times the daily maximum amount available
to be drawn under such Letter of Credit. Each such fee shall be based on the
Dollar Amount of the maximum amount available to be drawn under such Letter of
Credit from the date of issuance of the Letter of Credit until its expiration
date and shall be payable quarterly in arrears on the last Business Day of each
March, June, September, and December commencing March 31, 2004 and on its
expiration date. In addition, the Company agrees to pay to such Issuing Bank all
customary transaction costs and fees charged by such Issuing Bank in connection
with the issuance, transfer, amendment, drawing, negotiation or reissuance of a
Letter of Credit for the Borrower's account, such costs and fees to be due and
payable on the date specified by such Issuing Bank in the invoice for such costs
and fees.

 

Audit, Appraisal, and Valuation Charges

. The Company agrees to pay audit, appraisal, and valuation fees and other
reasonable charges as follows (i) out-of-pocket expenses for each financial
audit of the Company and its Subsidiaries performed by personnel employed by the
Collateral Monitoring Agent (and, in addition, after the occurrence and during
the continuance of an Event of Default, a fee of $850 per day per auditor) and,
(ii) except as otherwise provided in Section 5.14, after the occurrence and
during the continuance of an Event of Default, the actual charges paid or
incurred by Collateral Monitoring Agent if it elects to employ the services of
one or more third Persons to perform financial audits of the Company or its
Subsidiaries, to appraise the Collateral, or any portion thereof, or to assess
the Company's and its Subsidiaries' business valuation.

Section 2.04    Reduction of the Commitments. The Company shall have the right,
upon at least five days' irrevocable notice to the Administrative Agent, to
terminate in whole or reduce ratably in part the unused portion of the Revolving
Commitments; provided that each partial reduction of Revolving Commitments shall
be in the minimum aggregate amount of $5,000,000.00 and in integral multiples of
$1,000,000.00 in excess thereof (or such lesser amount as may then be
outstanding); and provided further that the aggregate amount of the Revolving
Commitments may not be reduced below the aggregate principal amount of the
outstanding Revolving Advances plus the Letter of Credit Exposure plus the
outstanding principal amount of the Swingline Advances. Any reduction or
termination of the Revolving Commitments pursuant to this Section 2.04 shall be
permanent, with no obligation of the Lenders to reinstate such Revolving
Commitments and the commitment fees provided for in Section 2.03(a) shall
thereafter be computed on the basis of the Revolving Commitments as so reduced.
The Administrative Agent shall give each Lender prompt notice of any commitment
reduction or termination.

Section 2.05    Repayment. Each Borrower shall repay the outstanding principal
amount of each Revolving Advance made to it on the Maturity Date.

Section 2.06    Interest. The Borrowers shall pay interest on the unpaid
principal amount of each Advance made by each Lender to it from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:

Base Rate Advances

. If such Advance is a Base Rate Advance, a rate per annum equal at all times to
the lesser of (i) the Alternate Base Rate in effect from time to time plus the
Applicable Margin and (ii) the Maximum Rate, payable in arrears on the last
Business Day of each March, June, September and December and on the date such
Base Rate Advance shall be paid in full; provided that, if any Event of Default
has occurred and is continuing, then, at the option of the Agents or at the
request of the Majority Lenders, all Base Rate Advances shall bear interest,
payable on demand, at a rate per annum equal at all times to the lesser of (i)
the Alternate Base Rate in effect from time to time plus the Applicable Margin
plus 2% and (ii) the Maximum Rate.

 

Eurodollar Advances

. If such Advance is a Eurodollar Advance, a rate per annum equal at all times
during the Interest Period for such Advance to the lesser of (i) the Eurodollar
Reference Rate for such Interest Period plus the Applicable Margin and (ii) the
Maximum Rate, payable on the last day of such Interest Period, and, in the case
of Interest Periods of greater than three months, on the Business Day which
occurs during such Interest Period three months from the first day of such
Interest Period; provided that, if any Event of Default has occurred and is
continuing, then, at the option of the Agents or at the request of the Majority
Lenders, all Eurodollar Advances shall bear interest, payable on demand, at a
rate per annum equal at all times to the lesser of (i) the rate required to be
paid on such Advance immediately prior to the occurrence of such Event of
Default plus 2% and (ii) the Maximum Rate.

 

Additional Interest on Eurodollar Advances

. The Company shall pay to each Lender, so long as any such Lender shall be
required under regulations of the Federal Reserve Board to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each
Eurodollar Advance, from the effective date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (A) the Eurodollar Reference Rate for the
Interest Period for such Advance from (B) the rate obtained by dividing such
Eurodollar Reference Rate by a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage of such Lender for such Interest Period, payable on each
date on which interest is payable on such Advance. Such additional interest
payable to any Lender shall be determined by such Lender and notified to the
Company through the Administrative Agent (such notice to include the calculation
of such additional interest, which calculation shall be conclusive in the
absence of manifest error, and be accompanied by any evidence indicating the
need for such additional interest as the Company may reasonably request).

 

Usury Recapture

. In the event the rate of interest chargeable under this Agreement or the Notes
at any time (calculated after giving effect to all items charged which
constitute "interest" under applicable laws, including fees and margin amounts,
if applicable) is greater than the Maximum Rate, the unpaid principal amount of
the Notes shall bear interest at the Maximum Rate until the total amount of
interest paid or accrued on the Notes equals the amount of interest which would
have been paid or accrued on the Notes if the stated rates of interest set forth
in this Agreement had at all times been in effect.

        In the event, upon payment in full of the Notes, the total amount of
interest paid or accrued under the terms of this Agreement and the Notes is less
than the total amount of interest which would have been paid or accrued if the
rates of interest set forth in this Agreement had, at all times, been in effect,
then each Borrower shall, to the extent permitted by applicable law, pay the
Administrative Agent for the account of the Lenders an amount equal to the
difference between (i) the lesser of (A) the amount of interest which would have
been charged on its Notes if the Maximum Rate had, at all times, been in effect
and (B) the amount of interest which would have accrued on its Notes if the
rates of interest set forth in this Agreement had at all times been in effect
and (ii) the amount of interest actually paid under this Agreement on its Notes.

        In the event the Lenders ever receive, collect or apply as interest any
sum in excess of the Maximum Rate, such excess amount shall, to the extent
permitted by law, be applied to the reduction of the principal balance of the
Notes, and if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.

Section 2.07    Prepayments.

Right to Prepay

. The Borrowers shall have no right to prepay any principal amount of any
Advance except as provided in this Section 2.07.

 

Optional

. A Borrower may elect to prepay any of the Advances owing by it to the Lenders,
after giving prior written notice of such election by (i) 11:00 a.m. (New York
time) five days before such prepayment date in the case of Borrowings which are
comprised of Eurodollar Advances, and (ii) 11:00 a.m. (New York time) on the
Business Day of such prepayment, in case of Borrowings which are comprised of
Base Rate Advances, in each case to the Administrative Agent stating the
proposed date and aggregate principal amount of such prepayment and the Type of
Advances to be prepaid. If any such notice is given, the Administrative Agent
shall give prompt notice thereof to each Lender and such Borrower shall prepay
Advances comprising part of the same Borrowing in whole or ratably in part in an
aggregate principal amount equal to the amount specified in such notice;
provided, however, that each partial prepayment shall be in an aggregate
principal amount not less than $5,000,000.00 and in integral multiples of
$1,000,000.00 in excess thereof (or such lesser amount as may then be
outstanding).

 

Mandatory

. The Company agrees to make a mandatory prepayment of the Revolving Advances
and/or the Swingline Advances:

 

or if the Revolving Advances and the Swingline Advances have been repaid in
full, make deposits into the Cash Collateral Account to provide cash collateral
for the Letter of Credit Exposure, on any date on which the outstanding
principal amount of the Revolving Advances plus the Letter of Credit Exposure
plus the outstanding principal amount of the Swingline Advances exceeds the
lesser of (A) the aggregate Revolving Commitments and (B) the Collateral
Coverage Amount, in the amount of such excess;

 

by an amount equal to 100% of the Debt Incurrence Proceeds that the Company or
any of its Subsidiaries receives from each Debt Incurrence after the Closing
Date within 30 days after the date of each such Debt Incurrence;

 

by an amount equal to 100% of the Equity Issuance Proceeds in excess of
$5,000,000.00 per occurrence that the Company or any of its Subsidiaries
receives from each Equity Issuance after March 31, 2004 within 30 days after the
date of each such Equity Issuance;

 

by an amount equal to (A) provided that no Event of Default has occurred and is
continuing, (1) the amount required by Section 6.03(b)(iii) from the sale of any
assets permitted by Section 6.03 (other than sales of assets from the Company to
any of its Subsidiaries or from any of its Subsidiaries to the Company or
another Subsidiary of the Company), to the extent such amounts are not
reinvested in accordance with Section 6.03, on the 95th day after receipt of
such amount and (2) 100% of the Net Cash Proceeds in excess of $5,000,000.00
that the Company or any of its Subsidiaries receives from Insurance Policies or
condemnation awards in connection with a Casualty Event to the extent such
insurance proceeds or condemnation proceeds are not reinvested in replacement
assets of comparable value and utility within 90 days after receipt of such
proceeds, on the 95th day after receipt of such Net Cash Proceeds; provided,
however, that until such Net Cash Proceeds from the sale of any Mortgaged
Vessels are either reinvested in replacement assets of comparable value and
utility within the time required or used to repay the Advances, then such Net
Cash Proceeds shall be deposited into and maintained in one or more Cash
Management Accounts; and provided, further that, if there are no outstanding
Advances, the Net Cash Proceeds received are greater than the amount of
outstanding Advances or not all of the Net Cash Proceeds are reinvested in
replacement assets of comparable value and utility within the time required,
then such excess Net Cash Proceeds shall be maintained in one or more Cash
Management Accounts until they are reinvested in replacement assets of
comparable value and utility or (B) if an Event of Default has occurred and is
continuing, then 100% of the Net Cash Proceeds that the Company or any of its
Subsidiaries receives from the sale of any asset or any Insurance Policy or
condemnation award in connection with a Casualty Event; and

 

by an amount equal to 100% of the Net Cash Proceeds that the Company or any of
its Subsidiaries receives from the sale of assets permitted by Section
6.03(vii). Any remaining Net Cash Proceeds shall be reinvested in replacement
assets of comparable value and utility; provided, however, that until such Net
Cash Proceeds are reinvested in replacement assets of comparable value and
utility, then such Net Cash Proceeds shall be deposited into and maintained in
one or more Cash Management Accounts.

 

Illegality

. If any Lender shall notify the Administrative Agent and the Company that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful for such Lender or its Applicable Lending
Office to perform its obligations under this Agreement or to make or maintain
Eurodollar Advances then outstanding hereunder, the applicable Borrower shall,
no later than 11:00 a.m. (New York time) (i) if not prohibited by law or
regulation to maintain such Eurodollar Advances for the duration of the Interest
Period, on the last day of the Interest Period for each outstanding Eurodollar
Advance or (ii) if prohibited by law or regulation to maintain such Eurodollar
Advances for the duration of the Interest Period, on the second Business Day
following its receipt of such notice, (A) prepay all Eurodollar Advances of all
of the Lenders then outstanding, together with accrued interest on the principal
amount prepaid to the date of such prepayment and amounts, if any, required to
be paid pursuant to Section 2.08 as a result of such prepayment being made on
such date, (B) each Lender shall simultaneously make a Base Rate Advance or, if
not otherwise prohibited, make an Eurodollar Advance in an amount equal to the
aggregate principal amount of the affected Eurodollar Advances, and (C) the
right of the Borrowers to select Eurodollar Advances shall be suspended until
such Lender shall notify Administrative Agent that the circumstances causing
such suspension no longer exist. Each Lender agrees to use commercially
reasonable efforts (consistent with its internal policies and subject to legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such designation would avoid the effect of this paragraph and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. If the condition requiring the prepayment under
this paragraph shall continue for such Lender for 90 days, such Lender may be
replaced in accordance with the procedures in Section 2.13.

 

Ratable Payments; Effect of Notice

. Each payment of any Advance pursuant to this Section 2.07 or any other
provision of this Agreement shall be made in a manner such that all Advances
comprising part of the same Borrowing are paid in whole or ratably in part. All
notices given pursuant to this Section 2.07 shall be irrevocable and binding
upon the Borrowers. Each prepayment pursuant to this Section 2.07 shall be
accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.08 as
a result of such prepayment being made on such date.

Section 2.08    Funding Losses. If (a) any payment of principal of any
Eurodollar Advance is made other than on the last day of the Interest Period for
such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VII or (b) any
Borrower fails to make a principal or interest payment with respect to any
Eurodollar Advance on the date such payment is due and payable, such Borrower
shall, within 10 days of any written demand sent by any Lender to the Company
through the Administrative Agent, pay to Administrative Agent for the account of
such Lender any amounts (without duplication of any other amounts payable in
respect of breakage costs) required to compensate such Lender for any additional
losses, out of pocket costs or expenses which it may reasonably incur as a
result of such payment or nonpayment, including, without limitation, any loss,
cost or expense actually incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Advance.

Section 2.09    Increased Costs.

Eurodollar Advances

. If, due to either (i) the introduction of or any change (other than any change
by way of imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding, or maintaining Eurodollar Advances or participating in the
Letter of Credit Exposure or to any Issuing Bank for issuing a Letter of Credit,
then the Company shall from time to time, upon demand by such Lender or such
Issuing Bank (with a copy of such demand to the Administrative Agent),
immediately pay to Administrative Agent for the account of such Lender or such
Issuing Bank additional amounts (without duplication of any other amounts
payable in respect of increased costs) sufficient to compensate such Lender for
such increased cost; provided, however, that, before making any such demand,
each Lender and each Issuing Bank agrees to use commercially reasonable efforts
(consistent with its internal policy and subject to legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender or such
Issuing Bank, be otherwise economically disadvantageous to such Lender or such
Issuing Bank. A certificate indicating the amount of such increased cost and
detailing the calculation of such cost shall be submitted by such Lender or such
Issuing Bank to the Company and the Administrative Agent and shall be conclusive
and binding for all purposes, absent manifest error.

 

Capital Adequacy

. If any Lender or Issuing Bank determines in good faith that compliance with
any law or regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) implemented or
effective after the Closing Date affects or would affect the amount of capital
required or expected to be maintained by such Lender or such Issuing Bank or any
corporation controlling such Lender or such Issuing Bank and that the amount of
such capital is increased by or based upon the existence of such Lender's or
such Issuing Bank's commitment to lend, commitment to issue a Letter of Credit,
or other commitments of this type, then, upon demand by such Lender or such
Issuing Bank (with a copy of any such demand to the Administrative Agent), the
Company shall immediately pay to Administrative Agent for the account of such
Lender or such Issuing Bank as the case may be, from time to time as specified
by such Lender or such Issuing Bank, additional amounts (without duplication of
any other amounts payable in respect of increased costs) sufficient to
compensate such Lender or such Issuing Bank, in light of such circumstances,
with respect to such Lender or such Issuing Bank, to the extent that such Lender
or such Issuing Bank reasonably determines such increase in capital to be
allocable to the existence of such Lender's or such Issuing Bank's commitment to
lend or issue a Letter of Credit under this Agreement. A certificate as to such
amount and detailing the calculation of such costs shall be submitted to the
Company by such Lender or such Issuing Bank, such certificate to be conclusive
and binding for all purposes, absent manifest error.

Section 2.10    Payments and Computations.

Payments Generally

. Except as provided in Section 2.15(c), all payments of principal, interest,
fees, and other amounts to be made by the Borrowers under this Agreement and the
other Credit Documents shall be made to the Administrative Agent in Dollars at
its office in New York or such other office as it designates to the Company in
immediately available funds, without setoff, deduction, or counterclaim.

 

Payment Procedures

. The Borrowers shall make each payment under this Agreement and under their
respective Notes not later than 12:00 p.m. (New York time) on the day when due
to the Administrative Agent at the Administrative Agent's address specified in
Section 11.02 (or such other location as the Administrative Agent shall
designate in writing to the Borrower). The Administrative Agent will promptly
thereafter, and in any event prior to the close of business on the day any
timely payment is made, cause to be distributed like funds relating to the
payment of principal, interest or fees ratably (other than amounts payable
solely to the Administrative Agent or the Collateral Monitoring Agent, or a
specific Lender pursuant to Section 2.03(b), 2.03(c), 2.08, 2.09, 2.11, or 2.15
but after taking into account payments effected pursuant to Section 11.04) in
accordance with each Lender's Pro Rata Share to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Offices, in each case to be applied in accordance with
the terms of this Agreement. All payments owing in respect of Advances made or
Letters of Credit issued in one currency (including, without limitation,
interest, principal, commitment fees and letter of credit fees) shall be paid or
repaid, as the case may be, in the same currency as such Advance or Letter of
Credit, as applicable.

 

Computations

. All computations of interest based on the Prime Rate shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Federal Funds Effective Rate,
the Eurodollar Reference Rate and of fees shall be made by the Administrative
Agent, on the basis of a year of 360 days, in each case for the actual number of
days (including the first day, but excluding the last day) occurring in the
period for which such interest or fees are payable. Each determination by the
Administrative Agent of an interest rate shall be conclusive and binding for all
purposes, absent manifest error.

 

Non Business Day Payments

. Whenever any payment shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest or fees, as the case may be.

 

Agent Reliance

. Unless the Administrative Agent shall have received written notice from a
Borrower prior to the date on which any payment is due to the Lenders that such
Borrower will not make such payment in full, the Administrative Agent may assume
that such Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such date an amount equal to the
amount then due to such Lender. If and to the extent a Borrower shall not have
so made such payment in full to Administrative Agent, each Lender shall repay to
the Administrative Agent forthwith on demand such amount distributed to such
Lender, together with interest, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate for such day.

Section 2.11    Taxes.

No Deduction for Certain Taxes

. Any and all payments by the Borrowers shall be made, in accordance with
Section 2.10, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto, excluding (i) in the case of each Lender, each
Issuing Bank and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it by the jurisdiction under the laws of which such
Lender, Issuing Bank or the Administrative Agent (as the case may be) is
organized or any political subdivision of the jurisdiction and (ii) any taxes
imposed by the United States of America by means of withholding at the source if
and to the extent that such taxes shall be in effect and shall be applicable, on
the Closing Date (or, in the case of a Lender which becomes a party to this
Agreement after the Closing Date, on the date such Lender becomes a party to
this Agreement), to payments to be made to such Lender, Issuing Bank or the
Administrative Agent (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes")
and, in the case of each Lender, Taxes by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision of such jurisdiction. If
a Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable to any Lender, Issuing Bank or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that, after making all
required deductions, such Lender, Issuing Bank or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made; provided, however, that if a Borrower's obligation
to deduct or withhold Taxes is caused solely by such Lender's, Issuing Bank's or
Administrative Agent's failure to provide the forms described in paragraph (e)
of this Section 2.11 and such Lender, Issuing Bank or Administrative Agent could
have provided such forms, no such increase shall be required; (ii) such Borrower
shall make such deductions; and (iii) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.

 

Other Taxes

. In addition, each Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes, or the
other Credit Documents (hereinafter referred to as "Other Taxes").

 

Indemnification

. Each Borrower indemnifies each Lender, Issuing Bank, Collateral Monitoring
Agent and the Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.11) paid by such Lender,
Issuing Bank or the Administrative Agent (as the case may be) and any liability
(including interest and expenses) arising therefrom or with respect thereto
(whether or not such Taxes or Other Taxes were correctly or legally asserted),
in either case, attributable to such Borrower. Each payment required to be made
by a Borrower in respect of this indemnification shall be made to the
Administrative Agent for the benefit of any party claiming such indemnification
within 30 days from the date such Borrower receives written demand detailing the
calculation of such amounts therefor from Administrative Agent on behalf of
itself as Administrative Agent, Collateral Monitoring Agent on behalf of itself
as Collateral Monitoring Agent, any such Issuing Bank or any such Lender. If any
Lender, Issuing Bank, Collateral Monitoring Agent or the Administrative Agent
receives a refund in respect of any taxes paid by a Borrower under this
paragraph (c), such Lender, Issuing Bank or Administrative Agent, as the case
may be, shall promptly pay to such Borrower its share of such refund.

 

Evidence of Tax Payments

. Each Borrower will pay prior to delinquency all Taxes payable in respect of
any payment. Within 30 days after the date of any payment of Taxes, such
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 11.02, the original or a certified copy of a receipt evidencing payment
of such Taxes.

 

Foreign Lender Withholding Exemption

. Each Lender that is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to the Company and the
Administrative Agent on the Closing Date or upon the effectiveness of any
Assignment and Acceptance (i) two duly completed copies of United States
Internal Revenue Service Form W-8ECI or W-8BEN or successor applicable form, as
the case may be, (ii) if applicable, an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax, and (iii) any other governmental forms
which are necessary or required under an applicable tax treaty or otherwise by
law to reduce or eliminate any withholding tax, which have been reasonably
requested by a Borrower. Each Lender which delivers to the Company and the
Administrative Agent a Form W-8ECI or W-8BEN and Form W-8 or W-9 pursuant to the
preceding sentence further undertakes to deliver to the Company and the
Administrative Agent two further copies of Form W-8ECI or W-8BEN and Form W-8 or
W-9, or successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Company and the Administrative
Agent, and such extensions or renewals thereof as may reasonably be requested by
the Company and the Administrative Agent. If an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any delivery required by the preceding sentence would otherwise be
required which renders all such forms inapplicable or which would prevent any
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Company and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax, such Lender shall not be
required to deliver such forms. Each Borrower shall withhold tax at the rate and
in the manner required by the laws of the United States with respect to payments
made to a Lender failing to timely provide the requisite Internal Revenue
Service forms and shall not be required to pay any additional amounts pursuant
to paragraph (a) or indemnify a Lender pursuant to paragraph (c) with respect to
such withheld tax.

 

Repayment under Certain Circumstances

. If a Borrower is required by any law or regulation to make any deduction or
withholding from any sum payable by it under this Agreement and is prevented by
law from fulfilling the related gross-up obligation, upon written notice to such
Borrower from the Administrative Agent (which shall give such notice if, and
only if, so requested by any Lender) the relevant Advances shall be repaid
within 30 days of the date such notice is received by such Borrower together
with accrued interest and any amounts owing under Section 2.08.

 

Mitigation

. Each Lender shall use its best efforts (consistent with its internal policies
and legal and regulatory restrictions) to select a jurisdiction for its
Applicable Lending Office or change the jurisdiction of its Applicable Lending
Office, as the case may be, so as to avoid the imposition of any Taxes or Other
Taxes or to eliminate the amount of any such additional amounts which may
thereafter accrue; provided that no such selection or change of the jurisdiction
for its Applicable Lending Office shall be made if, in the reasonable judgment
of such Lender, such selection or change would be disadvantageous to such
Lender.

Section 2.12    Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set off or
otherwise) on account of the Advances made by it in excess of its Pro Rata Share
of payments on account of the Advances or Letter of Credit Obligations obtained
by all the Lenders, such Lender shall notify the Administrative Agent and
forthwith purchase from the other Lenders such participations in the Advances
made by them or Letter of Credit Obligations held by them as shall be necessary
to cause such purchasing Lender to share the excess payment ratably in
accordance with the requirements of this Agreement with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such Lender's ratable share (according to the proportion
of (a) the amount of the participation sold by such Lender to the purchasing
Lender as a result of such excess payment to (b) the total amount of such excess
payment) of such recovery, together with an amount equal to such Lender's
ratable share (according to the proportion of (a) the amount of such Lender's
required repayment to the purchasing Lender to (b) the total amount of all such
required repayments to the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. Each Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.12 may, to the fullest extent
permitted by law, unless and until rescinded as provided above, exercise all its
rights of payment (including the right of set off) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation.

Section 2.13    Lender Replacement; Agents.

If (i) any Lender has notified the Company and the Administrative Agent of its
incurring additional costs under Section 2.09 or (ii) any Lender has required
the Borrower to make payment for taxes under Section 2.11(a) (other than
payments in respect of Mexican Taxes) or (iii) any Lender becomes a
Non-Consenting Lender (as defined below), then the Company may, unless such
Lender has notified the Company and the Administrative Agent that the
circumstances giving rise to such notice no longer apply or a Default exists,
terminate, in whole but not in part, the Revolving Commitment of any such Lender
(other than the Administrative Agent) (the "Terminated Lender") and repay the
Advances of such Lender at any time upon five Business Days prior written notice
to the Terminated Lender and the Administrative Agent (such notice referred to
herein as a "Notice of Termination"). In order to effect the termination of the
Revolving Commitment of the Terminated Lender and the repayment of such
Terminated Lender's Advances, the Company shall (i) obtain an agreement with one
or more other Lenders to increase their Revolving Commitments and accept an
assignment of the Terminated Lender's Advances or (ii) request any one or more
other Persons otherwise meeting the requirements of Section 9.03(a) ("Eligible
Assignees") to become parties to this Agreement in place of such Terminated
Lender and agree to accept a Revolving Commitment in an aggregate amount or
amounts equal to the Revolving Commitment held by the Terminated Lender and
accept an assignment of the Terminated Lender's Advances and (iii) pay all
amounts due to the Terminated Lender pursuant to the provisions of Section 2.09
and 2.11(a); provided, however, that such one or more Eligible Assignees
selected by the Company must become parties by accepting an Assignment and
Acceptance (the Lenders or other Eligible Assignees that agree to accept in
whole or in part the Revolving Commitment of the Terminated Lender and accept an
assignment of the Terminated Lender's Advances being referred to herein as the
"Replacement Lenders"), such that the aggregate increased or accepted Revolving
Commitments of the Replacement Lenders and Advances assigned to the Replacement
Lenders under clauses (i) and (ii) above equal to the Revolving Commitment and
Advances of the Terminated Lender. The Notice of Termination shall include the
name of the Terminated Lender, the date the termination will occur (the
"Termination Date"), and the Replacement Lender or Replacement Lenders to which
the Terminated Lender will assign its Revolving Commitment and Advances and, if
there will be more than one Replacement Lender, the portion of the Terminated
Lender's Revolving Commitment and Advances to be assigned to each Replacement
Lender. On the Termination Date, (i) the Terminated Lender shall by execution
and delivery of an Assignment and Acceptance assign its Revolving Commitment and
Advances to the Replacement Lender or Replacement Lenders (pro rata, if there is
more than one Replacement Lender, in proportion to the portion of the Terminated
Lender's Revolving Commitment and Advances to be assigned to each Replacement
Lender) indicated in the Notice of Termination and shall assign to the
Replacement Lender or Replacement Lenders all of its rights and obligations
under this Agreement, including, without limitation, each of its Advances then
outstanding and participation interest in Letters of Credit (if any) then
outstanding pro rata at a price equal to the unpaid principal amount thereon
plus interest and fees accrued and unpaid to the Termination Date, and (ii) the
Replacement Lender or Replacement Lenders will thereupon succeed to and be
substitute in all respects for the Terminated Lender with like effect as if
becoming a Lender pursuant to the terms of Section 9.03. For each assignment
made under this Section 2.13 the Replacement Lender shall pay to the
Administrative Agent the assignment fee provided for in Section 9.03(b). The
Company shall be responsible for payment of all breakage fees associated with
termination and Replacement Lenders, as set forth in Section 2.08. In the event
that the Company or the Administrative Agent requests that the Lenders consent
to a waiver of any provision of the Credit Documents or agree to any amendment
thereto, and at least the Majority Lenders have agreed to such consent or
amendment, then any Lender that does not agree to such consent or amendment
shall be a "Non-Consenting Lender".

 

Agents

. If the Agents cannot agree that any obligation of the Company or any Loan
Party is satisfied, the Administrative Agent shall refer the matter to the
Lenders for consideration, and such matter shall be definitively decided by
Majority Lenders.

Section 2.14    Applicable Lending Offices. Subject to subsection 2.01, each
Lender may book its Advances at any Applicable Lending Office selected by such
Lender and may change its Applicable Lending Office from time to time. All terms
of this Agreement shall apply to any such Applicable Lending Office and the
Advances and Notes issued hereunder shall be deemed held by each Lender for the
benefit of such Applicable Lending Office. Each Lender may, by written notice to
the Administrative Agent and the Company designate replacement or additional
Applicable Lending Offices through which Advances will be made by it and for
whose account repayments are to be made.

Section 2.15    Letters of Credit.

Issuance

. From time to time from the Closing Date until 91 days before the Maturity
Date, at the request of a Borrower, any Issuing Bank shall, on the terms and
conditions hereinafter set forth, issue, increase, or extend the expiration date
of Letters of Credit for the account of the Company or any of its Subsidiaries
on any Business Day. No Letter of Credit will be issued, increased, or extended:

 

if such issuance, increase, or extension would cause the Letter of Credit
Exposure to exceed (A) the lesser of (1) the aggregate Revolving Commitments and
(2) the Collateral Coverage Amount minus (B) the sum of the aggregate
outstanding principal amount of all Revolving Advances and the aggregate
outstanding principal amount of the Swingline Advances;

 

unless such Letter of Credit has an expiration date not later than one year
after the date of issuance thereof, provided that, any such Letter of Credit
with a one-year tenor may expressly provide that it is renewable at the option
of such Issuing Bank for additional one-year periods;

 

unless such Letter of Credit is (A) issued in a currency that is an Agreed
Currency and (B) is otherwise in form and substance acceptable to such Issuing
Bank;

 

unless such Borrower or Issuing Bank has delivered notice of such request for
and issuance of such Letter of Credit to the Administrative Agent no later than
three (3) Business Days prior to the Business Day on which such Letter of Credit
is to be issued, increased or extended;

 

if requested by such Issuing Bank, unless the Borrower has completed, executed
and delivered to the Issuing Bank the Issuing Bank's standard form letter of
credit application for letters of credit; and

 

unless such Letter of Credit is governed by the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, the International Standby Practices (ISP98), International
Chamber of Commerce Publication No. 590, or any successor to such publication.

If the terms of any letter of credit application referred to in the foregoing
clause (v) conflicts with the terms of this Agreement, the terms of this
Agreement shall control.

 

Participations

. Upon the date of the issuance or increase of a Letter of Credit occurring on
or after the Closing Date, such Issuing Bank shall be deemed to have sold to
each other Lender and each other Lender shall have been deemed to have purchased
from such Issuing Bank a participation in the related Letter of Credit
Obligations equal to such Lender's Pro Rata Share at such date and such sale and
purchase shall otherwise be in accordance with the terms of this Agreement. The
Issuing Bank shall promptly notify the Administrative Agent and each such
participant Lender by telex, telephone, or telecopy of each Letter of Credit
issued or increased and the actual dollar amount of such Lender's participation
in such Letter of Credit.

 

Reimbursement

. Each Borrower hereby agrees to pay on demand to any Issuing Bank in respect of
each Letter of Credit issued for its account an amount equal to any amount paid
by such Issuing Bank under or in respect of such Letter of Credit in the
currency of such Letter of Credit. Notwithstanding the foregoing sentence, if,
after the issuance of a Letter of Credit in any Agreed Currency other than
Dollars, currency control or exchange regulations are imposed in the country
which issues such currency with the result that the type of currency in which
the Letter of Credit was issued (the "Original Currency") no longer exists or
the Borrowers are not able to make payment to the Administrative Agent for the
account of any Issuing Bank or the Lenders in such Original Currency, then all
payments to be made by the Borrowers hereunder in such currency shall instead be
made when due in Dollars in an amount equal to the Dollar Amount (as of the date
of repayment) of such payment, it being the intention of the parties hereto that
the Borrowers take all risks of the imposition of any such currency control or
exchange regulations. In the event any Issuing Bank makes a payment pursuant to
a request for draw presented under a Letter of Credit and such payment is not
promptly reimbursed by the relevant Borrower upon demand, such Issuing Bank
shall give notice of such failure to pay to the Administrative Agent and the
Lenders, and each Lender shall reimburse such Issuing Bank for such Lender's Pro
Rata Share of the Dollar Amount of such payment on the same Business Day, and
such reimbursement shall be deemed for all purposes of this Agreement to
constitute a Borrowing comprised of Base Rate Advances to such Borrower from
such Lender. If such reimbursement is not made by any Lender to such Issuing
Bank on the same Business Day on which such Issuing Bank shall have made payment
on any such draw, such Lender shall pay interest thereon to such Issuing Bank at
a rate per annum equal to the Federal Funds Effective Rate. Each Borrower hereby
unconditionally and irrevocably authorizes, empowers, and directs the
Administrative Agent and the Lenders to record and otherwise treat such payment
under a Letter of Credit not immediately reimbursed by the Borrowers as a
Borrowing comprised of Base Rate Advances.

 

Obligations Unconditional

. The obligations of each Borrower under this Agreement in respect of each
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
notwithstanding the following circumstances:

any lack of validity or enforceability of any Letter of Credit Documents;

 

any amendment or waiver of or any consent to departure from any Letter of Credit
Documents;

 

the existence of any claim, set off, defense or other right which such Borrower
may have at any time against any beneficiary or transferee of such Letter of
Credit (or any Persons for whom any such beneficiary or any such transferee may
be acting), any Issuing Bank, any Lender or any other person or entity, whether
in connection with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated transaction;

 

any statement or any other document presented under such Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect to the extent any
Issuing Bank would not be liable therefor pursuant to the following paragraph
(f);

 

payment by any Issuing Bank under such Letter of Credit against presentation of
a draft or certificate which does not comply with the terms of such Letter of
Credit; or

 

any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing;

provided, however, that nothing contained in this paragraph (d) shall be deemed
to constitute a waiver of any remedies of a Borrower in connection with the
Letters of Credit.

 

Prepayments of Letters of Credit

. In the event that any Letter of Credit with an expiration date after the
Maturity Date shall be outstanding 91 days before the Maturity Date, on the 91st
day before the Maturity Date the Company shall pay to the Administrative Agent
an amount equal to 105% of the Letter of Credit Exposure allocable to such
Letter of Credit and in the currency of such Letter of Credit to be held in the
Cash Collateral Account and applied in accordance with paragraph (g) below. If
currency control or exchange regulations are imposed in the country which issues
such currency with the result that the Original Currency no longer exists or the
Borrowers are not able to make payment to the Administrative Agent for the
account of any Issuing Bank or the Lenders in such Original Currency, then all
payments to be made by the Borrowers hereunder in such currency shall instead be
made when due in Dollars in an amount equal to the Dollar Amount (as of the date
of repayment) of such payment, it being the intention of the parties hereto that
the Borrowers take all risks of the imposition of any such currency control or
exchange regulations.

 

Liability of Issuing Bank

. Each Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither any Issuing Bank nor any of its officers or directors shall be
liable or responsible for:

the use which may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith;

 

the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged;

 

payment by any Issuing Bank against presentation of documents which do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the relevant Letter of Credit; or

 

any other circumstances whatsoever in making or failing to make payment under
any Letter of Credit (including any Issuing Bank's own negligence),

except

that such Borrower shall have a claim against any Issuing Bank, and such Issuing
Bank shall be liable to, and shall promptly pay to, such Borrower, to the extent
of any direct, as opposed to consequential, damages suffered by such Borrower
which such Borrower proves were caused by (A) such Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
a Letter of Credit comply with the terms of such Letter of Credit or (B) such
Issuing Bank's willful failure to make lawful payment under any Letter of Credit
after the presentation to it of a draft and certificate strictly complying with
the terms and conditions of such Letter of Credit.

In furtherance and not in limitation of the foregoing, any Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.

 

Cash Collateral Account

.

If a Borrower is required to deposit funds in the Cash Collateral Account
pursuant to Sections 2.15(e), 2.15(h), 7.02(b) or 7.03(b), then such Borrower
and the Administrative Agent shall establish the Cash Collateral Account and
such Borrower shall execute any documents and agreements, including the
Administrative Agent's standard form assignment of deposit accounts, that the
Administrative Agent requests in connection therewith to establish the Cash
Collateral Account and grant the Administrative Agent an Acceptable Security
Interest in such account and the funds therein. The Company hereby pledges to
the Administrative Agent and grants the Administrative Agent a security interest
in the Cash Collateral Account, whenever established, all funds held in the Cash
Collateral Account from time to time, and all proceeds thereof as security for
the payment of the Obligations.

 

Funds held in the Cash Collateral Account shall be held as cash collateral for
obligations with respect to Letters of Credit and promptly applied by the
Administrative Agent at the request of such Issuing Bank to any reimbursement or
other obligations under Letters of Credit that exist or occur. To the extent
that any surplus funds are held in the Cash Collateral Account above the Letter
of Credit Exposure during the existence of an Event of Default the
Administrative Agent may (A) hold such surplus funds in the Cash Collateral
Account as cash collateral for the Obligations or (B) apply such surplus funds
to any Obligations in any manner directed by the Majority Lenders. If no Event
of Default exists, the Administrative Agent shall release to the Company at the
Company's written request any funds held in the Cash Collateral Account above
105% of the then current Letter of Credit Exposure.

 

Funds held in the Cash Collateral Account shall be invested in Liquid
Investments maintained with, and under the sole dominion and control of, the
Administrative Agent or in another investment if mutually agreed upon by the
Borrower and the Administrative Agent, but the Administrative Agent shall have
no other obligation to make any other investment of the funds therein. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.

 

Determination of Dollar Amounts

. The Administrative Agent will determine the Dollar Amount of the face amount
of or any drawing under each Letter of Credit denominated in a currency other
than Dollars on and as of the last Business Day of each quarter and on any other
Business Day elected by the Administrative Agent in its discretion or upon
instruction by the Majority Lenders. Each day upon or as of which the
Administrative Agent determines Dollar Amounts as described in the preceding
sentence is herein described as a "Computation Date" with respect to each Letter
of Credit for which a Dollar Amount is determined on or as of such day. If at
any time the Dollar Amount of the sum of the aggregate principal amount of all
outstanding Letter of Credit Obligations (calculated, with respect to those
Letter of Credit Obligations denominated in Agreed Currencies other than
Dollars, as of the most recent Computation Date) exceeds the Revolving
Commitments minus the sum of (i) the aggregate outstanding principal amount of
the Revolving Advances plus (ii) the aggregate outstanding principal amount of
the Swingline Advances, the Borrower shall immediately make deposits to the Cash
Collateral Account to the extent of the Collateral Shortfall Amount.

Section 2.16    Cash Management.

 

Company shall and shall cause each of its Domestic Subsidiaries which are
Guarantors and each Cayman Guarantor to (i) establish and maintain cash
management services of a type and on terms satisfactory to Agents at one or more
of the banks set forth on Schedule 2.16(a) (each a "Cash Management Bank"), and
shall request in writing and otherwise take such reasonable steps to ensure that
all of their and their Domestic Subsidiaries' (which are Guarantors) and each
Cayman Guarantor's Account Debtors forward payment of the amounts owed by them
directly to such Cash Management Bank, and (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all of their Collections (including those sent directly by
their Account Debtors to Borrowers or their Subsidiaries) into a bank account in
the Administrative Agent's name (a "Cash Management Account") at one of the Cash
Management Banks.

 

Each Cash Management Bank shall establish and maintain cash management
agreements with the Agents and the Company and its Domestic Subsidiaries which
are Guarantors and each Cayman Guarantor, in form and substance acceptable to
Agents (each a "Cash Management Agreement"). Each such Cash Management Agreement
shall provide, among other things, that (i) the Cash Management Bank will comply
with any instructions originated by Agents, acting jointly, directing the
disposition of the funds in such Cash Management Account without further consent
by Borrowers or their Subsidiaries, as applicable, (ii) the Cash Management Bank
has no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) it will, at all
times after the occurrence of a Cash Dominion Event upon written notice by the
Agents to the applicable Cash Management Bank, forward by daily sweep all
amounts in the applicable Cash Management Account to the Administrative Agent's
Account.

 

So long as no Default or Event of Default has occurred and is continuing,
Company may amend Schedule 2.16(a) to add or replace a Cash Management Bank or
Cash Management Account; provided, however, that (i) such prospective Cash
Management Bank shall be reasonably satisfactory to the Agents, and (ii) prior
to the time of the opening of such Cash Management Account, the Company or any
of its Domestic Subsidiaries which are Guarantors or either Cayman Guarantor, as
applicable, and such prospective Cash Management Bank shall have executed and
delivered to the Agents a Cash Management Agreement. The Company (or any of its
Domestic Subsidiaries which are Guarantors or the Cayman Guarantors, as
applicable) shall close any of their Cash Management Accounts (and establish
replacement cash management accounts in accordance with the foregoing sentence)
promptly and in any event within thirty (30) days of notice from Agents that the
creditworthiness of any Cash Management Bank is no longer acceptable in the
Agents' reasonable judgment, or as promptly as practicable and in any event
within sixty (60) days of notice from the Agents that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management
Bank with respect to Cash Management Accounts or the Agents' liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in the Agents' reasonable judgment.

 

The Cash Management Accounts shall be cash collateral accounts subject to
Control Agreements.

 

ARTICLE III

CONDITIONS PRECEDENT

Section 3.01    Conditions Precedent to Effectiveness. The effectiveness of this
Agreement is subject to the following conditions precedent:

Documentation

. The Administrative Agent and the Lenders shall have received the following,
each dated on or before the Closing Date, in form and substance satisfactory to
the Administrative Agent and the Lenders:

 

this Agreement, executed by the Borrowers, the Lenders and the Agents, and all
attached Exhibits and Schedules;

 

(A) a Revolving Note by the Company payable to the order of each Lender in the
amount of its Revolving Commitment as in effect on the Closing Date and (B) a
Revolving Note by the Mexican Borrower payable to the order of each Lender in an
amount equal to the lesser of $50,000,000 or 50% of such Lender's Revolving
Commitment as in effect on the Closing Date;

 

the Swingline Note executed by the Company;

 

Guaranties executed by each Guarantor;

 

except as otherwise provided in Section 5.16, amended and restated Security
Agreements granting to the Administrative Agent for the benefit of the Lenders a
lien in the Collateral to secure the Obligations, in each case together with
UCC-1 financing statements and any other documents, agreements, or instruments
necessary to create an Acceptable Security Interest in such pledged collateral;

 

except as otherwise provided in Section 5.16, certificates from the appropriate
Governmental Authority certifying as to the good standing, existence and
authority of each of the Loan Parties in all jurisdictions where reasonably
required by the Agents;

 

certificates from a Responsible Officer of the Company stating that (A) all
representations and warranties of the Loan Parties set forth in the Credit
Documents shall be true and correct in all material respects on and as of the
Closing Date with the same effect as if made on and as of the Closing Date; (B)
no Default has occurred and is continuing; and (C) the conditions in this
Section 3.01 have been met;

 

[Intentionally omitted];

 

a certificate from the Company's Chief Executive Officer, President or Chief
Financial Officer addressed to the Administrative Agent and each of the Lenders,
which shall be in form and in substance reasonably satisfactory to the
Administrative Agent and shall state that, subject to the qualifications stated
therein, after giving effect to the initial Borrowings contemplated under this
Agreement and the other Credit Documents, (i) the fair value and present fair
saleable value of the Company's and each of its Subsidiaries' assets exceed its
stated liabilities and identified Contingent Obligations; (ii) the Company and
each of its Material Subsidiaries should be able to pay their debts as they
become absolute and mature; and (iii) the Company and each of its Material
Subsidiaries will have sufficient capital to engage in its business as
management has indicated it is now conducted;

 

a certificate from the Company's Chief Executive Officer, President or Chief
Financial Officer addressed to the Administrative Agent and each of the Lenders,
which shall be in form and in substance reasonably satisfactory to the
Administrative Agent, certifying that as of the Closing Date the updated
Projections prepared by the Borrower and provided to the Administrative Agent
are true and correct in all material respects based upon the assumptions stated
therein and the best information reasonably available to such officer at the
time such Projections were made and shall describe any changes therein and state
that such changes shall not, individually or in the aggregate, reasonably be
expected to cause a Material Adverse Change to occur;

 

[Intentionally omitted];

 

a favorable opinion dated as of the Closing Date of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre L.L.P., counsel to the Company, in form and
substance reasonably satisfactory to the Administrative Agent; and

 

such other documents, governmental certificates and agreements as the
Administrative Agent and the Lenders may reasonably request.

 

Payment of Fees

. On the Closing Date, the Company shall have paid the fees required to be paid
to the Administrative Agent, the Collateral Monitoring Agent, the Arranger, and
the Lenders and all costs and expenses which have been invoiced and are payable
pursuant to Section 11.04.

 

Security Documents

. The Administrative Agent shall have received all appropriate evidence required
by the Agents in their discretion necessary to determine that arrangements have
been made for the Administrative Agent for the benefit of Lenders to have an
Acceptable Security Interest in the Collateral, including, without limitation,
(i) lien, tax and judgment searches conducted on the Company and the other Loan
Parties reflecting no Liens other than Permitted Liens against any of the
Collateral as to which perfection of a Lien is accomplished by the filing of a
financing statement other than in favor of the Administrative Agent for the
benefit of the Lenders and (ii) lien releases with respect to any Collateral
currently subject to a Lien other than Permitted Liens.

 

No Default

. No Default shall have occurred and be continuing or would result from such
Advance or from the application of the proceeds therefrom or from the issuance
of the initial Letters of Credit.

 

Representations and Warranties

. The representations and warranties contained in Article IV and in each other
Credit Documents shall be true and correct before and after giving effect to (i)
the initial Advances and to the application of the proceeds from such Advances
and (ii) the issuance of the initial Letters of Credit, in each case from the
date of such Advance or issuance, as applicable, as though made on and as of
such date.

 

No Material Adverse Change

. No event or events which, individually or in the aggregate, has had or is
reasonably likely to cause a Material Adverse Change shall have occurred.

 

No Proceeding or Litigation; No Injunctive Relief

. No action, suit, investigation or other proceeding (including, without
limitation, the enactment or promulgation of a statute or rule) by or before any
arbitrator or any Governmental Authority (other than the GTM Settlement) shall
be threatened or pending and no preliminary or permanent injunction or order by
a state or federal court shall have been entered in connection with this
Agreement or any transaction contemplated hereby or which, in any case, in the
reasonable judgment of the Administrative Agent, could reasonably be expected to
cause a Material Adverse Change.

 

Consents, Licenses, Approvals, etc

. The Agents shall have received true copies (certified to be such by the
Company or other appropriate party) of all consents, licenses and approvals
required, if any, from Governmental Authorities in accordance with applicable
law in connection with the execution, delivery, performance, validity and
enforceability of this Agreement and the other Credit Documents. In addition,
the Borrower and Subsidiaries shall have all material consents, licenses and
approvals required in connection with the continued operation of the Company and
its Subsidiaries, and such approvals shall be in full force and effect.

 

Revolving Commitment Availability

. On the Closing Date and immediately after giving effect to the initial
Borrowing and the transaction contemplated hereby, the Agents shall be satisfied
with the sufficiency of the unused availability under the aggregate Revolving
Commitments to meet the ongoing working capital needs of the Company and its
Subsidiaries after the Closing Date.

 

Additional Information

. The Agents shall have received such additional information which the Agents
shall have reasonably requested, and such information shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel.

Section 3.02    Conditions Precedent to Each Borrowing. The obligation of each
Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) or Convert to or Continue a Eurodollar Advance and the
obligation of such Issuing Bank to issue, extend or increase Letters of Credit
shall be subject to the further conditions precedent that on the Borrowing Date,
the date of Continuation or Conversion, or issuance, extension or increase date
of such Letters of Credit, the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or Notice of Conversion or
Continuation and the acceptance by a Borrower of the proceeds of such Advance or
the request for the issuance, extension or increase of a Letter of Credit shall
constitute a representation and warranty by such Borrower that on the date of
such Advance, the date of such Conversion or Continuation, or the date of such
issuance, extension or increase such statements are true):

the representations and warranties contained in Article IV and in each other
Credit Document are true and correct on and as of the date of such Advance,
Continuation or Conversion, or the issuance, extension or increase of such
Letter of Credit before and after giving effect to such Advance and to the
application of the proceeds from such Advance, such Continuation or Conversion,
or to the issuance, extension or increase of such Letter of Credit, as
applicable, as though made on, and as of such date; and

no Default has occurred and is continuing or would result from such Advance or
from the application of the proceeds therefrom or from such issuance, extension
or increase of such Letter of Credit.

Section 3.03    Determinations Under Section 3.01. For purposes of determining
compliance with the conditions specified in Section 3.01, 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 the Lenders unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Credit
Documents shall have received written notice from such Lender prior to the
Borrowings hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender's ratable portion of
such Borrowings.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Borrower jointly and severally represents and warrants as follows:

Section 4.01    Existence. Each of the Company and its Subsidiaries is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or formation and in good standing and
qualified to do business in each jurisdiction where its ownership or lease of
Property or conduct of its business requires such qualification and where a
failure to be qualified could reasonably be expected to cause a Material Adverse
Change.

Section 4.02    Power. The execution, delivery, and performance by the Company
and each of the other Loan Parties of this Agreement, the Notes, the other
Credit Documents to which each is a party and the consummation of the
transactions contemplated hereby and thereby (a) are within such Loan Party's
corporate or other powers, (b) have been duly authorized by all necessary
corporate or other action, (c) do not contravene (i) such Loan Party's
organizational documents or (ii) any law or any contractual restriction binding
on or affecting such Loan Party which could reasonably be expected to cause a
Material Adverse Change, and (d) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement. At the time of each Advance
or the issuance, extension or increase of each Letter of Credit, such Advance
and the use of the proceeds of such Advance or the issuance, extension or
increase of such Letter of Credit will be within the applicable Borrower's
corporate or other powers, will have been duly authorized by all necessary
corporate or other action, will not contravene (i) such Borrower's
organizational documents or (ii) any law or any contractual restriction binding
on or affecting such Borrower which could reasonably be expected to cause a
Material Adverse Change and will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.

Section 4.03    Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Company and each
of the other Loan Parties of this Agreement, the Notes, the other Credit
Documents to which each is a party or the consummation of the transactions
contemplated thereby. At the time of each Advance or the issuance, extension or
increase of each Letter of Credit, no authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority will be required
for such Advance or the use of the proceeds of such Advance or the issuance,
extension or increase of such Letter of Credit.

Section 4.04    Enforceable Obligations. This Agreement, the Notes, and the
other Credit Documents to which the Company and the other Loan Parties are a
party have been duly executed and delivered by the Company or such Loan Parties,
as applicable. Each Credit Document to which the Company or any of the other
Loan Parties is a party is the legal, valid, and binding obligation of the
Company and each such Loan Party and is enforceable against the Company and each
such Loan Party in accordance with its terms, except as such enforceability may
be limited by any applicable bankruptcy, insolvency, reorganization, moratorium,
or similar law affecting creditors' rights generally and by general principles
of equity (whether considered in a proceeding at law or in equity).

Section 4.05    Financial Statements.

The Company has delivered to the Agents the Financial Statements, and the
Financial Statements are accurate and complete in all material respects and
present fairly the consolidated financial condition of the Company as of their
respective dates and for their respective periods in accordance with GAAP. As of
the date of the Financial Statements, there were no material Contingent
Obligations, liabilities for taxes, unusual forward or long term commitments, or
unrealized or anticipated losses of the Company or any of its Subsidiaries,
except as disclosed therein and adequate reserves for such items have been made
in accordance with GAAP.

 

Since December 31, 2003, no Material Adverse Change has occurred.

Section 4.06    True and Complete Disclosure. All factual information (whether
delivered before or after the Closing Date) furnished by or on behalf of the
Company and its Subsidiaries in writing to the Administrative Agent and the
Lenders for purposes of or in connection with this Agreement, any other Credit
Document or any transaction contemplated hereby or thereby is true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time.

Section 4.07    Litigation; Compliance with Laws.

Except for the GTM Settlement, there is no pending or threatened action or
proceeding affecting the Company or any of its Subsidiaries before any court,
Governmental Authority or arbitrator, which could reasonably be expected to
cause a Material Adverse Change or which purports to affect the legality,
validity, binding effect or enforceability of this Agreement, any Note, or any
other Credit Document. Additionally, there is no pending or threatened action or
proceeding instituted against the Company or any of its Subsidiaries which seeks
to adjudicate the Company or any of its Subsidiaries as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its Property.

 

The Company and its Subsidiaries have complied in all material respects with all
material statutes, rules, regulations, orders and restrictions of any
Governmental Authority having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. The Company and its
Subsidiaries are in compliance in all material respects with the International
Maritime Organization's International Management Code for the Safe Operation of
Ships and Pollution Prevention ("ISM Code"), to the extent applicable, and have
established and implemented a safety management system and such other procedures
as required by the ISM Code, to the extent applicable.

Section 4.08    Use of Proceeds. The proceeds of the Advances will be used by
the Borrowers and their Subsidiaries for the purposes described in Section 5.08.
The Company and its Subsidiaries are not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U). No proceeds of any Advance will be used to purchase or
carry any margin stock in violation of Regulation T, U or X.

Section 4.09    Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

Section 4.10    Public Utility Holding Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", or a "public utility", as such terms are used
in the Public Utility Holding Company Act of 1935, as amended.

Section 4.11    Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Company or any member of the
Controlled Group (hereafter collectively called the "Tax Group") have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed (except where any
obligation to so file is being contested in good faith and by appropriate
proceedings and after adequate reserves have been provided therefor), and all
taxes (which are material in amount) and other impositions due and payable have
been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings and after providing
adequate reserves therefor. None of the Company nor any member of the Tax Group
has given, or been requested to give, a waiver of the statute of limitations
relating to the payment of any federal, state, local or foreign taxes or other
impositions which are material in amount. None of the Property owned by the
Company or any other member of the Tax Group is Property which the Company or
any member of the Tax Group is required to treat as being owned by any other
Person pursuant to the provisions of Section168(f)(8) of the Code. Proper and
accurate amounts have been withheld by the Company and all other members of the
Tax Group from their employees for all periods to comply in all material
respects with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law. Timely payment of all
material sales and use taxes required by applicable law have been made by the
Company and all other members of the Tax Group.

Section 4.12    Pension Plans. No Termination Event has occurred with respect to
any Plan, and, except for any failure that could not reasonably be expected to
cause a Material Adverse Change, each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred with respect to any Plan and there has been
no excise tax imposed with respect to any Plan under Section4971 of the Code.
The present value of all benefits vested under each Plan (based on the
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed the value of the assets of such Plan allocable
to such vested benefits in any amount that would reasonably be expected to cause
a Material Adverse Change. None of the Company nor any member of the Controlled
Group has had a complete or partial withdrawal from any Multiemployer Plan for
which there is any unpaid withdrawal liability that could reasonably be expected
to cause a Material Adverse Change. As of the most recent valuation date
applicable thereto, none of the Company nor any member of the Controlled Group
has received notice that any Multiemployer Plan is insolvent or in
reorganization. Based upon GAAP existing as of the Closing Date and current
factual circumstances, the Company has no reason to believe that the annual cost
during the term of this Agreement to the Company or any of its Subsidiaries for
post-retirement benefits to be provided to the current and former employees of
the Company or any of its Subsidiaries under welfare benefit plans (as defined
in Section3(1) of ERISA) could, in the aggregate, reasonably be expected to
cause a Material Adverse Change.

Section 4.13    Condition of Property; Casualties. The material Properties used
or to be used in the continuing operations of the Company and each of its
Subsidiaries are (a) in substantially the same or better repair, working order,
and condition as such Properties were as of December 31, 2003, normal wear and
tear excepted and (b) in such repair, working order and condition to permit the
Company and its Subsidiaries to operate such Properties in substantially the
same or better manner as operated as of December 31, 2003. Since the Closing
Date, neither the business nor the material Properties of the Company and each
of its Subsidiaries has been affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by a Governmental Authority, riot, activities
of armed forces or acts of God or of any public enemy, which effect would
reasonably be expected to cause a Material Adverse Change.

Section 4.14    Insurance. The Company and its Subsidiaries are insured by
reputable insurers in respect of such of their respective Properties, in such
amounts and against such risks as is customarily maintained by other Persons of
similar size engaged in similar businesses or, self insure to the extent that is
customary for Persons of similar size engaged in similar businesses.

Section 4.15    No Burdensome Restrictions; No Defaults.

Neither the Company nor any of its Subsidiaries is a party to any indenture,
loan or credit agreement or any lease or other agreement or instrument or
subject to any charter or corporate restriction or provision of applicable law
or governmental regulation which would reasonably be expected to cause a
Material Adverse Change. Neither the Company nor any of its Subsidiaries is in
default under or with respect to any contract, agreement, lease or other
instrument to which the Company or such Subsidiary is a party and which would
reasonably be expected to cause a Material Adverse Change. Neither the Company
nor any of its Subsidiaries has received any notice of default under any
contract, agreement, lease or other instrument to which the Company or its
Subsidiaries is a party which is continuing or which, if not cured, would
reasonably be expected to cause a Material Adverse Change.

 

No Default has occurred and is continuing.

Section 4.16     Environmental Condition. Except as disclosed on the attached
Schedule 4.16:

The Company and its Subsidiaries have obtained all material Environmental
Permits necessary for the ownership and operation of their respective material
Properties and the conduct of their respective businesses; have been and are in
compliance with all material terms and conditions of such Environmental Permits
and with all other material requirements of applicable Environmental Laws; have
not received notice of any material violation or alleged violation of any
Environmental Law or Environmental Permit by the Company or any of its
Subsidiaries; and are not subject to any material actual or contingent
Environmental Claim.

 

None of the present or previously owned or operated Properties of the Company or
of any of its present or former Subsidiaries, wherever located, has been placed
on or proposed to be placed on the National Priorities List, the Comprehensive
Environmental Response Compensation Liability Information System list, the RCRA
Corrective Action List, or their state or local analogs, nor has the Company
been otherwise notified of the designation, listing or identification of any
Property of the Company or any of its present or former Subsidiaries as a
potential site for removal, remediation, cleanup, closure, restoration,
reclamation, corrective action, or other response activity under any
Environmental Laws (except as such activities may be required by permit
conditions); is subject to a Lien, arising under or in connection with any
Environmental Laws, that attaches to any revenues or to any Property owned or
operated by the Company or any of its present or former Subsidiaries, wherever
located; or (C) has been the site of any Release of Hazardous Substances or
Hazardous Wastes from present or past operations which has caused at the site or
at any third party site any condition that has resulted in or would reasonably
be expected to result in the need for Response that would cause a Material
Adverse Change and none of the Company or any of their present or former
Subsidiaries has generated or transported or has caused to be generated or
transported Hazardous Substances to any third party site which would reasonably
be expected to result in the need for Response that would cause a Material
Adverse Change.

Section 4.17    Title to Property, Etc.

Each of the Company and its Subsidiaries has good and marketable title in all
its Property, except where the failure to have such good and marketable title
would not reasonably be expected to cause a Material Adverse Change, and none of
such Property is subject to any Lien, except Permitted Liens.

 

Schedule 4.17 sets forth (i) all the Mortgaged Vessels of the Company and its
Subsidiaries on the Closing Date and identifies the registered owner, flag,
official or patent number of each Mortgaged Vessel, as the case may be, on the
Closing Date and all of the Material Vessels on the Closing Date are Mortgaged
Vessels except for the GP 35, GP37, MV Shamal and MV Selatan, and (ii) all real
estate of the Company and its Subsidiaries subject to a Mortgage.

Section 4.18    Security Interests. On the Closing Date, all governmental
actions and all other filings, recordings, registrations, third party consents,
and other actions which are necessary to create and perfect the Liens provided
for in the Security Documents will have been made, obtained, and taken in all
relevant jurisdictions, or satisfactory arrangements will have been made for all
governmental actions and all other filings, recordings, registrations, third
party consents, and other actions which are necessary to create and perfect the
Liens provided for in such Security Documents to be made, obtained, or taken in
all relevant jurisdictions. Upon the filing of the Security Documents referred
to in this Section 4.18, on the Closing Date each of the Security Documents
creates, as security for the Obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto, to the extent perfection of a security interest or
Lien is governed by Article 9 of the UCC (as defined in the applicable Security
Documents), and subject to no other Liens (other than Permitted Prior Liens) in
favor of the Administrative Agent for the ratable benefit of the Agents and the
Lenders. No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made upon or prior to (or are the subject of arrangements, satisfactory to the
Agents, for filing on or promptly after the date of) the execution and delivery
thereof.

Section 4.19    Subsidiaries; Corporate Structure. The Subsidiaries of the
Company listed on Schedule 4.19 constitute all of the Subsidiaries of the
Company on the Closing Date. Schedule 4.19 correctly lists the names, ownership,
jurisdictions of incorporation or formation of each of the Company's
Subsidiaries as of the Closing Date.

Section 4.20    Citizenship. Each Loan Party which owns a Material Vessel is
qualified to own and operate such Material Vessel under the laws of the
jurisdiction in which any such Material Vessel is flagged.

Section 4.21    Labor Relations. None of the Company nor its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Change. There is (a) no unfair labor practice complaint pending
against the Company or any of its Subsidiaries or, to the knowledge of any
Responsible Officer, threatened against any of them, before the National Labor
Relations Board (or any successor United States federal agency that administers
the National Labor Relations Act), and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its Subsidiaries or, to the knowledge of any
Responsible Officer, threatened against any of them, (b) no strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
Subsidiaries or, to the knowledge of any Responsible Officer, threatened against
the Company or any of its Subsidiaries and (c) no union representation petition
existing with respect to the employees of the Company or any of its Subsidiaries
and no union organizing activities are taking place, except with respect to any
matter specified in clause (a), (b) or (c) above, either individually or in the
aggregate, such as could not reasonably be expected to have a Material Adverse
Change.

Section 4.22    Intellectual Property. As of the Closing Date, the Company and
each of its Subsidiaries does not own or license any patents, trademarks,
service marks, trade names, copyrights, licenses and other intellectual property
rights, that are necessary for the operation of their businesses taken as a
whole as presently conducted.

Section 4.23    Solvency.

Immediately after the consummation of the transactions to occur on the Closing
Date and after giving effect to the Borrowings contemplated under this Agreement
and the application of the proceeds thereof, the fair value of the assets of the
Company and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of the
Company and its Subsidiaries on a consolidated basis; the present fair saleable
value of the Property of the Company and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Company and its Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; the Company and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and the Company and its Subsidiaries on
a consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.

 

The Company does not intend to, or to permit any of its Subsidiaries to, and
does not believe that it or any of its Subsidiaries will, on a consolidated
basis, incur debts beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Debt or the Debt of such Subsidiary.

 

ARTICLE V

AFFIRMATIVE COVENANTS

        So long as the Notes or any amount under any Credit Document shall
remain unpaid, any Lender shall have any Commitment hereunder, or there shall
exist any Letter of Credit Exposure, each Borrower agrees, unless the Majority
Lenders otherwise consent in writing, to comply with the following covenants.

Section 5.01    Compliance with Laws, Etc. Each of the Company and its
Subsidiaries will comply with all Legal Requirements except where the failure to
so comply could not reasonably be expected to cause a Material Adverse Change.
Without limiting the generality and coverage of the foregoing, each of the
Company and its Subsidiaries shall comply with all applicable Environmental
Laws, and all laws, regulations, or directives with respect to equal employment
opportunity and employee safety in all jurisdictions in which the Company and
its Subsidiaries do business including, if applicable, the ISM Code, except
where the failure to so comply could not reasonably be expected to cause a
Material Adverse Change.

Section 5.02    Maintenance of Insurance.

Generally

. The Company shall, and shall cause each of its Subsidiaries to,

at their own expense, maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar Properties in the same general areas in which the Company and its
Subsidiaries operate;

 

at their own expense, insure each Material Vessel and keep her insured, or cause
each Material Vessel to be insured, in lawful money of the United States in the
manner set forth herein;

 

renew all such Insurance Policies as they expire and so as to ensure that there
is no gap in coverage, and shall provide evidence of such renewal in writing to
the Agents as and when each such renewal is effected;

 

punctually pay all premiums, calls, contributions or other sums payable in
respect of such Insurance Policies and produce all relevant receipts when so
required by the Agents and all insurance policies shall provide that there shall
be no recourse against Agents for unpaid premiums or calls;

 

arrange for the execution of such guarantees as may from time to time be
required by any protection and indemnity (or its equivalent) or war risks
association; and

 

upon the written request of the Administrative Agent or Collateral Monitoring
Agent, provided no such request shall be made more frequently than once per
year, deliver to the Agents copies of all cover notes, binders and certificates
of entry and all endorsements and riders supplemental thereto in respect of
insurance maintained under this Section 5.02.

 

Administrative Agent as Additional Insured

.

All insurance policies, binders and other interim insurance contracts (except
for workers' compensation, employees' liability and Protection and Indemnity
Risks policies) shall provide that the Administrative Agent shall be an
additional insured in connection with any liabilities arising out of or
resulting from the operations or the business of the Company or any of its
Subsidiaries, or a loss payee, as applicable, in respect of any Net Cash
Proceeds in excess of $500,000.00, and shall provide for at least thirty days'
(or, in the case of war, seventy-two (72) hours') prior notice to be given to
the Administrative Agent by the underwriters or association in the event of
cancellation and at least ten days' prior notice with respect to any failure of
the applicable Loan Party to pay any premium or call which would suspend
coverage under the policy or the payment of a claim thereunder. In addition, all
policies of insurance required under the terms hereof shall contain an
endorsement or agreement by the insurer that any loss shall be payable in
accordance with the terms of such policy notwithstanding any act of negligence
of the applicable Loan Party or any party holding under such Loan Party which
might otherwise result in a forfeiture of the insurance and the further
agreement of the insurer waiving all rights of setoff, counterclaim or
deductions against such Loan Party.

In the event that any claim or Lien is asserted against any Mortgaged Vessel for
loss, damage or expense which is covered by insurance hereunder, and it is
necessary for any Loan Party to obtain a bond or supply other security to
prevent the arrest of such Mortgaged Vessel or to release the Mortgaged Vessel
from arrest on account of such claim or Lien, the Administrative Agent may, in
the sole discretion of the Administrative Agent, and upon notice to the
applicable Loan Party, assign to any Person executing a surety or guaranty bond
or other agreement to save or release any such Mortgaged Vessel from such
arrest, all right, title and interest of the Administrative Agent and the other
Lenders in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.

The Administrative Agent shall give the Company's independent maritime insurance
broker notice of the occurrence of any Event of Default (and subsequent notice
of its cure or waiver, if applicable).

Application of Payments under Insurance Policies

.

Prior to the occurrence and continuance of an Event of Default, all Insurance
Policies or certificates of insurance shall provide that all insurance payments
in respect of any Casualty Event involving any Net Cash Proceeds in excess of
$500,000.00 shall be paid to the Administrative Agent or, upon the prior written
consent of the Administrative Agent, the underwriter may pay such amounts
directly to the applicable Loan Party or such Person as may be designated by the
applicable Loan Party for the repair, salvage or other charges relating to such
Casualty Event. Unless the Borrowers are required to make a mandatory prepayment
pursuant to Section 2.07(c), then the Administrative Agent shall disburse the
proceeds to the applicable Loan Party for the purpose of repairing, replacing,
and restoring the damaged collateral.

Notwithstanding anything to the contrary in the other Credit Documents, all
insurance payments in respect of any liability of the Loan Parties to third
Persons or damage to Property of third Persons by the Loan Parties shall be paid
by the underwriter of such insurance directly to the Person to whom such
liability is owed or directly to the Loan Parties to reimburse it for any loss,
damage or expense incurred by it in connection with the event or condition
giving rise to such liability.

In the event of a Total Loss, a Material Partial Loss or a Casualty Event
occurring after the occurrence and during the continuance of an Event of
Default, all insurance payments therefor shall be paid to the Administrative
Agent. All insurance payments received by the Administrative Agent as the result
of a Total Loss, a Material Partial Loss or such Casualty Event shall be applied
by the Administrative Agent in the manner provided for in Section 2.07(c), or
retain the proceeds and apply such proceeds as provided for in Section 7.06 or
disburse the proceeds to the applicable Loan Party for the purpose of repairing,
replacing, and restoring the damaged collateral, as applicable. If an Event of
Default is not then continuing, then any excess proceeds after making any
required payments pursuant to Section 2.07(c) shall be paid to the Company or
any Loan Party as appropriate. In the event that any such proceeds are paid to
any Loan Party in violation of the foregoing, such Loan Party shall hold the
proceeds in trust for the Administrative Agent, segregate the proceeds from the
other funds of such Loan Party, and promptly pay the proceeds to the
Administrative Agent with any necessary endorsement. Upon the request of the
Administrative Agent, after the occurrence and during the continuance of an
Event of Default, the Loan Parties shall execute and deliver to the
Administrative Agent any additional assignments and other documents as may be
necessary or desirable to enable the Administrative Agent to directly collect
the proceeds.

 

Hull and Machinery/Increased Value Insurance

. With respect to hull and machinery/increased value insurance, including War
Risks, each Loan Party owning the same shall insure each Mortgaged Vessel and
keep her insured, or cause each Mortgaged Vessel to be insured against loss,
damage, fire and such other perils as are customary in the industry, for an
amount which is at least equal to the agreed insured value of such Mortgaged
Vessel. In addition, the Loan Parties shall, at their own expense, furnish to
the Administrative Agent a mortgagee's single interest policy (or in lieu of
such mortgagee's interest insurance the applicable Loan Party shall cause the
hull and machinery/increased value insurance to be endorsed to afford breach of
warranty coverage for the benefit of the Administrative Agent and the Lenders)
providing coverage which, when aggregated with the amount of such insurance
coverage on the other Mortgaged Vessels, shall be at least 140% of the aggregate
Revolving Commitments. Such insurance shall cover marine and War Risk perils
against confiscation, expropriation, seizure and other war risks, on hull and
machinery, and shall be maintained in the broadest forms available (on
reasonable commercial terms as the applicable Loan Party shall see fit and
reasonably acceptable to the Administrative Agent) in the American and British
insurance markets or in such other major international markets acceptable to the
Administrative Agent.

 

Operation of Mortgaged Vessels

.

Each Mortgaged Vessel shall not operate in or proceed into any area then
excluded by trading warranties under its marine or war risk policies (including
protection and indemnity or its equivalent) without satisfying the conditions of
the relevant policies, evidence of which shall be furnished to the Agents.

 

The Loan Parties shall not employ any Mortgaged Vessel or suffer any Mortgaged
Vessel to be employed otherwise than in conformity with the terms of the
instruments of Insurance Policies aforesaid relative to the Mortgaged Vessel
(including any warranties, express or implied, therein) without first obtaining
the consent to such employment of the insurers and complying with such
requirements as to extra premium or otherwise as the insurers may prescribe.

 

To the extent any of the following could reasonably be expected to cause a
Material Adverse Change, the Loan Parties shall not commit any act, nor
voluntarily suffer nor permit any act to be done, whereby any insurance required
hereunder shall or may be suspended, impaired or defeated and will not suffer
nor permit any Mortgaged Vessel to engage in any voyage, nor to engage in any
employment not permitted under the policies of insurance in effect, without
first covering any Mortgaged Vessel with insurance satisfactory in all respects,
including the amount thereof, to the Administrative Agent for the voyage or the
employment.

 

United States Operations

. At all times during which any Mortgaged Vessel is operating within the
jurisdiction of the United States of America, the Loan Parties shall maintain:

insurance or post bond or maintain approved evidence of financial responsibility
with respect to such Mortgaged Vessel to cover the actual cost of removal of
discharged oil for which the owner thereof may be held strictly liable (or held
liable due to negligence of such Loan Party or any other Person) under the Clean
Water Act of 1977, as amended, the Oil Pollution Act of 1990, as amended, or the
Outer Continental Shelf Lands Act, as amended, or under any other federal, state
or international law that, now or in the future, may apply to such Mortgaged
Vessel or to the owner thereof; and the applicable Loan Party shall maintain
insurance or post bond or maintain approved evidence of financial responsibility
covering similar pollution risks or liabilities incident thereto under any law,
regulation or judicial decision of any foreign jurisdiction or jurisdictions or
political subdivision thereof applicable to the owner, such Mortgaged Vessel or
its operations; and

 

such worker's compensation or longshoremen's and harbor workers' insurance as
shall be required by applicable law, including endorsements for foreign and
Outer Continental Shelf operations, borrowed servant, voluntary compensation and
in rem claims.

 

Section 5.03    Preservation of Existence, Etc. Except as permitted by Section
6.03, each of the Company and each of its Subsidiaries will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its formation, and qualify and remain qualified in each jurisdiction in which
qualification is necessary or desirable in view of its business and operations
or the ownership of its Properties and where failure to qualify could reasonably
be expected to cause a Material Adverse Change.

Section 5.04    Payment of Taxes, Etc. Each of the Company and each of its
Subsidiaries will pay and discharge before the same shall become delinquent, (a)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or Property that are material in amount, prior to the
date on which penalties attach thereto and (b) all lawful claims of Governmental
Authorities that are material in amount which, if unpaid, might by law become a
Lien upon its Property; provided, however, that the Company and its Subsidiaries
shall not be required to pay or discharge any such tax, assessment, charge,
levy, or claim which is being contested in good faith and by appropriate
proceedings, and with respect to which reserves, if required in conformity with
GAAP, have been provided.

Section 5.05    Reporting Requirements. The Company will furnish to the
Administrative Agent for distribution to the Lenders (with sufficient copies for
each Lender to receive a copy from the Administrative Agent) except as otherwise
set forth below:

Defaults

. As soon as possible and in any event within five Business Days after the
occurrence of a Default becomes known to a Responsible Officer of a Borrower
which is continuing on the date of such statement, a statement of a Responsible
Officer of such Borrower setting forth the details of such Default and the
actions which such Borrower has taken and proposes to take with respect thereto;

 

Monthly and Quarterly Financials

. As soon as available, but in any event within 30 days (45 days in the case of
a month that is the end of one of Company's fiscal quarters) after the end of
each month during each of Company's fiscal years, an unaudited consolidated
balance sheet, income statement, and statement of cash flow covering Company's
and its Subsidiaries' operations during such period. As soon as available and in
any event not later than 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the unaudited consolidated and
consolidating balance sheet, statements of operations, and cash flows for the
periods then ended and for the period commencing at the end of the previous year
and ending with the end of such fiscal quarter, all in reasonable detail and
duly certified with respect to such statements (subject to year end audit
adjustments) by an authorized financial officer of the Company as having been
prepared in accordance with GAAP;

 

Audited Annual Financials

. As soon as available and in any event not later than 90 days after the end of
each fiscal year of the Company, copies of the annual audited financial
statements for such year for the Company, including therein the consolidated
balance sheet of the Company as of the end of such fiscal year and consolidated
statements of operations, changes in shareholders' equity and cash flows for
such fiscal year, in each case certified by independent certified public
accountants of nationally recognized standing together with a certificate of
such accounting firm to the Administrative Agent and the Lenders stating that,
in the course of the regular audit of the business of the Company, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof;

 

Compliance Certificates

. (i) Within 45 days of each fiscal quarter end of the Company for the first
three fiscal quarters of each fiscal year of the Company and (ii) within 90 days
of each fiscal year end of the Company, a Compliance Certificate for such fiscal
quarter or fiscal year then ended indicating compliance with Sections 6.13
through 6.19;

 

Vessel Reports; Material Subsidiaries

. On or before 30 days after the end of each fiscal quarter of each fiscal year
of the Company, (i) a report detailing (A) the flag, the then current location
of each of the Mortgaged Vessels and other Material Vessels owned or leased by
the Company and its Subsidiaries, and the then current status (operating or
idle) of such vessel, (B) which of the Mortgaged Vessels and other Material
Vessels are in dry-dock, (C) vessel utilization and (ii) a list of each of the
Material Subsidiaries and any Subsidiary of the Company that will become a
Material Subsidiary on or before the next report is required to be delivered;

 

Collections

. Upon and after a Cash Dominion Event, such reports as the Collateral
Monitoring Agent shall request to enable each Cash Management Bank to segregate
that portion of the Collections representing amounts attributable to any taxes
or fees due to a Governmental Authority as well as that portion of the
Collections representing amounts constituting senior collateral of any third
party, or to a surety with respect to payments received under a bonded
construction contract and as to which the surety may have a claim of entitlement
senior to Administrative Agent's Liens, and such other Collections as
Administrative Agent may, in its sole discretion, designate.

 

Other Creditors

. The Company shall provide promptly and in any event within five Business Days
after the giving or receipt thereof, copies of any material notices,
information, and documents given or received by any Loan Party pursuant to the
terms of any indenture, loan agreement, credit agreement, or similar agreement
relating to Debt of $5,000,000.00 or more;

 

Securities Law Filings

. Promptly and in any event within 15 days after the sending or filing thereof,
copies of all proxy material, reports and other information which the Company or
any of its Subsidiaries files with the SEC;

 

Termination Events

. As soon as possible and in any event (i) within 30 days after the Company or
any of its Subsidiaries knows or has reason to know that any Termination Event
described in clause (a) of the definition of Termination Event with respect to
any Plan has occurred, and (ii) within 10 days after the Company or its
Subsidiaries knows or has reason to know that any other Termination Event with
respect to any Plan has occurred, a statement of a senior financial officer of
the Company or such Subsidiary describing such Termination Event and the action,
if any, which the Company or such Subsidiary proposes to take with respect
thereto;

 

Termination of Plans

. Promptly and in any event within ten Business Days after receipt thereof by
the Company or any member of the Controlled Group from the PBGC, copies of each
notice received by the Company or any such member of the Controlled Group of the
PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan;

 

Other ERISA Notices

. Promptly and in any event within five Business Days after receipt thereof by
the Company or any member of the Controlled Group from a Multiemployer Plan
sponsor, a copy of each notice received by the Company or any member of the
Controlled Group concerning the imposition of withdrawal liability pursuant to
Section 4202 of ERISA in an amount that could reasonably be expected to cause a
Material Adverse Change;

 

Disputes, etc

. Prompt written notice of any claims, proceedings, or disputes, or to the
knowledge of the Company and its Subsidiaries threatened, or affecting the
Company or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to cause a Material Adverse Change;

 

Material Changes

. Prompt written notice of any condition or event of which the Company or any of
its Subsidiaries has knowledge, which condition or event has resulted or may
reasonably be expected to result in a Material Adverse Change;

 

Environmental Notices

. Promptly upon the receipt thereof by the Company or any of its Subsidiaries, a
copy of any form of notice, summons or citation received from any Governmental
Authority or any other third party, concerning (i) violations or alleged
violations of Environmental Laws, which seeks to impose liability therefor in
excess of $5,000,000.00, (ii) any action or omission on the part of the Company
or any of its Subsidiaries in connection with Hazardous Waste or Hazardous
Substances which could result in a liability therefor in excess of
$5,000,000.00, (iii) any notice of potential responsibility under CERCLA or any
analogous law which could result in a liability therefor in excess of
$5,000,000.00, or (iv) concerning the filing of a Lien other than a Permitted
Lien upon, against or in connection with the Company or any of its Subsidiaries,
or any of their leased or owned Property with a value of more than
$5,000,000.00, wherever located;

 

Insurance

. On or before April 15 of each year commencing April 15, 2004, the Company will
deliver a report prepared by the Company's independent maritime insurance broker
which report lists all insurance policies and programs then in effect with
respect to the Mortgaged Vessels, specifies for each such policy and program,
(A) the amount thereof, (B) the risks insured against thereby, (C) the name of
the insurer and each insured party thereunder and (D) the policy or other
identification number thereof, and certifies that all such policies and programs
are (A) in full force and effect, (B) are placed with such insurance companies,
underwriters or associations, in such amounts, against such risks, and in such
form, as are customarily issued against by Persons of similar size and
established reputation engaged in the same or similar businesses and similarly
situated and as are necessary or advisable for the protection of the
Administrative Agent as mortgagee, and (C) conform with the requirements of this
Agreement and the Security Documents;

 

Financial Projections

. As soon as available, but in any event within 60 days following the start of
each of Company's fiscal years, copies of Company's Projections, in form and
substance (including as to scope and underlying assumptions) satisfactory to the
Administrative Agent, in its Permitted Discretion, for the forthcoming two (2)
years, year by year, and for the forthcoming fiscal year, month by month,
certified by the chief financial officer of Company as being such officer's good
faith estimate of the financial performance of Company and its Subsidiaries
during the period covered thereby.

 

Collateral Reporting

. Provide Administrative Agent (with copies for each Lender, if so requested)
with the following documents at the following times in form satisfactory to the
Agents:

Monthly (not later than the 20th day of each month): (A) a calculation of the
Collateral Coverage Amount as of such date, (B) a detailed aging of the Accounts
of the Company and its Subsidiaries together with a reconciliation to the
general ledger, (C) notice of all material claims, offsets, or disputes asserted
by Account Debtors with respect to Company's and its Subsidiaries Accounts and
(D) such other reports as to the Collateral or the financial condition of the
Company and its Subsidiaries, as the Agents may reasonably request; and

 

Quarterly (not later than the 45th day after the end of each fiscal quarter):
(A) a report in form and substance satisfactory to Collateral Monitoring Agent,
detailing the back-log of Company's and Subsidiaries contracts on a customer by
customer basis, (B) an update of the most recent fiscal year Projections, (C) a
report regarding each Borrower's and each of its Subsidiaries' accrued, but
unpaid, ad valorem taxes, (D) a detailed accounts payable aging by vendor of the
Company and its Subsidiaries together with a reconciliation to the general
ledger, (E) such other reports as to the Collateral or the financial condition
of the Company and its Subsidiaries, as the Agents may reasonably request and
(F) a report of the outstanding bond obligations and performance guaranties;

 

Intellectual Property

. Prompt written notice of the acquisition or license of any patents,
trademarks, service marks, trade names, copyrights, licenses and other
intellectual property rights, that are necessary for the operation of their
businesses taken as a whole as presently conducted and within 30 days thereof,
execute and deliver to the Administrative Agent such documents required to
acknowledge or register or perfect an Acceptable Security Interest in such
intellectual property rights;

 

Deemed Dividend

. If any "deemed dividend" tax liability is incurred, a prompt written report
detailing such tax liabilities; and

 

Other Information

. Such other information respecting the business or Properties, or the condition
or operations, financial or otherwise, of the Company and its Subsidiaries as
the Administrative Agent, Collateral Monitoring Agent or any Lender may from
time to time reasonably request.

Section 5.06    Maintenance of Property. Each of the Company and its
Subsidiaries shall maintain their material owned, leased, or operated property,
equipment, buildings and fixtures in substantially the same or better condition
and repair as the condition and repair as of December 31, 2003, normal wear and
tear excepted and not knowingly or willfully permit the commission of waste or
other injury, or the release of Hazardous Substances on or about the owned or
operated property in violation of applicable Environmental Laws.

Section 5.07    Inspection. From time-to-time upon reasonable notice and during
normal business hours, the Company and its Subsidiaries shall (a) permit Agents
(at the request of any Lender), no more frequently than three (3) times per
calendar year (unless an Event of Default has occurred and is continuing), to
examine and copy their books and records, (b) permit the Agents and the Lenders
to visit and inspect their Properties and to check, test, and appraise the
Collateral, or any portion thereof, in order to verify Borrowers' and their
Subsidiaries' financial condition or the amount, quality, value, condition of,
or any other matter relating to, the Collateral, and (c) permit the Agents and
Lenders to discuss the business operations and Properties of the Company and its
Subsidiaries with their officers and directors.

Section 5.08    Use of Proceeds. The Borrowers shall use the proceeds of
Advances for Capital Expenditures, general corporate purposes of the Company and
its Subsidiaries, including, without limitation, making Acquisitions permitted
by Section 6.18 of this Agreement and the payment of the GTM Settlement. The
Borrowers will not engage in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U).

Section 5.09    Nature of Business. The Company shall, and shall cause each of
its Subsidiaries to, not engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, would then be
substantially changed from the general nature of the business engaged in by the
Company and its Subsidiaries on the Closing Date.

Section 5.10    Books and Records. The Company will keep, and will cause each of
its Subsidiaries to keep, adequate records and books of account in which
complete entries will be made in accordance with GAAP (subject to year-end
adjustments), reflecting all financial transactions of such Person. The Company
shall maintain or cause to be maintained a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP, and each of the financial
statements described herein shall be prepared from such system and records.

Section 5.11    New Subsidiaries.

As soon as possible and in any event no later than 30 days after the end of each
fiscal quarter in which any of the following events occur: (i) the date of the
creation of any new Material Domestic Subsidiary of the Company, (ii) the date
that any Subsidiary of the Company that was not a Material Domestic Subsidiary
becomes a Material Domestic Subsidiary, or (iii) the purchase permitted by this
Agreement by the Company or any of its Subsidiaries of the capital stock of any
Person, which purchase results in such Person becoming a Material Domestic
Subsidiary of the Company, the Company shall, in each case, cause (A) such
Material Domestic Subsidiary to execute and deliver to the Administrative Agent
(with sufficient originals for each applicable Lender) any or all of the
following documents requested by the Agents: a Guaranty to guaranty the
Obligations and a Security Agreement, a Pledge Agreement (if such new Subsidiary
owns one or more Subsidiaries), one or more Vessel Mortgages (if such new
Subsidiary owns one or more Material Vessels), and such other Security Documents
as the Agents may reasonably request, in each case to secure the Obligations
together with evidence of corporate authority to enter into such Guaranty,
Security Agreement, Pledge Agreement, Vessel Mortgages and other Security
Documents as the Agents may reasonably request and (B) the Company or its
Subsidiary owning capital stock or other equity interests of such new Subsidiary
to execute a Pledge Agreement pledging 100% of its interests in the capital
stock or other equity interests of such new Subsidiary to secure the Obligations
and deliver such evidence of corporate authority to enter into such Pledge
Agreement as the Administrative Agent may reasonably request, along with share
certificates pledged thereby and appropriately executed stock powers in blank.

 

As soon as possible and in any event no later than 30 days after the end of each
fiscal quarter in which any of the following events occur: (i) the date of the
creation of any new Mexican Subsidiary that is a Material Subsidiary or (ii) the
purchase of a Person by a Mexican Subsidiary, which purchase results in such
Person becoming a Mexican Subsidiary that is a Material Subsidiary, the Company
shall, in each case, cause (A) such Mexican Subsidiary to execute and deliver to
the Administrative Agent (with sufficient originals for each applicable Lender)
any or all of the following documents requested by the Administrative Agent or
any Lender: a Guaranty to guaranty the Mexican Subsidiaries' Obligations and
Mexican Security Documents and one or more Vessel Mortgages (if such new
Subsidiary owns one or more Material Vessels), and such other Security Documents
and the Administrative Agent or any Lender may reasonably request, in each case
to secure the Mexican Subsidiaries' Obligations together with evidence of
corporate authority to enter into such Guaranty, Mexican Security Document, and
Vessel Mortgages and (B) the Company or its Subsidiary owning capital stock or
other equity interests of such new Subsidiary to execute a Pledge Agreement
pledging 100% of its interests in the capital stock or other equity interests of
such new Subsidiary to secure the Mexican Subsidiaries' Obligations and 66% of
its interests in such capital stock to secure the Loan Parties' Obligations and
such evidence of corporate authority to enter into such Pledge Agreement as the
Administrative Agent may reasonably request, along with share certificates
pledged thereby and appropriately executed stock powers in blank.

Section 5.12    New Vessels. Upon the acquisition by the Company or any of its
Subsidiaries of any Material Vessel, the Company will, or will cause the
Subsidiary which acquired such Material Vessel to, execute and deliver to
Administrative Agent for the ratable benefit of the Lenders (a) a Vessel
Mortgage granting a security interest in such Material Vessel to secure the
Obligations and (b) such evidence of corporate authority to enter into such
Vessel Mortgage as the Administrative Agent may reasonably request; provided,
however, that the Company and its Subsidiaries shall not be required to execute
and deliver a Vessel Mortgage covering any Material Vessel which is acquired or
to be acquired with MARAD Financing or subject to liens securing purchase money
debt or Capital Leases.

Section 5.13    Operation of Mortgaged Vessels. The Company and each Loan Party
that owns or operates a Mortgaged Vessel shall:

keep such Mortgaged Vessel in a good and sufficient state of repair consistent
with ownership and management practice employed by owners of vessels of similar
size and type and so as to (i) maintain the present class of such Mortgaged
Vessel at its current classification by any recognized rating agency, free of
recommendations affecting class and qualifications and change of class, save
those notified to the Agents in writing and (ii) comply with all Legal
Requirements from time to time applicable to such Mortgaged Vessel and such Loan
Party's operations except where such non-compliance will not reasonably be
expected to cause a Material Adverse Change;

 

with respect to such Mortgaged Vessel, (i) make or cause to be made all repairs
to or replacement of any damaged, worn or lost parts or equipment such that the
value of such Mortgaged Vessel will not be materially impaired and (ii) except
as otherwise contemplated by this Agreement, not remove any material part of, or
item of equipment owned by the Loan Parties installed on, such Mortgaged Vessel
unless (A) the part or item so removed is forthwith replaced by a suitable part
or item which is in the same condition as or better condition than the part or
item removed, is free from any Lien (other than Permitted Liens) in favor of any
Person other than the Administrative Agent and becomes, upon installation on
such Mortgaged Vessel the property of the Loan Parties and subject to the
security constituted by the Vessel Mortgage or the Security Agreement or (B) the
removal will not materially diminish the value, safety or operating efficiency
of such Mortgaged Vessel;

 

submit such Mortgaged Vessel to such periodical or other surveys as may be
required for classification purposes and, upon the request of either Agent
supply to Administrative Agent (with copies for each Lender, if so requested)
copies of all survey reports and classification certificates issued in respect
thereof;

 

notify the Agents in writing of:

 

any Casualty Event which results in Net Cash Proceeds in excess of $500,000.00
with respect to any Mortgaged Vessel; and

 

any occurrence in respect of any Mortgaged Vessel that is or is likely, by the
passing of time or otherwise, to become a Material Partial Loss or a Total Loss;
and

 

any requirement or recommendation made by any insurer or classification society
or by any competent authority which is not complied with within a reasonable
time; and

 

any arrest of any Mortgaged Vessel or the exercise or purported exercise of any
Lien on any Mortgaged Vessel;

 

any intended deactivation or lay-up of any Mortgaged Vessel; and

 

any loss of any material certification with respect to any Mortgaged Vessel.

 

promptly pay and discharge all debts, damages and liabilities whatsoever which
have given or may give rise to maritime or possessory Liens (other than
Permitted Prior Liens) on or claims enforceable against such Mortgaged Vessel
and all tolls, dues, taxes, assessments, governmental charges, fines and
penalties that are material in amount and lawfully charged on or in respect of
each Mortgaged Vessel other than any of the foregoing being contested in good
faith and diligently by appropriate proceedings, and, in the event of arrest of
any Mortgaged Vessel pursuant to legal process, or in the event of her detention
in exercise or purported exercise of any such Lien or claim as aforesaid,
procure, if possible, the release of such Mortgaged Vessel from such arrest or
detention forthwith upon receiving notice thereof by providing bail or otherwise
as the circumstances may require;

 

if the Person operating such Mortgaged Vessel is not a Loan Party, promptly
remit all earnings received by such Person from any Mortgaged Vessel back to the
appropriate Loan Party; and

 

(i) comply with and satisfy all Legal Requirements of the jurisdiction of such
Mortgaged Vessel's home port, now or hereafter from time to time in effect, in
order that such Mortgaged Vessel shall continue to be documented pursuant to the
laws of the jurisdiction of its home port with such endorsements as shall
qualify such Mortgaged Vessel for participation in the trades and services to
which it may be dedicated from time to time or (ii) not do or allow to be done
anything whereby such documentation is or could reasonably be expected be
forfeited.

Section 5.14    Appraisal Reports.

Within 45 days after each anniversary date of March 9, 2004, the Company shall
deliver to Administrative Agent and the Lenders a full appraisal with respect to
the top 20 Mortgaged Vessels (based on the then most recent estimated Orderly
Liquidation Value of such Mortgaged Vessels), in form, scope and methodology
acceptable to Agents, addressed to Administrative Agent and upon which
Administrative Agent and Lenders are expressly permitted to rely and setting
forth, among other things the Orderly Liquidation Value of each of such 20
Mortgaged Vessels as of the date appraised, together with a "desk-top review" of
the remaining Mortgaged Vessels (each an "Appraisal Report"). Prior to the
occurrence and during the continuance of an Event of Default, the cost of only
one (1) Appraisal Report per calendar year shall be at Borrowers' expense.

 

Upon the request of either the Administrative Agent or the Collateral Monitoring
Agent, after the occurrence and during the continuance of an Event of Default,
Company shall deliver to the Agents and the Lenders, a written appraisal with
respect to the Eligible Real Property, in form, scope and methodology acceptable
to Agents, addressed to the Agents and upon which the Agents and the Lenders are
expressly permitted to rely. The cost of each such appraisal shall be paid by
the Borrowers.

 

At any time the Administrative Agent, at the request of the Majority Lenders,
may request that Borrowers deliver an additional Appraisal Report to the
Lenders. Upon receipt of such request, the Company shall deliver such Appraisal
Report to the Administrative Agent and the Lenders within 60 days after receipt
of such request. Unless a Default is in existence at the time of such request,
the Lenders shall pay the costs of any subsequent Appraisal Reports requested by
the Agents under this Section 5.14 during such calendar year except as provided
in Section 5.14(d) below.

 

Upon the sale of any Mortgaged Vessel permitted by Section 6.03, if requested by
the Majority Lenders, the Borrowers shall deliver to the Administrative Agent
and the Lenders an additional Appraisal Report setting forth the Orderly
Liquidation Value of the Mortgaged Vessels. If the most recent Appraisal Report
was dated more than 180 days before such sale, the cost of such Appraisal Report
shall be paid by the Borrower; otherwise the cost of such Appraisal Report will
be paid by the Lenders.

 

Each Appraisal Report delivered under this Section 5.14 shall be in form, scope
and substance satisfactory to the Agents in their Permitted Discretion.

Section 5.16    Further Assurances in General. The Company shall, and shall
cause each of the Loan Parties to, protect and perfect the Liens contemplated by
the Security Documents. The Company at its expense shall, and shall cause each
of the Loan Parties to, promptly execute and deliver all such other and further
documents, agreements and instruments in compliance with or accomplishment of
the covenants and agreements of the Company or any of its Subsidiaries in the
Credit Documents, including, without limitation, the accomplishment of any
condition precedent that may have been temporarily waived by the Lenders prior
to the Closing Date.

Section 5.17    Post-Closing Requirements.

Within 14 days following the Closing Date (or such later date as is acceptable
to the Agents), the Company shall deliver to the Agents, copies of the
Certificates of Inspection, Vessel Certificates of Financial Responsibility
(Water Pollution) or International Oil Pollution Prevention Certificate, each
issued by the United States Coast Guard (or the substantial equivalent in the
case of foreign assets if available), Certificates of Classification issued by
the American Bureau of Shipping, Certificates of Documentation or Certificates
of Registry issued by the US Coast Guard or foreign equivalent, and
International Load Line Certificates issued by the American Bureau of Shipping
as requested by the Agents with respect to Mortgaged Vessels, and the Agents
shall be reasonably satisfied with the contents thereof;

 

Within 30 days following the Closing Date (or such later date as is acceptable
to the Agents),

 

the Company shall deliver to the Administrative Agent and the Lenders, in form
and substance satisfactory to Agents and the Lenders, each of the following:

 

side letter agreements to each Mexican Pledge Agreement and Mexican Security
Agreement, in each case together with any other documents, agreements or
instruments necessary to maintain an Acceptable Security Interest in the
Collateral described therein;

 

Security Agreements executed by each Cayman Guarantor granting to the
Administrative Agent for the benefit of the Lenders a lien in the Collateral to
secure the Obligations, together with any other documents, agreements or
instruments necessary to create an Acceptable Security Interest in the such
pledged collateral;

 

Pledge Agreements executed by the Company, Global Industries International,
L.L.C., Subtec Middle East Limited, Global Pipelines PLUS, L.L.C., and Global
Industries Offshore, L.L.C., pledging to the Administrative Agent for the
benefit of the Lenders to secure the Obligations, 66% of the equity interests of
such Pledgors in Global Industries International, LP, together with stock
certificates, stock powers executed in blank, UCC-1 financing statements, and
any other documents, agreements or instruments necessary to create an Acceptable
Security Interest in such equity interests under the law of the Cayman Islands;

 

certificates from the appropriate Governmental Authority certifying as to the
good standing, existence and authority of each Cayman Guarantor in all
jurisdictions where reasonably required by the Agents;

 

with respect to each Cayman Guarantor, copies, certified as of the Closing Date
by a Responsible Officer of the appropriate Person of (A) the resolutions of the
Board of Directors or its equivalent of such Cayman Guarantor approving the
Credit Documents to which it is a party and the transactions contemplated
thereby, (B) the organizational documents of such Cayman Guarantor, and (C) all
other documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the other Credit
Documents;

 

with respect to each Cayman Guarantor, certificates of a Responsible Officer of
such Cayman Guarantor certifying the names and true signatures of officers of
such Cayman Guarantor authorized to sign the Credit Documents to which such
Cayman Guarantor is a party;

 

favorable opinions from local counsel located in the Cayman Islands, in form and
substance reasonably satisfactory to the Agents; and

 

Vessel Mortgages with respect to the CB-7 and Tonkawa filed with the Office of
the Deputy Commissioner of Maritime Affairs of the Republic of Vanuatu, Port of
New York, New York; and

 

(A) Control Agreements executed by each of the Cash Management Banks with
respect to the Cash Management Accounts and (B) the Company, each Domestic
Subsidiary that are Guarantors and each Cayman Guarantor shall establish
collection accounts separate from its operating accounts in a manner reasonably
acceptable to the Agents; and

 

certificates of insurance from an insurance agent or insurer evidencing
compliance with the requirements of Section 5.02 and the Security Documents;
together with copies of all insurance policies and all endorsements and riders
supplemental thereto in respect of insurance maintained under Section 5.02.

 

Within 60 days following the Closing Date (or such later date as is acceptable
to Agents), the Company shall cooperate with the Agents, in conducting and
completing a field audit conducted by Collateral Monitoring Agent; and

 

as soon as possible following the Closing Date, the Administrative Agent shall
have received lien searches (i) conducted in Calcasieu Parish, Louisiana with
respect to the Eligible Real Property reflecting no Liens other than Permitted
Prior Liens against such Collateral and (ii) such other lien searches as the
Administrative Agent may reasonably request in its Permitted Discretion; and

 

as soon as possible following the Closing Date, the Company shall obtain the
written consent of MARAD with respect to this Agreement.

ARTICLE VI

NEGATIVE COVENANTS

 

So long as the Notes or any amount under any Credit Document shall remain
unpaid, any Lender shall have any Commitment, or there shall exist any Letter of
Credit Exposure, each Borrower agrees, unless the Majority Lenders otherwise
consent in writing, to comply with the following covenants.

Section 6.01    Liens, Etc. Neither the Company nor any of its Subsidiaries will
create, assume, incur or suffer to exist, any Lien on or in respect of any of
its Property whether now owned or hereafter acquired, or assign any right to
receive income, except that the Company and its Subsidiaries may create, incur,
assume or suffer to exist the following which are permitted liens ("Permitted
Liens"):

Liens securing the Obligations;

 

Liens for taxes, assessments or governmental charges or levies on Property of
the Company and its Subsidiaries to the extent not required to be paid pursuant
to Sections 5.01 and 5.04;

 

Liens set forth in the attached Schedule 6.01 securing Debt described therein
and refinancings of such Debt; provided that, the aggregate principal amount of
such Debt shall not be renewed, refinanced or extended if the amount of such
Debt so renewed, refinanced or extended is greater than the outstanding amount
of such Debt on the Closing Date;

 

Liens imposed by law or contract, such as preferred maritime Liens incurred in
the ordinary course of business (including liens for wages, tort, general
average salvage, repair, supplies, towage, use of a drydock facility or marine
railway, or other necessaries supplied to a vessel), carrier's, warehousemen's,
mechanic's, materialmen's, repairmen's or other like Liens arising in the
ordinary course of business (whether or not statutory) which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings, for which a reserve or other appropriate provision, if
any, as shall be required by GAAP, shall have been made;

 

deposits to secure the performance of bids, trade contracts, leases, statutory
obligations and other obligations of a like nature incurred in the ordinary
course of business in an aggregate amount outstanding at any time not to exceed
$7,500,000.00;

 

easements, rights-of-way, restrictions and other similar encumbrances incurred
in the ordinary course of business and encumbrances consisting of zoning
restrictions, easements, leases, subleases, licenses, sublicenses, restrictions
on the use of Property or minor imperfections in title thereto which,
individually and in the aggregate, could not reasonably be expected to cause a
Material Adverse Change, and which do not in any case materially detract from
the value of the Property subject thereto or interfere with the ordinary conduct
of the business of the Company or any of its Subsidiaries;

 

Liens on Property of Persons which become Subsidiaries of the Company after the
Closing Date securing Debt permitted hereby; provided that, (i) such Liens are
in existence at the time the respective Persons become Subsidiaries of the
Company and were not created in anticipation thereof, (ii) the Debt secured by
such Liens (A) is secured only by such Property and not by any other assets of
the Subsidiary acquired, (B) is not increased in amount and (C) the aggregate
principal amount of the indebtedness secured by the Liens permitted by this
paragraph (g) shall not exceed $5,000,000.00 at any time, (iii) after giving pro
forma effect to the acquisition of such Subsidiary, the Company's Consolidated
EBITDA is greater than $65,000,000.00 for the four fiscal quarters most recently
ended and (iv) after giving pro forma effect to the acquisition of such
Subsidiary, the Leverage Ratio calculated as of the most recent fiscal quarter
for which financial statements are available is less than 1.50 to 1.00;

 

Liens arising in the ordinary course of business out of pledges or deposits
under workers' compensation laws, unemployment insurance, old age pensions or
other social security or retirement benefits, or similar legislation or to
secure public or statutory obligations of the Borrower;

 

purchase money Liens or purchase money security interests upon or in any
equipment acquired or held by the Company or any of its Subsidiaries in the
ordinary course of business prior to or at the time of the Company's or such
Subsidiary's acquisition of such equipment; provided that, the Debt secured by
such Liens (A) was incurred solely for the purpose of financing the acquisition
of such equipment, and does not exceed the aggregate purchase price of such
equipment, (B) is secured only by such equipment and not by any other assets of
the Company and its Subsidiaries, (C) is not increased in amount, and (D) the
aggregate principal amount of the indebtedness secured by the Liens permitted by
this paragraph (i) shall not exceed $5,000,000.00 at any time, the Company's
Consolidated EBITDA is greater than $65,000,000.00 for the four fiscal quarters
most recently ended and the Leverage Ratio calculated as of the most recent
fiscal quarter for which financial statements are available is less than 1.50 to
1.00.

 

Liens securing any MARAD Financing; provided that each such Lien encumbers only
the property financed in connection with the creation of any such Debt and any
other MARAD Collateral; and

 

Liens securing Capitalized Leases to the extent such Debt is permitted under
Section 6.02(h); provided, that each such Lien only encumbers the property
acquired in connection with the creation of such Capital Lease and all proceeds
therefrom and the fair market value of the collateral securing any such Debt may
exceed the outstanding principal amount of such Debt only to the extent such
excess is within customary commercial bank lending and collateralization
requirements.

Notwithstanding the foregoing, the Company shall not, nor shall it permit any of
its Subsidiaries to, create, assume, incur or suffer to exist, any Lien on or in
respect of (i) any assets relating to or arising from the Mortgaged Vessels
whether now owned or hereafter acquired, including, without limitation, any
accounts receivable, inventory, equipment, and general intangibles (each as
defined in Article 9 of the UCC) other than Liens in favor of the Administrative
Agent for the benefit of the Lenders, (ii) the Capital Stock of the Company or
any of its Subsidiaries, or (iii) GP 35, GP37, MV Shamal and MV Selatan, except
in each case, Permitted Liens under clauses (a), (b), (d), (f) and (h) above.

Section 6.02    Debts, Guaranties and Other Obligations. The Company will not,
and will not permit any of its Subsidiaries to, create, assume, suffer to exist
or in any manner become or be liable, in respect of any Debt except:

Debt of the Company and its Subsidiaries under the Credit Documents;

 

intercompany Debt incurred in the ordinary course of business owed (i) by any
Wholly Owned Subsidiary of the Company to the Company or to any other Wholly
Owned Subsidiary of the Company, (ii) by the Company to any of its Wholly Owned
Subsidiaries, and (iii) by any Mexican Subsidiary to another Mexican Subsidiary;
provided that, (A) all such intercompany Debt shall be subordinated to the
Obligations in accordance with the terms set forth in the Guaranties, provided
that no Cash Dominion Event has occurred and is continuing, and (B) the
aggregate amount of intercompany Debt incurred by and capital contributions or
investments made pursuant to Section 6.04(a) to Foreign Subsidiaries that are
not Loan Parties to any other Loan Party may not exceed $10,000,000; provided,
however that if a Foreign Subsidiary has been awarded a material contract, then
such Foreign Subsidiary may incur additional intercompany Debt or receive
additional capital contributions or investments in an amount up to $40,000,000
provided that the aggregate amount of all such intercompany Debt incurred by and
capital contributions made pursuant to Section 6.04(a) to Foreign Subsidiaries
that are not Loan Parties does not exceed $40,000,000;

 

Debt secured by the Liens permitted under paragraphs (c), (g) and (i) of Section
6.01;

 

any MARAD Financing used to finance the acquisition, construction, or
improvement of the Company's or any of its Subsidiaries' vessels (including any
rearrangements, extensions, or refinancing thereof) in an aggregate principal
amount outstanding at any time not to exceed $25,000,000.00 in addition to any
other MARAD Financing permitted by clause (e) below; provided, that the Company
and its Subsidiaries may not enter into additional MARAD Financing described in
this clause (d) (other than rearrangements, extensions, or refinancings thereof)
if a Default is continuing or entering into the additional indebtedness would
reasonably be expected to cause a Default;

 

Debt listed on Schedule 6.02 and all extensions, amendments, refinancings, and
renewals thereof so long as none of the principal amount of such Debt is
increased;

 

reimbursement obligations of the Company and its Subsidiaries in respect of any
surety bonds or letters of credit otherwise permitted under this Agreement
issued to secure payment of any insurance premiums, regulatory obligations, or
trust fund obligations for the Company or any of its Subsidiaries;

 

Unfunded Liabilities not giving rise to an Event of Default;

 

Capitalized Leases with an aggregate principal amount outstanding at any time
not to exceed $25,000,000.00;

 

Permitted Bond Obligations;

 

unsecured obligations other than Permitted Bond Obligations in respect of
letters of credit, bonds and guaranties issued for the account of the Company or
any of its Subsidiaries to secure the Company's or any of its Subsidiaries'
performance obligations in the ordinary course of business with an aggregate
face amount outstanding at time not to exceed $150,000,000.00 or its Equivalent
Amount in another currency;

 

nonspeculative Financial Contract Obligations entered into in the ordinary
course of business; and

 

other unsecured Debt of the Company and its Subsidiaries with an aggregate
principal amount outstanding not to exceed $2,000,000.00.

 

Section 6.03    Merger or Consolidation; Asset Sales. Neither the Company nor
any of its Subsidiaries will (a) merge or consolidate with or into any other
Person or (b) sell, lease, transfer, or otherwise dispose of any of its Property
(other than the sale of inventory in the ordinary course of business or the sale
of obsolete or worn-out property in the ordinary course of business) except that
so long as after giving effect thereto no Default or Event of Default shall
exist:

any Loan Party may merge or consolidate with any corporation, provided that such
Loan Party shall be the continuing or surviving entity, and provided that no
Default occurs or would be caused by such merger or consolidation;

 

any Loan Party (other than the Company) may merge or consolidate with any other
Loan Party, provided that no Loan Party's Obligations under the Credit Documents
shall decrease as a result of such merger or consolidation;

 

the Company and its Subsidiaries may sell, lease, transfer or otherwise dispose
of any assets to third parties outside the ordinary course of business; provided
that, (A) the Net Cash Proceeds received by the Company or such Subsidiary from
all such sales in excess of $5,000,000.00 in any calendar year shall, within 90
days of the date received, be reinvested or committed to be reinvested through
executed construction contracts by the Company or such Subsidiary in (1)
replacement assets of comparable value and utility or (2) improvements to
existing assets of the Company or such Subsidiary, (B) if no Event of Default
has occurred and is continuing or would result from such sale, the Loan Parties
may sell, lease, transfer or otherwise dispose of any Mortgaged Vessel or any of
the GP 35, GP37, MV Shamal and MV Selatan with an Orderly Liquidation Value of
up to an aggregate amount of $10,000,000 during the term of this Agreement and
(C) when taken together with all other asset sales (other than sales, leases,
transfers, or other dispositions permitted by subsection (iv) below) permitted
by this Section during the fiscal year in which such Asset Sale occurs, the
aggregate amount thereof does not exceed 5% of the Company's tangible net assets
(based on book value) as set forth in the Company's most recent Form 10-K;

 

the Company and its Subsidiaries may sell, discount or factor foreign accounts
receivable, at face value or at a discount not to exceed 3%, with an uncollected
face amount outstanding at any time not to exceed $20,000,000.00 for the four
fiscal quarters most recently ended, without recourse or representation or
warranty other than customary representations and warranties and recourse that
would not prevent true sale treatment of such sale, discount or factor under
GAAP; provided that no Event of Default has occurred and is continuing and that
the Company is in compliance with Sections 6.13 through 6.17 both before and
after giving effect to such transaction;

 

the Company and any of its Subsidiaries may sell, transfer, assign or otherwise
dispose of any Property, other than Collateral, to the Company or any other
Subsidiary;

 

any Borrower or Guarantor may sell, transfer, assign or otherwise dispose of any
Mortgaged Vessels and related contracts and equipment to any other Loan Party,
provided that with respect to such sale, transfer, assignment or other
disposition, such Loan Party shall ratify and grant Liens on such Collateral
pursuant to the Security Documents and deliver such legal opinions in relation
thereto as may be reasonably requested by the Agent and counsel for the Agents
shall have confirmed that the Administrative Agent has an Acceptable Security
Interest on such Collateral pursuant to the Security Documents; and

 

on or before December 31, 2004, the Company and any of its Subsidiaries may sell
the assets described in the letter from the Company addressed to the
Administrative Agent and the Lenders dated as of August 6, 2004 on the terms and
conditions set forth therein provided that the Net Cash Proceeds from such asset
sale are applied in accordance with Section 2.07(c)(v).

 

Section 6.04    Investments. Neither the Company nor any of its Subsidiaries
will make or permit to exist any loans, advances or capital contributions to, or
make any investment in, or purchase or commit to purchase any stock or other
securities or evidences of indebtedness of or interests in any Person, except
for:

capital contributions or investments made on or before the date hereof in any
Domestic Subsidiary and in any Foreign Subsidiary in existence on the Closing
Date, and additional capital contributions or investments in any Domestic
Subsidiary or Foreign Subsidiary in existence on the Closing Date, provided that
on the date of such investment and after giving effect thereto, (i) no Cash
Dominion Event has occurred and is continuing and (ii) such capital
contributions or investments would be permitted under Section 6.02(b);

 

Liquid Investments provided, that such Liquid Investments are subject to lien in
favor of Administrative Agent;

 

intercompany loans from the Company to or from any of its Subsidiaries and
intercompany loans between Subsidiaries, provided that on the date of such
investment and after giving effect thereto, (i) no Cash Dominion Event has
occurred and is continuing and (ii) such Debt would be permitted under Section
6.02(b);

 

Acquisitions permitted under Section 6.18;

 

loans or advances to third parties in an aggregate amount outstanding at any
time not to exceed $5,000,000.00 made in the ordinary course of business; and

 

investments in capital stock of publicly traded companies in an aggregate amount
not to exceed $2,500,000.00 at any time; provided that (i) Excess Availability
is equal to or greater than $50,000,000.00 at the time of incurrence, (ii) the
Company's Consolidated EBITDA is greater than $65,000,000.00 for the four fiscal
quarters most recently ended and (iii) the Leverage Ratio calculated as of the
most recent fiscal quarter for which financial statements are available is less
than 1.50 to 1.00.

 

Section 6.05    Transactions With Affiliates. Neither the Company nor any of its
Subsidiaries shall, directly or indirectly, enter into or permit to exist any
transaction or series of transactions (including, but not limited to, the
purchase, sale, lease or exchange of Property, the making of any investment, the
giving of any guaranty or the rendering of any service) with any of their
Affiliates other than the Company or a Wholly Owned Subsidiary of the Company
unless such transaction or series of transactions is on terms no less favorable
to the Company or such Subsidiary than those that could be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate.

Section 6.06    Compliance with ERISA. Neither the Company nor any of its
Subsidiaries will (a) terminate, or permit any member of the Controlled Group to
terminate, any Plan so as to result in a Material Adverse Change or (b) permit
to exist any occurrence of any Reportable Event or any other event or condition,
which presents a material (in the reasonable opinion of the Majority Lenders)
risk of such a termination by the PBGC of any Plan.

Section 6.07    Restricted Payments. Neither the Company nor any of its
Subsidiaries shall make any Restricted Payments (i) other than Restricted
Payments by Subsidiaries of the Company to the Company or another Subsidiary of
the Company and by the Company to any of its Subsidiaries provided that on the
date of such Restricted Payment and after giving effect thereto, no Cash
Dominion Event has occurred and is continuing and no Default or Event of Default
has occurred and is continuing, in each case at the time of such Restricted
Payment or (ii) purchases by the Company of its common stock in any event not to
exceed in the aggregate $25,000,000 provided that (A) Excess Availability is
equal to or greater than $50,000,000.00 at the time of such purchase, (B) the
Company's Consolidated EBITDA is greater than $65,000,000.00 for the four fiscal
quarters most recently ended and (C) the Leverage Ratio calculated as of the
most recent fiscal quarter for which financial statements are available is less
than 1.50 to 1.00.

Section 6.08    Maintenance of Ownership of Subsidiaries. Except as permitted by
Section 6.03, the Company will not, and will not permit any of its Subsidiaries
to, sell or otherwise dispose of any shares of capital stock of any of the
Company's Material Subsidiaries or permit any Subsidiary of the Company to
issue, sell or otherwise dispose of (other than to its parent) any shares of its
capital stock or the capital stock of any of the Company's Material
Subsidiaries.

Section 6.09    Agreements Restricting Liens and Distributions. The Company will
not, nor will it permit any of its Subsidiaries to, enter into or permit to
exist any agreement (other than a Credit Document, any agreement entered into in
connection with MARAD Financing permitted hereunder) which (a) except with
respect to specific Property encumbered to secure payment of Debt related to
such Property, imposes restrictions greater than those under this Agreement upon
the creation or assumption of any Lien upon its Properties, revenues or assets,
whether now owned or hereafter acquired or (b) limits Restricted Payments to or
any advance by any of the Company's Subsidiaries to the Company.

Section 6.10    Other Debt.

The Company will not, and will not permit any Subsidiary to, make any amendment
or modification to the subordination provisions of any indenture, note or other
agreement evidencing or governing any Subordinated Debt.

 

If any Debt is required to be subordinated pursuant to Section 6.02(b) and is
not evidenced by a promissory note, then the Company shall procure that each
such Subsidiary will enter into a written subordination agreement on terms
reasonably acceptable to the Administrative Agent.

 

Section 6.11    Limitation on Changes in Fiscal Periods. The Company shall not,
nor shall it permit any of its Subsidiaries to, permit the fiscal year of the
Company or any of its Subsidiaries to end on a day other than December 31 or
change the Company's method of determining fiscal quarters.

Section 6.12    Mortgaged Vessels. The Company shall not, nor shall it permit
any of its Subsidiaries to,

without the previous consent in writing of the Administrative Agent, change the
name of or make any modification to any Mortgaged Vessel which would materially
or adversely alter the structure, type or performance characteristics of such
Mortgaged Vessel or which would materially reduce the value of such Mortgaged
Vessel as determined by the Agents in their Permitted Discretion;

 

employ any Mortgaged Vessel or allow her employment in any trade or business
which is unlawful under the laws of any relevant jurisdiction in which it is
located or subject or in carrying illicit or prohibited goods or in any manner
whatsoever which can reasonably be expected to render her liable to destruction,
seizure or confiscation; and in the event of hostilities in any part of the
world (whether war be declared or not) not employ any Mortgaged Vessel or suffer
her employment in carrying any contraband goods or to enter or trade to any zone
which is declared a war zone by any Government Authority or by the insurers of
such Mortgaged Vessel unless there shall have been effected by the Loan Parties
(at their expense) such special, additional or modified insurance coverage as
the Agents may reasonably require;

 

if an Event of Default has occurred and is continuing, not without the previous
consent of the Agents (such consent not to be unreasonably withheld or delayed),
undertake or commence upgrades or improvements on any Mortgaged Vessel in an
amount exceeding or likely to exceed $500,000.00 (or the equivalent in any other
currency) unless the Person to provide such upgrades or improvements shall first
have given to the Administrative Agent a written waiver or subordination of its
Liens or its equivalent, such waiver or subordination to be in form and
substance reasonably satisfactory to the Administrative Agent;

 

charter any Mortgaged Vessel to, or permit the Mortgaged Vessel to serve under
any contract with, a Person included within the definition of (i) "national" of
a "designated foreign country," or "specially designated national" of a
"designated foreign country," in the Foreign Assets Control Regulations or the
Cuban Assets Control Regulations of the United States Treasury Department, 31
C.F.R. Parts 500 and 515, in each case as amended, (ii) "Government of Libya",
"entity of the Government of Libya" or "Libyan entity" in the Libyan Sanctions
Regulations of the United States Treasury Department, 31 C.F.R. Part 550, as
amended, or (iii) "Government of Iraq", "entity of the Government of Iraq" or
"Iraqi Government entity" in the Iraqi Sanctions Regulations, 56 Fed. Reg. 2112
(1991) to be codified at 31 C.F.R. Part 575, as amended, all within the meaning
of said Regulations or of any regulations, interpretations or rulings issued
thereunder, or engage in any transaction that violates any provision of said
Regulations or that violates any provision of the Iranian Transactions
Regulations, 31 C.F.R. Part 560, as amended, the Foreign Funds Control
Regulations, 31 C.F.R. Part 520, as amended, the Transaction Control
Regulations, 31 C.F.R. Part 505, as amended, the Haitian Transaction
Regulations, 31 C.F.R. Part 580, as amended, the Foreign Assets Control
Regulations, 31 C.F.R. Part 500, as amended, or Executive Orders 12810 and 12831
if such transaction or violation would (A) expose the Agents or any Lender to
any penalty, sanction or investigation or (B) jeopardize the Lien created by the
Vessel Mortgages or (C) might reasonably be expected to have a material adverse
effect on the Loan Parties or the operation of the Mortgaged Vessels, or call at
a Cuban port to load or discharge cargo or to effect repairs on the Mortgaged
Vessels;

 

cause or permit any Mortgaged Vessel to be operated in any manner contrary to
law (except where the failure to operate in compliance with any law would not
have a material adverse effect on the Loan Parties, such Mortgaged Vessel or the
Lien created by the applicable Vessel Mortgage);

 

abandon any Mortgaged Vessel in a port outside the United States of America;

 

engage in any unlawful trade or violate any law or carry any cargo that shall
expose any Mortgaged Vessel to forfeiture or capture;

 

operate any Mortgaged Vessel in any jurisdiction or in any manner which could
cause the Lien created by the applicable Vessel Mortgage to be rendered
unenforceable or the Administrative Agent's foreclosure or enforcement rights to
be materially impaired or hindered; or

 

change the flag of any Mortgaged Vessel without the prior written consent of the
Administrative Agent, such consent not to be unreasonably denied or delayed,
provided that such Loan Party shall ratify and grant Liens on such Collateral
and counsel for the Agents shall have confirmed that the Administrative Agent
has an Acceptable Security Interest on such Collateral pursuant to the Security
Documents.

 

Section 6.13    Leverage Ratio. The Company will not permit its Leverage Ratio
at the end of any fiscal quarter to be greater than the levels indicated below
for the corresponding periods:

Period

Ratio

September 30, 2004 through December 31, 2004

2.25 to 1.00

March 31, 2005 and thereafter

1.50 to 1.00

Section 6.14    Minimum Net Worth. The Company shall not permit Consolidated Net
Worth as of the last day of any fiscal quarter to be less than (a) 90% of
Consolidated Net Worth as of March 31, 2004 plus (b) 50% of its Consolidated Net
Income for each fiscal quarter beginning with the fiscal quarter ending on June
30, 2004, during which Consolidated Net Income is positive, but without
reductions for any fiscal quarters during which Consolidated Net Income is
negative plus (c) 100% of the Net Cash Proceeds from any Equity Issuance
thereafter.

Section 6.15    Minimum Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio at the end of any fiscal quarter to be less than the
following ratios during the following periods:

Period

Ratio

Fiscal quarter ending September 30, 2004

1.50 to 1.00

December 31, 2004 and thereafter

3.00 to 1.00

Section 6.16    Minimum Consolidated EBITDA. The Company will not permit its
Consolidated EBITDA to be less than the amount set forth below opposite such
period:

Period

Ratio

Three fiscal quarters ending September 30, 2004

$35,000,000.00

Four fiscal quarters ending December 31, 2004

$57,500,000.00

Four fiscal quarters ending March 31, 2005 and each four fiscal quarter period
thereafter

$65,000,000.00

Section 6.16    Capital Expenditures. The Company will not permit its
consolidated Capital Expenditures, other than Capital Expenditures in connection
with Acquisitions permitted pursuant to Section 6.18 below, to exceed the
following amounts during the following fiscal quarters:

Fiscal Quarters Ending

Maximum Amount

For the two fiscal quarters
ending September 30, 2004

50% of the Company's Consolidated EBITDA for the two fiscal quarters ended
September 30, 2004

For the three fiscal quarters
ending December 31, 2004

50% of the Company's Consolidated EBITDA for the three fiscal quarters ended
December 31, 2004

Four fiscal quarters ended March 31, 2005 and each four fiscal quarter period
ending thereafter

50% of the Company's Consolidated EBITDA for the four fiscal quarters then ended

Section 6.18    Acquisitions. For Acquisitions for which the aggregate
consideration is less than $15,000,000.00, the consent of the Lenders shall not
be required so long as (i) the acquisition target is in the same or similar line
of business as the Company or any Domestic Subsidiary that is a Guarantor; (ii)
the Company or a Domestic Subsidiary that is a Guarantor is the surviving entity
holding one hundred percent (100%) of the ownership interests in the Acquisition
target; (iii) no Default or Event of Default shall exist before or after any
Acquisition; (iv) the terms of Section 5.11 are satisfied; (v) the board of
directors of the Acquisition target approves the Acquisition; (vi) the aggregate
cash consideration for all Acquisitions, including the Acquisition in question,
during the previous 12-month period is less than $15,000,000.00; and (vii) after
giving effect to any such Acquisition on a pro forma basis, Excess Availability
is greater than or equal to $50,000,000.00.

Section 6.19    Collateral Coverage Test. As of the last day of any fiscal
quarter, the Company will not permit the ratio of (a)(i) the aggregate Orderly
Liquidation Value of all Eligible Mortgaged Vessels to (ii) the Revolving
Commitments to be less than 1.4 to 1.0, and (b)(i) the sum of (A) the aggregate
Orderly Liquidation Value of all Eligible Mortgaged Vessels, and (B) the fair
market value (as set forth in the most recent appraisal delivered to Collateral
Monitoring Agent) of Eligible Real Property to (ii) the Revolving Commitments to
be less than 2.0 to 1.0.

 

ARTICLE VII

REMEDIES

Section 7.01    Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default" under any Credit Document:

Payment

. A Borrower shall fail to pay any principal of any Note (including, without
limitation, any mandatory prepayment required by Section 2.07) when the same
becomes due and payable, or any interest on the Notes or any fee or other amount
payable hereunder or under any other Credit Document within three Business Days
after the same becomes due and payable;

 

Representation and Warranties

. Any representation or warranty made or deemed to be made by a Borrower or any
other Loan Party (or any of their respective officers) in this Agreement, in any
other Credit Document, or in any certificate delivered in connection with this
Agreement or any other Credit Document shall prove to have been incorrect when
made or deemed to be made;

 

Covenant Breaches

. A Borrower or any other Loan Party shall (i) fail to perform or observe any
covenant contained in Sections 5.02, 5.05(a), 5.05(b), and Article VI of this
Agreement or (ii) fail to perform or observe any other term or covenant set
forth in this Agreement or in any other Credit Document which is not covered by
clause (i) above or any other provision of this Section 7.01 if such failure
shall remain unremedied for thirty (30) days from the earlier of written notice
of such default to the Company from the Administrative Agent or any Lender or
the date of actual knowledge of such default by a Responsible Officer of the
Company or any of its Subsidiaries;

 

Cross Default

. The Company or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on its Debt which is outstanding in a principal amount of at
least $5,000,000.00 (or the Equivalent Amount of Debt denominated in a currency
other than Dollars) when aggregated with all such Debt of the Person so in
default (but excluding Debt evidenced by the Notes) when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), any other event shall occur or condition shall exist under
any agreement or instrument relating to Debt which is outstanding in a principal
amount of at least $5,000,000.00 (or the Equivalent Amount of Debt denominated
in a currency other than Dollars) when aggregated with all such Debt of the
Person so in default (but excluding Debt evidenced by the Notes), and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;

 

Insolvency

. The Company or any of its Material Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Company or
any of its Material Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against the Company
or any of its Material Subsidiaries, either such proceeding shall remain
undismissed for a period of sixty (60) days or any of the actions sought in such
proceeding shall occur; or the Company or any of its Material Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this paragraph(e);

 

Judgments

. Any judgment, decree or order for the payment of money (other than a
settlement order or decree for the GTM Settlement) shall be rendered against the
Company or any of its Subsidiaries in an amount in excess of $5,000,000.00 (or
the Equivalent Amount of thereof if denominated in a currency other than
Dollars) if rendered solely against the Company or any of its Subsidiaries, or
for which the Company's or any such Subsidiary's allocated portion of which
exceeds $5,000,000.00 (or the Equivalent Amount thereof if denominated in a
currency other than Dollars) and either (i) such judgment, decree or order
remains unsatisfied and in effect for a period of 60 consecutive days or more
without being vacated, discharged, satisfied or stayed or bonded pending appeal
or (ii) enforcement proceedings shall have been commenced by any creditor upon
such judgment, decree or order;

 

Termination Events

. Any Termination Event with respect to a Plan shall have occurred, and, 30 days
after notice thereof shall have been given to the Company by the Administrative
Agent, (i) such Termination Event shall not have been corrected and (ii) the
then present value of such Plan's vested benefits exceeds the then current value
of assets accumulated in such Plan by an amount which exceeds $5,000,000.00 (or
the Equivalent Amount thereof if denominated in a currency other than Dollars)
(or in the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall exceed such
amount);

 

Plan Withdrawals

. The Company or any member of the Controlled Group as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from such
Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred a withdrawal
liability in an annual amount which exceeds $5,000,000.00 (or the Equivalent
Amount thereof if denominated in a currency other than Dollars);

 

Guaranty

. (i) Any of the provisions in any of the Guaranties requiring payment shall for
any reason cease to be valid and binding on the applicable Guarantor or (ii) any
of the Guarantors shall so state in writing;

 

Security Documents

. (i) The Administrative Agent and the Lenders shall fail to have an Acceptable
Security Interest in the Collateral or (ii) any material provision of any
Security Document shall for any reason cease to be valid and binding on the
Company or other Loan Parties executing such Security Document, or any such
Person shall so state in writing; or

 

Change in Control

. A Change in Control shall occur.

 

Section 7.02    Optional Acceleration of Maturity. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.01) shall
have occurred and be continuing, then, and in any such event:

the Administrative Agent (i) shall at the request of, or may with the consent
of, the Majority Lenders, by notice to the Company, declare the obligation of
each Lender to make Advances and the obligation of such Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request of, or may with the consent of, the
Majority Lenders, by notice to the Company, declare the Notes, all interest
thereon, and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, all such interest, and all such amounts shall
become and be forthwith due and payable in full, without presentment, demand,
protest or further notice of any kind (including, without limitation, any notice
of intent to accelerate or notice of acceleration), all of which are hereby
expressly waived by the Borrower;

 

a Borrower shall, on demand of the Administrative Agent at the request or with
the consent of the Majority Lenders, deposit with the Administrative Agent into
the Cash Collateral Account an amount of cash in Dollars equal to the
outstanding Letter of Credit Exposure as security for the Obligations to the
extent the Letter of Credit Obligations are not otherwise paid at such time; and

 

the Administrative Agent and the Lenders may exercise all rights and remedies
available under the Security Documents and applicable law.

 

Section 7.03    Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph(e) of Section7.01 shall occur:

the obligation of each Lender to make Advances and the obligation of any Issuing
Bank to issue Letters of Credit shall immediately and automatically be
terminated and the Notes, and all other amounts payable under this Agreement
shall immediately and automatically become and be due and payable in full,
without presentment, demand, protest or any notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrowers;

 

a Borrower shall deposit, without demand, with the Administrative Agent into the
Cash Collateral Account an amount of cash in Dollars equal to the outstanding
Letter of Credit Exposure as security for the Obligations to the extent the
Letter of Credit Obligations are not otherwise paid at such time; and

 

the Administrative Agent and the Lenders may exercise all rights and remedies
available under the Security Documents and applicable law.

 

Section 7.04    Non-Exclusivity of Remedies. No remedy conferred upon the
Administrative Agent is intended to be exclusive of any other remedy, and each
remedy shall be cumulative of all other remedies existing by contract, at law,
in equity, by statute or otherwise.

Section 7.05    Right of Set off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.02 to authorize the
Administrative Agent upon the consent of the Majority Lenders to declare the
Notes and any other amount payable hereunder due and payable pursuant to the
provisions of Section 7.02 or the automatic acceleration of the Notes and all
amounts payable under this Agreement pursuant to Section 7.03, each Lender, for
the ratable benefit of all the Lenders, 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 indebtedness at any time owing by such Lender to or
for the credit or the account of a Borrower against any and all of the
obligations of the Borrowers now or hereafter existing under this Agreement, the
Notes, and the other Credit Documents, irrespective of whether or not such
Lender shall have made any demand under this Agreement, the Notes, or such other
Credit Documents, and although such obligations may be unmatured. Each Lender
agrees to promptly notify the Company after any such set off and application
made by it, provided that the failure to give such notice shall not affect the
validity of such set off and application. The rights of each Lender under this
Section are in addition to any other rights and remedies (including, without
limitation, other rights of set off) which such Lender may have.

Section 7.06    Application of Proceeds. All proceeds received after or held at
the time of maturity of the Obligations, whether by acceleration or otherwise
shall be applied in the following order:

First, to payment of the reasonable expenses, liabilities, losses, costs,
duties, fees, charges or other moneys whatsoever (together with interest payable
thereon) as may have been paid or incurred in, about or incidental to any sale
or other realization of Collateral, including reasonable compensation to the
Administrative Agent and Collateral Monitoring Agent and their respective agents
and counsel, and to the ratable payment of any other unreimbursed reasonable
expenses and indemnities for which the Administrative Agent, Collateral
Monitoring Agent or any Lender is to be reimbursed pursuant to this Agreement or
any other Credit Document, in each case that are then due and payable;

 

Second, to the ratable payment of accrued but unpaid commitment fees then due
and payable to the Lenders in respect of the Commitments under this Agreement
and accrued but unpaid agents' fees then due and payable to the Administrative
Agent and Collateral Monitoring Agent under this Agreement;

 

Third, to the ratable payment of accrued but unpaid interest on the Advances
then due and payable under this Agreement;

 

Fourth, to the ratable payment of all outstanding secured Obligations,
(excluding any Financial Contract Obligations) of the Company or any of its
Subsidiaries owing to any Lender or any Affiliate of a Lender, then due and
payable;

 

Fifth, to the ratable payment of all Financial Contract Obligations;

 

Sixth, to the ratable payment of all outstanding unsecured Financial Contract
Obligations of the Company or any of its Subsidiaries owing to any Lender or any
Affiliate of a Lender then due and payable; and

 

Seventh, any excess after payment in full of all Obligations shall be paid to
the Company or any Loan Party as appropriate or to such other Person who may be
lawfully entitled to receive such excess.

 

ARTICLE VIII

THE ADMINISTRATIVE AGENT, COLLATERAL MONITORING AGENT AND THE ISSUING BANK

Section 8.01    Appointment; Nature of Relationship.

Calyon is hereby appointed by the Lenders as the Administrative Agent hereunder
and under each other Credit Document (other than the Vessel Mortgages), and to
act as the security trustee under the Vessel Mortgages, and each of the Lenders
irrevocably authorizes the Administrative Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Credit Documents. Calyon is hereby appointed by the
Lenders an Issuing Bank hereunder and under each other Credit Document, and each
of the Lenders irrevocably authorizes any Issuing Bank to act with the rights
and duties expressly set forth herein and in the other Credit Document regarding
the Issuing Banks. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article VIII.
Notwithstanding the use of the defined term "Agent," it is expressly understood
and agreed that the Administrative Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Credit
Document and that the Administrative Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Credit Documents. In its capacity as the
Lenders' contractual representative, the Administrative Agent (a) does not
hereby assume any fiduciary duties to any of the Lenders, (b) is a
"representative" of the Lenders within the meaning of Section 9-102 of the
Uniform Commercial Code as adopted in the State of New York and (c) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Credit Documents. Each of
the Lenders hereby agrees to assert no claim against the Administrative Agent on
any agency theory or any other theory of liability for breach of fiduciary duty,
all of which claims each Lender hereby waives.

 

Wells Fargo Foothill, Inc. is hereby appointed by the Lenders as the Collateral
Monitoring Agent hereunder and under each other Credit Document, and each of the
Lenders irrevocably authorizes the Collateral Monitoring Agent to act with the
rights and duties expressly set forth herein and in the other Credit Document
regarding the Collateral Monitoring Agent. The Collateral Monitoring Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article VIII. Notwithstanding the use of the defined term
"Collateral Monitoring Agent," it is expressly understood and agreed that the
Collateral Monitoring Agent shall not have any fiduciary responsibilities to any
Lender by reason of this Agreement or any other Credit Document and that the
Collateral Monitoring Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Credit Documents. In its capacity as the Lenders' contractual
representative, the Collateral Monitoring Agent (a) does not hereby assume any
fiduciary duties to any of the Lenders, (b) is a "representative" of the Lenders
within the meaning of Section 9-102 of the Uniform Commercial Code as adopted in
the State of New York and (c) is acting as an independent contractor, the rights
and duties of which are limited to those expressly set forth in this Agreement
and the other Credit Documents. Each of the Lenders and the Administrative Agent
hereby agrees to assert no claim against the Collateral Monitoring Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Lender and the Administrative Agent hereby waives.

 

Section 8.02    Powers. The Administrative Agent, the Collateral Monitoring
Agent, and any Issuing Bank shall have and may exercise such powers under the
Credit Documents as are specifically delegated to the Administrative Agent, the
Collateral Monitoring Agent and the Issuing Banks, respectively, by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
None of the Administrative Agent, the Collateral Monitoring Agent nor any
Issuing Bank shall have any implied duties to the Lenders, or any obligation to
the Lenders to take any action thereunder except any action specifically
provided by the Credit Documents to be taken by the Administrative Agent, the
Collateral Monitoring Agent or the Issuing Banks, as applicable.

Section 8.03    General Immunity. None of the Administrative Agent, the
Collateral Monitoring Agent, any Issuing Bank or any of their respective
directors, officers, agents or employees shall be liable to the Borrowers or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Credit Document or in connection herewith or therewith except
for its or their own gross negligence or willful misconduct.

Section 8.04    No Responsibility for Loans, Recitals, etc. None of the
Administrative Agent, Collateral Monitoring Agent, any Issuing Bank or any of
their respective directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Credit Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Credit Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article III, except
receipt of items required to be delivered to the Administrative Agent and/or the
Collateral Monitoring Agent, as the case may be; (d) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Credit Document
or any other instrument or writing furnished in connection therewith; or (e) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Administrative Agent agrees to provide to the Lenders
copies of all information it receives from the Company under Section 5.05 that
is not otherwise delivered by the Company to the Lenders. None of the
Administrative Agent, the Collateral Monitoring Agent or any Issuing Bank shall,
however, have any duty to disclose to the Lenders information that is not
required to be furnished by the Company or any of its Subsidiaries to the
Administrative Agent, the Collateral Monitoring Agent or Issuing Bank at such
time, but is voluntarily furnished by the Company or any of its Subsidiaries to
the Administrative Agent, the Collateral Monitoring Agent or such Issuing Bank
(in its respective capacity as Administrative Agent, the Collateral Monitoring
Agent or Issuing Bank, as applicable, or in its individual capacity).

Section 8.05    Action on Instructions of Lenders. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Credit Document in accordance with written instructions signed by the
Majority Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Lenders hereby acknowledge that neither the Administrative Agent nor
the Collateral Monitoring Agent shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Credit Document unless it shall be requested in
writing to do so by the Majority Lenders. The Administrative Agent and the
Collateral Monitoring Agent shall each be fully justified in failing or refusing
to take any action hereunder and under any other Credit Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.

Section 8.06    Employment of Agents and Counsel. The Administrative Agent, the
Collateral Monitoring Agent and any Issuing Bank may execute any of their
respective duties as Administrative Agent, Collateral Monitoring Agent and
Issuing Bank hereunder and under any other Credit Document by or through
employees, agents, and attorneys in fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of the Administrative Agent, the
Collateral Monitoring Agent or attorneys in fact selected by either of them with
reasonable care. The Administrative Agent, the Collateral Monitoring Agent and
the Issuing Banks shall be entitled to advice of their respective counsels
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Credit Document.

Section 8.07    Reliance on Documents; Counsel. The Administrative Agent, the
Collateral Monitoring Agent and the Issuing Banks shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Administrative Agent or the
Collateral Monitoring Agent, as the case may be, which counsel may be employees
of Administrative Agent or Collateral Monitoring Agent, as the case may be.

Section 8.08    Reimbursement and Indemnification. THE LENDERS AGREE TO
REIMBURSE AND INDEMNIFY THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING
AGENT, AND ANY ISSUING BANK RATABLY IN PROPORTION TO THEIR RESPECTIVE PRO RATA
SHARES (I) FOR ANY AMOUNTS NOT REIMBURSED BY THE BORROWERS FOR WHICH THE
ADMINISTRATIVE AGENT, COLLATERAL MONITORING AGENT OR SUCH ISSUING BANK, AS
APPLICABLE, IS ENTITLED TO REIMBURSEMENT BY THE BORROWERS UNDER THE CREDIT
DOCUMENTS, (II) FOR ANY AMOUNTS NOT REIMBURSED BY THE BORROWERS FOR ANY OTHER
EXPENSES INCURRED BY THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING AGENT
OR SUCH ISSUING BANK ON BEHALF OF THE LENDERS, IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION AND ENFORCEMENT OF THE CREDIT
DOCUMENTS, AND (III) FOR ANY AMOUNTS NOT REIMBURSED BY THE BORROWERS FOR ANY
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT, THE
COLLATERAL MONITORING AGENT OR ANY ISSUING BANK IN ANY WAY RELATING TO OR
ARISING OUT OF THE CREDIT DOCUMENTS OR ANY OTHER DOCUMENT DELIVERED IN
CONNECTION THEREWITH OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR THE
ENFORCEMENT OF ANY OF THE TERMS THEREOF OR OF ANY SUCH OTHER DOCUMENTS, PROVIDED
THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL MONITORING AGENT OR SUCH ISSUING BANK. THE INDEMNIFICATION RIGHTS IN
FAVOR OF THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING AGENT AND THE
ISSUING BANK SHALL EXTEND ONLY TO COSTS AND EXPENSES INCURRED IN SUCH CAPACITIES
AND SHALL NOT INCLUDE ANY COSTS AND EXPENSES INCURRED IN THEIR INDIVIDUAL
CAPACITY AS A LENDER. THE OBLIGATIONS OF THE LENDERS UNDER THIS SECTION 8.08
SHALL SURVIVE PAYMENT OF THE OBLIGATIONS AND TERMINATION OF THIS AGREEMENT.

Section 8.09    Notice of Default. Neither the Administrative Agent nor the
Collateral Monitoring Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or an Event of Default hereunder unless the
Administrative Agent or the Collateral Monitoring Agent, as the case may be, has
received written notice from a Lender or a Borrower referring to this Agreement
describing such Default or of an Event of Default. In the event that the
Administrative Agent or the Collateral Monitoring Agent receives such a notice,
the Administrative Agent or the Collateral Monitoring Agent shall give prompt
notice thereof to the Lenders.

Section 8.10    Rights as a Lender. In the event that the Administrative Agent,
the Collateral Monitoring Agent or any Issuing Bank is a Lender, the
Administrative Agent, the Collateral Monitoring Agent and such Issuing Bank
shall have the same rights and powers hereunder and under any other Credit
Document as any Lender and may exercise the same as though it were not the
Administrative Agent, Collateral Monitoring Agent or Issuing Bank, as
applicable, and the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent, the Collateral Monitoring Agent or such Issuing Bank is a
Lender, unless the context otherwise indicates, include Administrative Agent,
the Collateral Monitoring Agent or such Issuing Bank, as applicable, in its
individual capacity. The Administrative Agent, the Collateral Monitoring Agent
and such Issuing Bank may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Credit Document, with the
Company or any of its Subsidiaries in which the Company or such Subsidiary is
not restricted hereby from engaging with any other Person. Neither the
Administrative Agent nor the Collateral Monitoring Agent, in its individual
capacity, is obligated to remain a Lender.

Section 8.11    Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Collateral
Monitoring Agent, any Issuing Bank or any other Lender and based on the
financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Credit Documents. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent, the Collateral Monitoring Agent, any Issuing Bank or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Credit Documents.

Section 8.12    Successor Administrative Agent, Collateral Monitoring Agent and
Issuing Bank. The Administrative Agent, the Collateral Monitoring Agent and each
Issuing Bank may resign at any time by giving prior written notice thereof to
the Lenders and the Company, such resignation to be effective upon the
appointment of a successor Administrative Agent, successor Collateral Monitoring
Agent or successor Issuing Bank, as applicable, or, if no successor
Administrative Agent, successor Collateral Monitoring Agent or successor Issuing
Bank, as applicable, has been appointed, 45 days after the retiring
Administrative Agent or Collateral Monitoring Agent, as the case may be, gives
notice of its intention to resign, or upon the Termination Date in the event the
retiring Administrative Agent or Collateral Monitoring Agent is a Terminated
Lender. Upon any such resignation of the Collateral Monitoring Agent and prior
to any appointment by the Majority Lenders of a successor Collateral Monitoring
Agent as provided herein, Calyon shall have the right to assume the rights and
obligations of the Collateral Monitoring Agent as successor Collateral
Monitoring Agent, provided Calyon exercises such right by giving written notice
thereof to the Lenders within twenty (20) days after the retiring Collateral
Monitoring Agent gives notice of its intention to resign. Upon any such
resignation of the Administrative Agent or an Issuing Bank, or if Calyon shall
decline to be the successor Collateral Monitoring Agent, the Majority Lenders
shall have the right to appoint, on behalf of the Borrowers and the Lenders, a
successor Administrative Agent, a successor Collateral Monitoring Agent or a
successor Issuing Bank, as applicable. If no successor Administrative Agent,
successor Collateral Monitoring Agent or successor Issuing Bank, as applicable,
shall have been so appointed by the Majority Lenders within thirty (30) days
after the resigning Administrative Agent's, resigning Collateral Monitoring
Agent's or resigning Issuing Bank's giving notice of its intention to resign,
then the resigning Administrative Agent, resigning Collateral Monitoring Agent
or resigning Issuing Bank, as applicable, may appoint, on behalf of the
Borrowers and the Lenders, a successor Administrative Agent, successor
Collateral Monitoring Agent or successor Issuing Bank, as applicable. If the
Administrative Agent has resigned and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrowers shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Administrative Agent, successor
Collateral Monitoring Agent or successor Issuing Bank, as applicable, shall be
deemed to be appointed hereunder until such successor Administrative Agent,
successor Collateral Monitoring Agent or successor Issuing Bank, as applicable,
has accepted the appointment. Any such successor Administrative Agent, successor
Collateral Monitoring Agent or successor Issuing Bank shall be a commercial bank
having capital and retained earnings of at least $100,000,000.00. Upon the
acceptance of any appointment as Administrative Agent, Collateral Monitoring
Agent or Issuing Bank, as applicable, hereunder by a successor Administrative
Agent, successor Collateral Monitoring Agent or successor Issuing Bank, such
successor Administrative Agent, successor Collateral Monitoring Agent or
successor Issuing Bank shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Administrative Agent,
resigning Collateral Monitoring Agent or resigning Issuing Bank. Upon the
effectiveness of the resignation of an Administrative Agent, Collateral
Monitoring Agent or Issuing Bank, the resigning Administrative Agent, resigning
Collateral Monitoring Agent or resigning Issuing Bank shall be discharged from
its duties and obligations hereunder and under the Credit Documents. After the
effectiveness of the resignation of an Administrative Agent, Collateral
Monitoring Agent or Issuing Bank, the provisions of this Article VIII shall
continue in effect for the benefit of the Administrative Agent, the Collateral
Monitoring Agent or Issuing Bank in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent, the Collateral
Monitoring Agent or Issuing Bank hereunder and under the other Credit Documents.

Section 8.13    Other Titles. None of the Arranger, the Book Runner, the
Documentation Agent and the Syndication Agent as listed on the cover page to
this Agreement shall have any rights, obligations, or duties in such capacities
under this Agreement and the other Credit Documents.

Section 8.14    Collateral Matters.

The Administrative Agent is authorized on behalf of the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time, to take any actions with respect to any Collateral or Security Documents
which may be necessary to perfect and maintain Acceptable Security Interests in
and Liens upon the Collateral granted pursuant to the Security Documents. The
Administrative Agent is further authorized on behalf of the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time, to take any action in exigent circumstances as may be reasonably necessary
to preserve any rights or privileges of the Lenders under the Credit Documents
or applicable Legal Requirements.

 

Each of the Lenders irrevocably authorize the Administrative Agent to release
any Lien granted to or held by the Administrative Agent upon any Collateral (i)
upon termination of the Commitments and payment in full of all outstanding
Advances and all other Obligations payable under this Agreement and under any
other Credit Document; (ii) constituting property sold or to be sold or disposed
of as part of or in connection with any disposition permitted under this
Agreement or the other Credit Documents; (iii) constituting property in which
any Loan Party owned no interest at the time the Lien was granted or at any time
thereafter; (iv) constituting property leased to any Loan Party under a lease
which has expired or has been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
such Loan Party to be, renewed or extended; (v) if approved, authorized or
ratified in writing by the Majority Lenders or all the Lenders, as the case may
be, as required by Section 11.01; or (vi) as otherwise permitted by this
Agreement. Upon the request of the Administrative Agent at any time, the Lenders
will confirm in writing the Administrative Agent's authority to release
particular types or items of Collateral pursuant to this Section 8.14.

 

Each Loan Party hereby irrevocably appoints the Administrative Agent as such
Loan Party's attorney-in-fact, with full authority to, after the occurrence of
an Event of Default, act for such Loan Party and in the name of such Loan Party
to, in the Administrative Agent's discretion upon the occurrence and during the
continuance of an Event of Default, file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of such Loan Party where permitted by law, to
receive, endorse, and collect any drafts or other instruments, documents, and
chattel paper which are part of the Collateral, and to ask, demand, collect, sue
for, recover, compromise, receive, and give acquittance and receipts for moneys
due and to become due under or in respect of any of the Collateral and to file
any claims or take any action or institute any proceedings which the
Administrative Agent may reasonably deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Administrative Agent with respect to any of the Collateral. The power of
attorney granted hereby is coupled with an interest and is irrevocable.

 

If any Loan Party fails to perform any covenant contained in this Agreement or
the other Security Documents, the Administrative Agent may itself perform, or
cause performance of, such covenant, and such Loan Party shall pay for the
expenses of the Administrative Agent incurred in connection therewith in
accordance with Section 11.04.

 

The powers conferred on the Administrative Agent under this Agreement and the
other Security Documents are solely to protect its interest in the Collateral
and shall not impose any duty upon it to exercise any such powers. Except for
the reasonable care of any Collateral in its possession and the accounting for
monies or other property actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care as to the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords its own property, provided that the
Administrative Agent shall have no responsibility for taking any necessary steps
to preserve rights against any parties with respect to any Collateral.

 

ARTICLE IX

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

Section 9.01    Successors and Assigns. The terms and provisions of the Credit
Documents shall be binding upon and inure to the benefit of the Borrowers and
the Lenders and their respective successors and assigns, except that (a) a
Borrower shall not have the right to assign its rights or obligations under the
Credit Documents and (b) any assignment by any Lender must be made in compliance
with Section 9.03. Notwithstanding clause (b) of this Section, any Lender may at
any time, without the consent of the Borrowers or the Administrative Agent,
pledge or assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank or any other Person; provided, however, that no
such pledge or assignment to a Federal Reserve Bank or any other Person shall
release the transferor Lender from its obligations hereunder. The Administrative
Agent may treat the payee of any Note as the owner thereof for all purposes
hereof unless and until such payee complies with Section 9.03 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Administrative Agent. Any assignee or transferee
of a Note agrees by acceptance thereof to be bound by all the terms and
provisions of the Credit Documents. Any request, authority, or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee, or assignee of such Note or of any Note or Notes
issued in exchange therefor.

Section 9.02    Participations.

Permitted Participants; Effect

. Any Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities
excluding entities classified by SIC code 1389 ("Participants") participating
interests in any Advances owing to such Lender, any Note held by such Lender,
any Commitment of such Lender or any other interest of such Lender under the
Credit Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Credit Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Credit Documents, all
amounts payable by the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrowers and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Credit
Documents.

 

Voting Rights

. Each Lender shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification, or waiver of any provision of the
Credit Documents other than any amendment, modification, or waiver which effects
any of the amendments, modifications or waivers referenced in clauses (a)
through (h) of Section 11.01.

 

Benefit of Setoff

. Each Borrower agrees that each Participant shall be deemed to have the right
of setoff provided in Section 7.05 in respect of its participating interest in
amounts owing under the Credit Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under the
Credit Documents; provided, that each Lender shall retain the right of setoff
provided in Section 7.05 with respect to the amount of participating interests
sold to each Participant; and provided further that such right of setoff shall
not be exercisable until five Business Days after the date upon which the
Company receives written notice of the fact that such Participant is a
Participant (it being understood that neither the Administrative Agent, the
Lender granting such participation nor the Participant shall be obligated to
give such notice). The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 7.05, agrees
to share with each Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared as if each Participant were a Lender.

 

Section 9.03    Assignments.

Permitted Assignments

. Any Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the Credit
Documents; provided, however, that in the case of an assignment to an entity
which is not a Lender or an Affiliate or Related Fund of a Lender, such
assignment shall be in a minimum amount of the lesser of (i) $5,000,000.00 and
(ii) all of such Lender's Commitments and Advances of the Class being assigned.
A Lender making an assignment shall also assign or cause such Lender's
affiliate, if any, who is a Swingline Bank to assign a portion of such Swingline
Bank's Swingline Advances to the assignee or an appropriate affiliate of the
assignee equal to the same portion of the Revolving Commitments and Revolving
Advances sold to such Assignee. No Swingline Bank may assign any portion of its
Swingline Advances unless it or its affiliate which has a Commitment assigns the
same portion of such Lender's Commitments and Advances to the Person or an
affiliate of the Person purchasing the assignment from such Swingline Bank. Such
assignment shall be made pursuant to an Assignment and Acceptance substantially
in the form of Exhibit A or in such other form as may be agreed to by the
parties thereto ("Assignment and Acceptance"). The consent of the Administrative
Agent and, so long as no Default is continuing, the Company shall be required
prior to an assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate or Related Fund thereof. Such consent shall not be
unreasonably withheld. Notwithstanding anything contained in this Section
9.03(a), no consent shall be required if an assignment is in connection with any
merger, consolidation, sale, transfer, or other disposition of all or any
substantial portion of the business or loan portfolio of the assigning Lender.

 

Effect; Effective Date

. Subject to the last sentence of this Section 9.03(b), upon (a) delivery to the
Administrative Agent of a notice of assignment, substantially in the form
attached as Exhibit I to the Assignment and Acceptance (a "Notice of
Assignment"), together with any consents required by Section 9.03(a) and (b)
payment of a $3,500.00 fee to the Administrative Agent for processing such
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. On and after the effective date of such
assignment, (i) such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Credit Document executed by the Lenders and shall have
all the rights and obligations of a Lender under the Credit Documents, to the
same extent as if it were an original party hereto, and (ii) the transferor
Lender shall be released with respect to the percentage of the Commitments and
Advances assigned to such Purchaser without any further consent or action by the
Borrowers, the Lenders, or the Administrative Agent. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 9.03(b), the transferor
Lender, the Administrative Agent, and the Borrowers shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Commitments, as adjusted
pursuant to such assignment. Notwithstanding anything contained in this Section
9.03(b) to the contrary, (A) a Lender may assign any or all of its rights
hereunder to an Affiliate of such Lender or a Related Fund without delivering an
executed Assignment and Acceptance or a Notice of Assignment to the
Administrative Agent or to any Loan Party and (B) the payment of any processing
fee shall not be required if such assignment is (i) to an Affiliate of a Lender
or a Related Fund or (ii) in connection with any merger, consolidation, sale,
transfer, or other disposition of all or any substantial portion of the business
or loan portfolio of the assigning Lender; provided, however, that (x)
Administrative Agent and the Loan Parties may continue to deal solely and
directly with the assigning Lender until an Assignment and Acceptance and a
Notice of Assignment has been delivered to the Administrative Agent, and (y) the
failure of such assigning Lender to deliver an Assignment and Acceptance or a
Notice of Assignment to the Administrative Agent shall not affect the legality,
validity or binding effect of such assignment.

Section 9.04    Dissemination of Information. Each Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Credit Documents by operation of law (each a "Transferee")
and any prospective Transferee any and all information in such Lender's
possession concerning the creditworthiness of the Company and its Subsidiaries.

Section 9.05    Tax Treatment. If any interest in any Credit Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.11(e).

Section 9.06    Registered Notes. Except as otherwise provided in this Section
9.06 with respect to assignments covered by the last sentence of Section
9.03(b), the Borrowers shall maintain, or cause to be maintained, a register
(the "Register") on which it enters the name of a Lender as the registered owner
of the Commitments and Advances held by such Lender. A loan so registered (a
"Registered Loan"), and the note if any, evidencing the same (a "Registered
Note") may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register (and each Registered Note shall expressly so
provide). Except as otherwise provided in this Section 9.06 with respect to
assignments covered by the last sentence of Section 9.03(b), any assignment or
sale of all or part of such Registered Loan (and the Registered Note, if any)
may be effected only by registration of such assignment or sale on the Register,
together with the surrender of the Registered Note, if any, duly endorsed by (or
accompanied by a written instrument of assignment or sale duly executed by) the
holder of such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the Registered Note, if any), the Borrowers shall treat the Person in
whose name such Registered Loan (and the Registered Note, if any) is registered
as the owner thereof for the purpose of receiving all payments thereon and for
all other purposes, notwithstanding notice to the contrary. In the case of an
assignment covered by the last sentence of Section 9.03(b), the Lender that is
the assignee shall maintain a comparable Register on behalf of Borrower. In the
event that a Lender sells participations in the Registered Loan, such Lender
shall maintain a register on which it enters the name of all participants in the
Registered Loans held by it (the "Participant Register"). A Registered Loan (and
the Registered Note, if any evidencing the same) may be participated in whole or
in part only by registration of such participation on the Participant Register
(and each Registered Note shall expressly so provide). Any participation of such
Registered Loan (and the Registered Note, if any) may be effected only by the
registration of such participation on the Participant Register.

 

ARTICLE X

AMENDMENT AND RESTATEMENT

Section 10.01    Original Credit Agreement. The amendments and restatements set
forth herein shall not cure any breach thereof or any "Default" or "Event of
Default" under and as defined in the Original Credit Agreement existing prior to
the date hereof. This Agreement is not in any way intended to constitute a
novation of the obligations and liabilities existing under the Original 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 Collateral Monitoring Agent's, the Lenders' and the Issuers' rights
and remedies under this Agreement and the other Credit Documents, shall apply to
all of the Obligations incurred under the Original Credit Agreement, the Notes
issued thereunder and the Letters of Credit issued thereunder.

Section 10.02    Acknowledgment of Obligations; Affirmation of Liens. Each
Borrower confirms and acknowledges that as of the Business Day immediately
preceding the Closing Date, the aggregate principal amount of all outstanding
Revolving Advances is $35,000,000 and the Letter of Credit Exposure is
$18,920,219. Each Borrower reaffirms the Liens granted pursuant to the Security
Documents to the Administrative Agent for the benefit of the Lenders and the
Issuers, which Liens shall continue in full force and effect during the term of
this Agreement and any renewals or extensions thereof and shall continue to
secure the Obligations.

Section 10.03    Limitations. This amendment and restatement is limited as
written and is not a consent to any other amendment, restatement, waiver or
other modification, whether or not similar, and, except as expressly provided
herein or in any other Credit Document, all terms and conditions of the Credit
Documents remain in full force and effect unless otherwise specifically amended
by this Agreement or any other Credit Document.

ARTICLE XI

MISCELLANEOUS

Section 11.01    Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrowers therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders and the Borrowers,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders and the Borrowers, do any of the following: (a) increase the Commitments
of the Lenders, (b) reduce the principal of, or interest on, the Notes or any
fees or other amounts payable hereunder or under any other Credit Document, (c)
postpone any date fixed for any scheduled payment or prepayment of principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, (d)
change the number of Lenders which shall be required for the Lenders or any of
them to take any action hereunder or under any other Credit Document, (e) amend,
modify or waive Sections 2.07(e), 2.12, 7.06 or 11.01, (f) release any Borrower
or Guarantor from its obligations under any Credit Document, (g) release all or
any substantial portion of the Collateral, (h) amend the definition of "Majority
Lenders" or "Pro Rata Share", (i) amend the definition of "Collateral Coverage
Amount" or amend the underlying definitions thereof if such amendment would have
the effect of changing the calculation of the Collateral Coverage Amount or (j)
contractually subordinate any of the Administrative Agent's Liens; and provided,
further, that (i) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent, the Collateral Monitoring Agent or the
Issuing Bank, as applicable, in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent, Collateral
Monitoring Agent or the Issuing Bank, as applicable, under this Agreement or any
other Credit Document and (ii) no waiver of any of the conditions specified in
Article III shall be effective against any Lender not executing such waiver. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Credit Document that relates only to the relationship of the
Lenders among themselves, and that does not affect the rights or obligations of
Borrowers or Guarantors, shall not require consent by or the agreement of
Borrowers or Guarantors.

Section 11.02    Notices, Etc. All notices and other communications shall be in
writing (including telecopy or telex) and mailed, telecopied, telexed, hand
delivered or delivered by a nationally recognized overnight courier, if to the
Company or any other Borrower, at its address as set forth on Schedule 1; if to
any Lender, at its specified Applicable Lending Office specified opposite its
name on Schedule 1; if to the Administrative Agent, the Collateral Monitoring
Agent or the Issuing Banks, at their respective addresses for notices set forth
in Schedule 1; and if a Notice of Borrowing or a Notice of Conversion or
Continuation to the Administrative Agent at the specified Applicable Lending
Office of Administrative Agent and, if different, the specified Applicable
Lending Office for Administrative Agent specified opposite its name on Schedule
1 or, as to each party, at such other address or teletransmission number as
shall be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telecopied, telexed or hand
delivered or delivered by overnight courier be effective: upon receipt, if
mailed, when telecopy transmission is completed, when confirmed by telex
answer-back or when delivered, respectively, except that notices and
communications to the Administrative Agent, the Collateral Monitoring Agent and
any Issuing Bank pursuant to Article II or VIII shall not be effective until
received by the Administrative Agent, the Collateral Monitoring Agent and any
Issuing Bank, as applicable.

Section 11.03    No Waiver; Remedies. No failure on the part of any Lender, the
Collateral Monitoring Agent or the Administrative Agent to exercise, and no
delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.

Section 11.04    Costs and Expenses. The Borrowers agree to pay on demand (a)
all reasonable out-of-pocket costs and expenses of the Administrative Agent and
each Issuing Bank and reasonable fees and out-of-pocket expenses of outside
counsel for the Administrative Agent and such Issuing Bank, in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other Credit Documents, (b) all reasonable
out-of-pocket costs and expenses of the Administrative Agent and each Issuing
Bank and reasonable fees and out-of-pocket expenses of outside counsel for the
Administrative Agent and such Issuing Bank in connection with advising the
Administrative Agent and such Issuing Bank with respect to their respective
rights and responsibilities under this Agreement, and (c) all reasonable
out-of-pocket costs and expenses of the Administrative Agent, each Issuing Bank
and each Lender and reasonable fees and out-of-pocket expenses of outside
counsel for the Administrative Agent, each Issuing Bank and each Lender in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other Credit Documents.

Section 11.05    Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers, the Administrative Agent and the
Issuing Banks, and when the Administrative Agent shall have, as to each Lender,
either received a counterpart hereof executed by such Lender or been notified by
such Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrowers, the Administrative Agent and
each Lender and their respective successors and assigns, except that a Borrower
shall not have the right to assign its rights or delegate its duties under this
Agreement or any interest in this Agreement without the prior written consent of
each Lender.

Section 11.06    Indemnification. EACH BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE ARRANGER, THE LENDERS AND EACH
AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
FROM, AND DISCHARGE, RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND
ALL LOSSES, LIABILITIES, CLAIMS OR DAMAGES TO WHICH ANY OF THEM MAY BECOME
SUBJECT, INSOFAR AS SUCH LOSSES, LIABILITIES, CLAIMS OR DAMAGES ARISE OUT OF OR
RESULT FROM (i)ANY ACTUAL OR PROPOSED USE BY THE COMPANY OR ANY AFFILIATE OF THE
COMPANY OF THE PROCEEDS OF ANY ADVANCE, (ii) ANY BREACH BY A BORROWER OF ANY
PROVISION OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, (iii) ANY
INVESTIGATION, LITIGATION OR OTHER PROCEEDING (INCLUDING ANY THREATENED
INVESTIGATION OR PROCEEDING) RELATING TO THE FOREGOING, OR (iv) ANY
ENVIRONMENTAL CLAIM OR REQUIREMENT OF ENVIRONMENTAL LAWS CONCERNING OR RELATING
TO THE PRESENT OR PREVIOUSLY OWNED OR OPERATED PROPERTIES, OR THE OPERATIONS OR
BUSINESS, OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND EACH BORROWER SHALL
REIMBURSE THE ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE ARRANGER, AND EACH
LENDER, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS, UPON DEMAND FOR ANY REASONABLE OUT-OF-POCKET EXPENSES
(INCLUDING LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH INVESTIGATION,
LITIGATION OR OTHER PROCEEDING; AND EXPRESSLY INCLUDING ANY SUCH LOSSES,
LIABILITIES, CLAIMS, DAMAGES, OR EXPENSES INCURRED BY REASON OF THE PERSON BEING
INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES,
CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE, BAD
FAITH OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED, OR IN THE CASE OF
CLAUSE (iv) ABOVE, CAUSED BY THE AFFIRMATIVE ACT OF THE ADMINISTRATIVE AGENT,
THE ISSUING BANKS, THE ARRANGER OR SUCH LENDER.

Section 11.07    Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

Section 11.08    Survival of Representations, Etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of a
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Lenders, none of which investigations
shall diminish any Lender's right to rely on such representations and
warranties. All obligations of the Borrowers provided for in Sections 2.08,
2.09, 2.11(c), and 11.06 shall survive any termination of this Agreement and
repayment in full of the Obligations.

Section 11.09    Severability. In case one or more provisions of this Agreement
or the other Credit Documents shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and enforceability of
the remaining provisions contained herein or therein shall not be affected or
impaired thereby.

Section 11.10    Usury Not Intended. It is the intent of the Borrowers and each
Lender in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable laws of the State of New York and the United States of America from
time to time in effect. In furtherance thereof, the Lenders and the Borrowers
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Lender receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrower). In the event that the maturity of the Notes are accelerated by
reason of any 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 may never include
more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
applicable Notes (or, if the applicable Notes shall have been paid in full,
refunded to the applicable Borrower of such interest). In determining whether or
not the interest paid or payable under any specific contingencies exceeds the
Maximum Rate, the Borrowers and the Lenders shall to the maximum extent
permitted under applicable law amortize, prorate, allocate and spread in equal
parts during the period of the full stated term of the Notes all amounts
considered to be interest under applicable law at any time contracted for,
charged, received or reserved in connection with the Obligations. The provisions
of this Section shall control over all other provisions of this Agreement or the
other Credit Documents which may be in apparent conflict herewith.

Section 11.11    Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from a Borrower hereunder in the
currency expressed to be payable herein (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the specified currency with such other currency at the Administrative
Agent's main New York office on the Business Day preceding that on which final,
non appealable judgment is given. The obligations of a Borrower in respect of
any sum due to any Lender or the Administrative Agent hereunder shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day following receipt by such
Lender or the Administrative Agent (as the case may be) of any sum adjudged to
be so due in such other currency such Lender or the Administrative Agent (as the
case may be) may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to such
Lender or the Administrative Agent, as the case may be, in the specified
currency, such Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Lender or the Administrative Agent, as the case may be, against such loss,
and if the amount of the specified currency so purchased exceeds (a) the sum
originally due to any Lender or the Administrative Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Lenders as a result
of allocations of such excess as a disproportionate payment to such Lender under
Section 2.12, such Lender or the Administrative Agent, as the case may be,
agrees to remit such excess to the Borrowers.

Section 11.12    Forbearance Agreements. The Administrative Agent and the
Lenders acknowledge that it is customary practice in certain areas where the
Company and its Subsidiaries conduct business for customers of offshore
construction companies such as the Company and its Subsidiaries to require
forbearance agreements from such contractor's secured creditors. The Lenders
authorize and direct the Administrative Agent to execute and deliver such
forbearance agreements in cases deemed appropriate by the Administrative Agent
in its sole discretion containing such terms as are reasonably acceptable to the
Administrative Agent.

Section 11.13    Governing Law. This Agreement and each of the other Credit
Documents (except as otherwise expressly set forth therein) shall be governed by
and interpreted in accordance with the law of the state of New York.

Section 11.14    Consent to Jurisdiction; Process Agent.

EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENTS AND
SUCH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS
AN INCONVENIENT FORUM. ANY JUDICIAL PROCEEDING BY A BORROWER AGAINST THE
ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING AGENT, THE ISSUING BANKS OR ANY
LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING
AGENT, THE ISSUING BANKS OR ANY LENDER OR BY THE ADMINISTRATIVE AGENT, THE
COLLATERAL MONITORING AGENT, THE ISSUING BANKS OR ANY LENDER OR ANY AFFILIATE OF
THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING AGENT, THE ISSUING BANKS OR
ANY LENDER AGAINST A BORROWER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT SHALL
BE BROUGHT ONLY IN A COURT IN NEW YORK.

 

The Mexican Borrower hereby irrevocably appoints CT Corporation System (the
"Process Agent"), with an office on the date hereof at 1633 Broadway, New York,
New York 10019, as its agent to receive on behalf of it and its Properties
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding. Such service may be made by mailing
by certified mail a copy of such process to the Mexican Borrower in care of the
Process Agent at the Process Agent's above address, with a copy to the Mexican
Borrower at its address specified herein, and the Mexican Borrower hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of service, the Mexican Borrower also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing by certified mail of copies of such process to it at
its address specified herein. The Mexican Borrower agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

 

Section 11.15    Waiver of Jury. The Borrowers, each Issuing Bank, the Lenders,
the Collateral Monitoring Agent and the Administrative Agent hereby irrevocably
waive any and all right to trial by jury in respect of any legal proceeding,
directly or indirectly, (whether sounding in tort, contract or otherwise)
arising out of or relating to this Agreement, any other Credit Document, any of
the transactions contemplated hereby, or the relationship established hereunder.

Section 11.16    USA Patriot Act Notification. 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 on October 26, 2001) (the "Act"), it is required
to obtain, verify and record information that identifies each Borrower, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify each Borrower in accordance with the
Act. Each of the Borrowers agrees to cooperate with each Lender and provide
true, accurate and complete information to such Lender in response to any such
request.

> EXECUTED effective as of the 6th day of August, 2004.

> BORROWERS:
> 
> GLOBAL INDUSTRIES, LTD.
> 
> 
> 
> By: __________________________________
> 
> Name: Peter S. Atkinson
> 
> Title: President
> 
>  
> 
> GLOBAL OFFSHORE MEXICO, S. DE R.L. DE C.V
> 
>  
> 
> By: __________________________________
> 
> Name: Peter S. Atkinson
> 
> Title: Attorney-in-Fact/Apoderado
> 
>  

> CALYON NEW YORK BRANCH,
> 
> as Administrative Agent, Issuing Bank and as a Lender
> 
>  
> 
> By: ___________________________________
> 
> Name:
> 
> Title:

> WELLS FARGO FOOTHILL, INC.,
> 
> as Collateral Monitoring Agent and as a Lender
> 
>  
> 
> By: ___________________________________
> 
> Name:
> 
> Title: Vice President
> 
>  

> LENDERS
> 
> :

> WHITNEY NATIONAL BANK
> 
>  
> 
> By: ___________________________________
> 
> Name:
> 
> Title:

> COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES
> 
>  
> 
> By: __________________________________
> 
> Name:
> 
> Title:
> 
> By: __________________________________
> 
> Name:
> 
> Title:

> NATEXIS BANQUES POPULAIRES
> 
>  
> 
> By: ___________________________________
> 
> Name:
> 
> Title:
> 
> By: ___________________________________
> 
> Name:
> 
> Title:

> ABLECO FINANCE LLC
> 
>  
> 
> By: ___________________________________
> 
> Name:
> 
> Title:

 

 

EXHIBIT C

FORM OF Amended and Restated GUARANTY

This Amended and Restated Guaranty dated as of [____________, _____]
("Guaranty") is by each of the entities named on the signature pages hereto
(each a "Guarantor" and collectively, the "Guarantors"), in favor of Calyon New
York Branch, as administrative agent ("Secured Party") for the Credit Parties
(as defined below).

INTRODUCTION

A. Global Industries, Ltd., a Louisiana corporation (the "Parent Borrower"), and
Global Offshore Mexico, S. de R.L. de C.V., a Mexican sociedad de
responsabilidad limitada de capital variable (the "Mexican Borrower" and,
together with the Parent Borrower, the "Borrowers"), have entered into a Credit
Agreement dated as of March 9, 2004 (as amended, modified, supplemented or
restated from time to time, the "Existing Credit Agreement," the defined terms
of which are used in this Guaranty unless otherwise defined herein) together
with the lenders party thereto, and Calyon New York Branch, as administrative
agent for such lenders, providing for the making of Advances by the Lenders and
the Swingline Bank, and the issuance of Letters of Credit by the Issuing Bank.

B. The Parent Borrower may from time to time enter into one or more Rate Hedging
Agreements with a Lender or an affiliate of a Lender (any such Lender or
affiliate party to a Rate Hedging Agreement being referred to herein as a "Swap
Counterparty," and together with the Secured Party, the Lenders, the
Administrative Agent, the Issuing Bank, and the Swingline Bank, collectively
referred to herein as the "Credit Parties").

C. [The Parent Borrower is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Parent Borrower has
made capital contributions and advances to its Subsidiaries, including the
Guarantors. Each of the Guarantors is a wholly owned direct or indirect
subsidiary of the Parent Borrower and will derive substantial direct or indirect
benefit from the transactions contemplated by the Credit Agreement.]

D. [The Mexican Borrower is the principal financing entity for all capital
requirements of the Guarantors, and from time to time the Mexican Borrower has
made advances to the Guarantors. Each of the Guarantors will derive substantial
direct or indirect benefit from the transactions contemplated by the Credit
Agreement.]

E. The Obligations of the Borrowers under the Existing Credit Agreement and any
Rate Hedging Agreement, and the Obligations of the Guarantors under the other
Credit Documents, are guarantied by the Guarantors pursuant to the Guaranty
dated as of March 9, 2004 (the "Existing Guaranty") executed by such Guarantors
in favor of the Secured Party for the ratable benefit of the Credit Parties.

F. The parties to the Existing Credit Agreement have agreed to amend and restate
the Existing Credit Agreement pursuant to that certain Amended and Restated
Credit Agreement, dated August 6, 2004, among the Borrowers, the financial
institutions party thereto as lenders ("Lenders"), Calyon New York Branch, in
its capacity as Administrative Agent, and Wells Fargo Foothill, Inc., in its
capacity as Collateral Monitoring Agent (as further amended, modified,
supplemented, restated, replaced, extended or renewed from time to time, the
"Credit Agreement"), and as a condition precedent to the amendment and
restatement thereof, the Existing Guaranty is being amended and restated in its
entirety as set forth herein.

        Therefore, in order to induce the Lenders to make the Advances, the
Issuing Bank to issue Letters of Credit, and the Swap Counterparties to enter
into Rate Hedging Agreements, each of the Guarantors hereby agrees with Secured
Party for its benefit and the ratable benefit of the other Credit Parties as
follows:

Section 1.    Guaranty. Each of the Guarantors, jointly and severally, hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
[the [Parent] [Mexican] Borrower] [any guarantors of the foregoing Obligations]
now or hereafter existing under the Credit Agreement, the Notes, and any other
Credit Document, whether for principal, Reimbursement Obligations, Rate Hedging
Obligations owing to any Swap Counterparty, interest, fees, expenses,
indemnification or otherwise (all such obligations being the "Guaranteed
Obligations"), and any and all expenses (including reasonable counsel fees and
expenses) incurred by the Secured Party, the Administrative Agent, the
Collateral Monitoring Agent, the Issuing Bank, any Lender, or any other Credit
Party in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts which constitute part of the Guaranteed Obligations even if such
Guaranteed Obligations are declared unenforceable or not allowable in a
bankruptcy, reorganization, or similar proceeding involving [the [Parent]
[Mexican] Borrower] [such guarantor of such forgoing Obligations]. This Guaranty
is a guarantee of payment, not of collection, and the Guarantors are primarily
liable for the payment of the Guaranteed Obligations.

Section 2.    [Limit of Liability. Each of the Guarantors shall be liable under
this Guaranty only to the extent of the greater of (i) the "reasonably
equivalent value" or "fair consideration" (or equivalent concept) received by
each such Guarantor in exchange for the obligation incurred hereunder, within
the meaning of any applicable state or federal fraudulent conveyance or transfer
laws, (ii) the lesser of (A) the maximum amount that will not render such
Guarantor insolvent and (B) the maximum amount that will not leave such
Guarantor with an unreasonably small capital (with clauses (A) and (B) being
determined pursuant to and as of the appropriate date mandated by such
applicable state or federal fraudulent conveyance or transfer laws, and (iii)
the largest amount that would not render such Guarantor's obligations hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any state law.]

Section 3.    Guaranty Absolute. Each of the Guarantors guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Agreement and the other Credit Documents, regardless of any law,
regulation, or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Secured Party, the Administrative Agent,
the Collateral Monitoring Agent, the Issuing Bank, any Lender, or any other
Credit Party with respect thereto. The obligations of each Guarantor under this
Guaranty are independent of the Guaranteed Obligations and are joint and several
with any other guarantor of the Guaranteed Obligations in each and every
particular, and a separate action or actions may be brought and prosecuted
against any Borrower, any Guarantor, any other guarantor of the Guaranteed
Obligations, or any other Person regardless of whether any other Borrower, any
other Guarantor, any other guarantor of the Guaranteed Obligations, or any other
Person is joined in any such action or actions. The liability of each Guarantor
under this Guaranty shall be absolute and unconditional irrespective of:

The unenforceability of the Guaranteed Obligations or any Credit Document (other
than this Guaranty against such Guarantor) for any reason whatsoever, including
that the act of creating the Guaranteed Obligations is ultra vires, that the
officers or representatives executing the documents creating the Guaranteed
Obligations exceeded their authority, that the Guaranteed Obligations violate
usury or other laws, or that the [Parent][Mexican] Borrower has defenses to the
payment of the Guaranteed Obligations, including breach of warranty, statute of
frauds, bankruptcy, statute of limitations, lender liability, or accord and
satisfaction;

 

Any change in the time, manner, or place of payment of, or in any term of, any
of the Guaranteed Obligations, any increase, reduction, extension, or
rearrangement of the Guaranteed Obligations, any amendment, supplement, or other
modification of the Credit Documents, or any waiver or consent granted under the
Credit Documents, including waivers of the payment and performance of the
Guaranteed Obligations;

 

Any release, exchange, subordination, waste, or other impairment (including
negligent, willful, unreasonable, or unjustifiable impairment) of any collateral
securing payment of the Guaranteed Obligations; the failure of the Secured
Party, the Administrative Agent, the Collateral Monitoring Agent, the Issuing
Bank, any Lender, any other Credit Party or any other person to exercise
diligence or reasonable care in the preservation, protection, enforcement, sale,
or other handling of such collateral; the fact that any security interest, lien,
or assignment related to any collateral for the Guaranteed Obligations shall not
be properly perfected, or shall prove to be unenforceable or subordinate to any
other security interest, lien, or assignment;

 

Any full or partial release of the [Parent][Mexican] Borrower, any Guarantor, or
any other person liable for the payment of the Guaranteed Obligations (other
than the full or partial release of such Guarantor);

 

The failure to apply or the manner of applying payments of the proceeds of
collateral against the Guaranteed Obligations;

 

Any change in the organization or structure of the [Parent][Mexican] Borrower,
any Guarantor, or any other person liable for the payment of the Guaranteed
Obligations; any change in the shareholders, directors, or officers of the
[Parent][Mexican] Borrower or any other person liable for the payment of the
Guaranteed Obligations; or the insolvency, bankruptcy, liquidation, or
dissolution of the [Parent][Mexican] Borrower or any other person liable for the
payment of the Guaranteed Obligations;

 

The failure to give notice of any extension of credit made by the Secured Party,
the Administrative Agent, the Collateral Monitoring Agent, the Issuing Bank, any
Lender or any other Credit Party to the [Parent][Mexican] Borrower, notice of
acceptance of this Guaranty, notice of any amendment, supplement, or other
modification of any Credit Document, notice of the execution of any document or
agreement creating new Guaranteed Obligations, notice of any default or event of
default, however denominated, under the Credit Documents, notice of intent to
demand, notice of demand, notice of presentment for payment, notice of
nonpayment, notice of intent to protest, notice of protest, notice of grace,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
notice of bringing of suit, notice of the Secured Party, the Administrative
Agent, the Collateral Monitoring Agent, the Issuing Bank, any Lender or any
other Credit Party's transfer of the Guaranteed Obligations, notice of the
financial condition of or other circumstances regarding the [Parent][Mexican]
Borrower or any other Obligor, or any other notice of any kind relating to the
Guaranteed Obligations;

 

Any payment or grant of collateral by any Obligor to the Secured Party, the
Administrative Agent, the Collateral Monitoring Agent, the Issuing Bank, any
Lender or any other Credit Party being held to constitute a preference under
bankruptcy laws, or for any reason the Secured Party, the Administrative Agent,
the Collateral Monitoring Agent, the Issuing Bank, any Lender or any other
Credit Party is required to refund such payment or release such collateral;

 

Any other action taken or omitted which affects the Guaranteed Obligations,
whether or not such action or omission prejudices any Guarantor or increases the
likelihood that any Guarantor will be required to pay the Guaranteed Obligations
pursuant to the terms hereof;

 

The fact that all or any of the Guaranteed Obligations cease to exist by
operation of law, including, without limitation, by way of discharge, limitation
or tolling thereof under applicable bankruptcy laws; and

 

Any other circumstances which might otherwise constitute a defense available to,
or a discharge of the [Parent][Mexican] Borrower or any Guarantor (other than
the discharge of such Guarantor).

Section 4.    Certain Waivers.

                    4.01    Notice and Other Remedies. Each of the Guarantors
hereby waives promptness, diligence, notice of acceptance, notice of
acceleration, notice of intent to accelerate, and any other notice with respect
to any of the Guaranteed Obligations and this Guaranty and any requirement that
the Secured Party, the Administrative Agent, the Collateral Monitoring Agent,
the Issuing Bank, any Lender or any other Credit Party protect, secure, perfect
or insure any security interest or other Lien or any Property subject thereto or
exhaust any right to take any action against the [Parent][Mexican] Borrower or
any other Person or any collateral.

                    4.02    Waiver of Subrogation and Contribution. Until such
time as the Guaranteed Obligations are irrevocably paid in full, each of the
Guarantors hereby irrevocably waives any claim or other rights which it may
acquire against the [Parent][Mexican] Borrower or any other guarantor of the
Guaranteed Obligations that arise from such Guarantor's Guaranteed Obligations
under this Guaranty or any other Credit Document, including, without limitation,
any right of subrogation (including, without limitation, any statutory rights of
subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. § 509),
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of the Secured Party, the Administrative
Agent, the Collateral Monitoring Agent, the Issuing Bank, any Lender or any
other Credit Party against the [Parent][Mexican] Borrower or any collateral
which the Secured Party, the Administrative Agent, the Collateral Monitoring
Agent, the Issuing Bank, any Lender or any other Credit Party now has or
acquires. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and the Guaranteed Obligations shall not have been paid in
full, such amount shall be held in trust for the benefit of the Secured Party,
the Administrative Agent, the Collateral Monitoring Agent, the Issuing Bank, the
Lenders and any other Credit Parties, and shall promptly be paid to the Secured
Party for the benefit of the Secured Party, the Administrative Agent, the
Collateral Monitoring Agent, the Issuing Bank, the Lenders and any other Credit
Parties to be applied to the Guaranteed Obligations, whether matured or
unmatured, as the Secured Party may elect. Each of the Guarantors acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreement and that the waiver set forth
in this Section 4.02(a) is knowingly made in contemplation of such benefits.

            b.    Each of the Guarantors agrees that, to the extent that the
[Parent][Mexican] Borrower makes payments to the Secured Party, the
Administrative Agent, the Collateral Monitoring Agent, the Issuing Bank, any
Lender or any other Credit Party, or the Secured Party, the Administrative
Agent, the Collateral Monitoring Agent, the Issuing Bank, any Lender or any
other Credit Party receives any proceeds of collateral, and such payments or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, or otherwise required to be repaid, then
to the extent of such repayment the Guaranteed Obligations shall be reinstated
and continued in full force and effect as of the date such initial payment or
collection of proceeds occurred. EACH OF THE GUARANTORS SHALL INDEMNIFY THE
SECURED PARTY, THE ADMINISTRATIVE AGENT, THE COLLATERAL MONITORING AGENT, THE
ISSUING BANK, THE LENDERS, AND ANY OTHER CREDIT PARTIES AND EACH AFFILIATE
THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM, AND
DISCHARGE, RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT,
INSOFAR AS SUCH LOSSES, LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES ARISE OUT OF OR RESULT
FROM (I) ANY ACTUAL OR PROPOSED USE BY THE [PARENT] [MEXICAN] BORROWER OR ANY
AFFILIATE OF THE [PARENT] [MEXICAN] BORROWER OF THE PROCEEDS OF ANY ADVANCE,
(II) ANY BREACH BY ANY GUARANTOR OF ANY PROVISION OF THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT, (III) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING
(INCLUDING ANY THREATENED INVESTIGATION OR PROCEEDING) RELATING TO THE
FOREGOING, OR (IV) ANY ENVIRONMENTAL CLAIM OR REQUIREMENT OF ENVIRONMENTAL LAWS
CONCERNING OR RELATING TO THE PRESENT OR PREVIOUSLY-OWNED OR OPERATED
PROPERTIES, OR THE OPERATIONS OR BUSINESS, OF ANY GUARANTOR OR ANY OBLIGOR, AND
EACH OF THE GUARANTORS SHALL REIMBURSE THE SECURED PARTY, THE ADMINISTRATIVE
AGENT, THE COLLATERAL MONITORING AGENT, THE ISSUING BANK, EACH LENDER AND EACH
OTHER CREDIT PARTY, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS, UPON DEMAND FOR ANY REASONABLE OUT-OF-POCKET
EXPENSES (INCLUDING LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH
INVESTIGATION, LITIGATION OR OTHER PROCEEDING; AND EXPRESSLY INCLUDING ANY SUCH
LOSSES, LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, DISBURSEMENTS, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF
THE PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES,
LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, DISBURSEMENTS, CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.

                    4.03    Special Mexican Law Provisions. Each of the
Guarantors irrevocably waives the rights granted by Articles 2848 and 2849 of
the Civil Code for the Federal District of the United Mexican States, and its
correlatives articles of the Federal Civil Code and Civil Codes for the rest of
the States of the United Mexican States. The Guarantors hereby irrevocably and
unconditionally waive the benefits of orden, excusión, división, quita, prórroga
and espera contained in Articles 2814, 2815, 2817, 2818, 2819, 2820, 2821, 2822,
2823, 2827, 2837, 2838, 2839, 2840, 2841 of the Civil Code for the Federal
District, and its correlatives articles of the Federal Civil Code and the Civil
Codes for the rest of the States of the United Mexican States. The Guarantors
also hereby irrevocably and unconditionally waives the provisions of Articles
2830, 2836, 2842, 2844, 2845, 2846 and 2847 of the Civil Code for the Federal
District, and its correlatives articles of the Federal Civil Code and the Civil
Codes for the rest of the States of the United Mexican States. The Guarantors
further agree that their obligations and liabilities for the prompt and punctual
payment, performance and satisfaction of the Obligations are independent of any
agreement or transaction with any third parties and shall be on a "joint and
several" and "solidary" basis along with the Borrowers to the same degree and
extent as if the Guarantors had been and/or will be a co-principal obligors
and/or co-maker of the Obligations. Each of the Guarantors obligations and
liabilities under the Agreement shall be on a "joint and several" and "solidary"
basis along with such other Guarantors.

 

Section 5.    Representations and Warranties. Each of the Guarantors hereby
represents and warrants as follows:

Business Existence

. Each of the Guarantors is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its organization and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of Property or conduct of its business requires such qualification and
where a failure to be qualified could reasonably be expected to cause a Material
Adverse Change.

 

Corporate Power

. The execution, delivery, and performance by each of the Guarantors of this
Guaranty and the other Credit Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby (a) are within
such Guarantor's powers and its By-laws includes the authority to guarantee
third party obligations, (b) have been duly authorized by all necessary action,
(c) do not contravene (i) such Guarantor's organizational and constitutional
documents or (ii) any law or any contractual restriction binding on or affecting
such Guarantor or its Property, and (d) will not result in or require the
creation or imposition of any Lien prohibited by the Credit Agreement.

 

Authorization and Approvals

. No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority is required for the due execution, delivery and
performance by the Guarantors of this Guaranty or the other Credit Documents to
which any Guarantor is a party or the consummation of the transactions
contemplated thereby.

 

Enforceable Obligations

. This Guaranty and the other Credit Documents to which the Guarantor is a party
have been duly executed and delivered by the Guarantor. Each Credit Document to
which the Guarantors are a party is the legal, valid, and binding obligation of
each of the Guarantors and is enforceable against each of the Guarantors in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally.

Section 6.    Covenants.

Each of the Guarantors will comply with all provisions of Articles V and VI of
the Credit Agreement to the extent such Sections are applicable to such
Guarantor.

 

In the event that the Administrative Agent wishes to enforce the guarantee
contained in Section 1 hereof against a Guarantor, it shall make written demand
for payment from such Guarantor, without any judicial declaration to such
effect, provided that no such demand shall be required if such Guarantor is in
bankruptcy, liquidation, or other insolvency proceedings, and provided that
failure by the Administrative Agent to make such demand shall not affect any
Guarantor's obligations under this Guaranty.

 

All indebtedness of any Guarantor (hereinafter in this section, "such
Guarantor") to another Guarantor or the Parent Borrower or any of its
Subsidiaries shall be subordinated to all indebtedness of such Guarantor to the
Administrative Agent and the Lenders under the Credit Agreement (the "Senior
Indebtedness"), as follows:

 

In the event of any insolvency, concurso or bankruptcy proceedings, or any
receivership liquidation, reorganization, or other similar proceedings in
connection therewith, relative to such Guarantor, or to its property, or in the
event of any proceedings for voluntary liquidation, dissolution, or other
winding up of such Guarantor, whether or not involving insolvency, concurso or
bankruptcy, then the holders of the Senior Indebtedness shall be entitled to
receive payment in full of all Senior Indebtedness before any other Guarantor or
the Parent Borrower or any of its Subsidiaries shall receive any payment on
account of principal or interest due such Person from such Guarantor;

 

After the occurrence and during the continuance of an Event of Default, such
Guarantor shall not exercise or attempt to exercise any right of offset or
counterclaim in respect of any of its obligations to any other Guarantor or the
Parent Borrower or any of its Subsidiaries if the effect thereof shall be to
reduce the amount of any payment to which the holders of Senior Indebtedness
would be entitled in the absence of such offset or counterclaim; and if and to
the extent that, notwithstanding the foregoing, such Guarantor is required by
any mandatory provisions of law to exercise any such right of offset or
counterclaim, each reduction of the amount owing on the account of the principal
of or premium (if any) or interest owed to any other Guarantor or the Parent
Borrower or any of its Subsidiaries by reason of such offset or counterclaim
shall be deemed to be a payment by such Guarantor in a like amount in respect of
such amounts which clause (iv) below shall apply;

 

Following the occurrence and during the continuance of any Event of Default, (A)
payment of the principal or interest upon any indebtedness owed to any other
Guarantor or the Parent Borrower or any of its Subsidiaries shall not be made
thereunder until payment in full of all Senior Indebtedness has been made and
(B) the holders of the Senior Indebtedness shall be entitled to receive payment
in full of all Senior Indebtedness prior to the entitlement of any other
Guarantor or the Parent Borrower or any of its Subsidiaries to receive any
payment of the principal or interest (except for payments which have been made
prior to the occurrence of such Event of Default);

If, notwithstanding the provisions of the foregoing subparagraphs (i) through
(iii), any payment or distribution on any indebtedness shall be received by any
other Guarantor or the Parent Borrower or any of its Subsidiaries while an Event
of Default exists and before the holders of the Senior Indebtedness shall have
received payment in full on all Senior Indebtedness, such payment or
distribution shall be (and shall be deemed to be) held in trust for the benefit
of, and shall be paid over or delivered or transferred to, the holders of the
Senior Indebtedness for application to the payment of all Senior Indebtedness
held by such holder to the extent necessary to satisfy such Senior Indebtedness;
and

 

No present or future holder of Senior Indebtedness shall be prejudiced in its
right to enforce subordination of any other Guarantor or the Parent Borrower or
any of its Subsidiaries by any act or failure to act on the part of such
Guarantor whether or not such act or failure shall give rise to any right of
rescission or other claim or cause of action on the part of any other Guarantor
or the Parent Borrower or any of its Subsidiaries. The provisions of the
foregoing paragraphs with respect to subordination are solely for the purpose of
defining the relative rights of the holders of Senior Indebtedness on the one
hand, and any other Guarantor or the Parent Borrower or any of its Subsidiaries
on the other hand, and none of such provisions shall impair, as between such
Guarantor and any other Guarantor or the Parent Borrower or any of its
Subsidiaries, the obligation of such Guarantor, which is unconditional and
absolute, to pay to any other Guarantor or the Parent Borrower or any of its
Subsidiaries the principal and interest of any indebtedness in accordance with
its terms, nor shall anything in such provisions prevent any other Guarantor or
the Parent Borrower or any of its Subsidiaries from exercising all remedies
otherwise permitted by applicable law or hereunder upon default hereunder,
subject to the rights of holders of Senior Indebtedness under such provisions.

Section 7.    Miscellaneous.

                7.01    Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantors therefrom shall
be effective unless the same shall be in writing and signed by the Secured
Party, the Administrative Agent, the Majority Lenders and the [Parent][Mexican]
Borrower; provided that any amendment or waiver releasing any Guarantor from any
liability hereunder shall be signed by all the Credit Parties and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

                7.02    Addresses for Notices. All notices and other
communications to any Person provided for hereunder shall be delivered to the
address of such Person set forth next to the signatures below, or to such other
address as shall be designated by the Guarantors or the Secured Party in written
notice to the other party. All such notices or communications shall be effective
as set forth in the Credit Agreement.

                7.03    No Waiver; Remedies. No failure on the part of the
Secured Party, the Administrative Agent, the Issuing Bank, any Lender or any
other Credit Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

                    7.04    Right of Set-Off. Upon (a) the occurrence and during
the continuance of any Default and (b) the making of the request or the granting
of the consent, if any, specified by Section 7.02 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes and any other amounts
payable under the Credit Agreement due and payable pursuant to the provisions of
such Section 7.02 or the automatic acceleration of the Notes and all amounts
payable under the Credit Agreement pursuant to Section 7.03 thereunder, the
Secured Party, the Administrative Agent, the Issuing Bank, each Lender and each
other Credit Party is hereby authorized at any time, to the fullest extent
permitted by law, to set off and apply any deposits (general or special, time or
demand, provisional or final) and other indebtedness owing by the Secured Party,
the Administrative Agent, the Issuing Bank, such Lender, or such other Credit
Party to the accounts of the Guarantors against any and all of the obligations
of the Guarantors under this Guaranty, irrespective of whether or not the
Secured Party, the Administrative Agent, the Issuing Bank, such Lender or such
other Credit Party shall have made any demand under this Guaranty and although
such obligations may be contingent and unmatured. The Secured Party, the
Administrative Agent, the Issuing Bank, each Lender and each other Credit Party
agrees promptly to notify the Guarantors after any such set-off and application
made by the Secured Party, the Administrative Agent, the Issuing Bank, such
Lender or such other Credit Party provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Secured Party, the Administrative Agent, the Issuing Bank, the Lenders and the
other Credit Parties under this Section 7.04 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Secured Party, the Administrative Agent, the Issuing Bank, the Lenders and the
other Credit Parties may have.

                7.05    Continuing Guaranty; Assignments under Credit Agreement.
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the indefeasible payment in full of the Guaranteed Obligations and
all other amounts payable under this Guaranty, (b) be binding upon the
Guarantors and their respective successors and assigns, (c) inure to the benefit
of, and be enforceable by, the Secured Party, the Administrative Agent, the
Collateral Monitoring Agent, the Issuing Bank, each of the Lenders and each of
the other Credit Parties and their respective successors, transferees and
assigns, and (d) not be terminated by any Guarantor or any other Person. Without
limiting the generality of the foregoing clause (c), the Issuing Bank, any
Lender and any other Credit Party may assign or otherwise transfer all or any
portion of its rights and Guaranteed Obligations under the Credit Documents in
accordance with the Credit Agreement and the assignee shall thereupon become
vested with all the benefits in respect thereof granted to the Issuing Bank,
such Lender or such other Credit Party herein or otherwise. Upon the
indefeasible payment in full and termination of the Guaranteed Obligations, the
guaranty granted hereby shall terminate and all rights hereunder shall revert to
the Guarantor to the extent such rights have not been applied pursuant to the
terms hereof. Upon any such termination, the Secured Party will, at each
Guarantor's expense, execute and deliver to such Guarantor such documents as
such Guarantor shall reasonably request and take any other actions reasonably
requested to evidence or effect such termination. This Guaranty is not
assignable by any Guarantor without the written consent of all of the Credit
Parties.

                7.06    Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from a Guarantor
hereunder in the currency expressed to be payable herein (the "specified
currency") into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Secured Party
could purchase the specified currency with such other currency at the Secured
Party's main New York office on the Business Day preceding the day on which
final, non-appealable judgment is given. The obligations of a Guarantor in
respect of any sum due to the Secured Party hereunder shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Business Day following receipt by the Secured Party of
any sum adjudged to be so due in such other currency the Secured Party may in
accordance with normal, reasonable banking procedures purchase the specified
currency with such other currency. If the amount of the specified currency so
purchased is less than the sum originally due to the Secured Party in the
specified currency, such Guarantor agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify the Secured Party against such loss, and if the amount of
the specified currency so purchased exceeds (a) the sum originally due to the
Secured Party in the specified currency and (b) any amounts shared with other
Lenders as a result of allocations of such excess as a disproportionate payment
to such Lender under Section 2.12 of the Credit Agreement, the Secured Party
agrees to remit such excess to such Guarantor.

                7.07    Governing Law; Submission to Jurisdiction.

a.    This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, except to the extent
provided in Section 7.07(b) hereof and to the extent that the federal laws of
the United States of America may otherwise apply.

 

b.    Notwithstanding anything in Section 7.07(a) hereof to the contrary,
nothing in this Guaranty shall be deemed to constitute a waiver of any rights
which the Secured Party, the Administrative Agent, the Issuing Bank, any of the
Lenders or any of the other Credit Parties may have under the National Bank Act
or other federal law, including without limitation the right to charge interest
at the rate permitted by the laws of the state where the Secured Party, the
Administrative Agent, the Issuing Bank, the applicable Lender or any other
applicable Credit Party is located.

 

c.    EACH OF THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
CREDIT DOCUMENTS AND EACH OF THE GUARANTORS HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM.

d.    EACH OF THE GUARANTORS HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM
(THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW
YORK, NEW YORK 10019, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTIES
SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING
BY CERTIFIED MAIL A COPY OF SUCH PROCESS TO SUCH GUARANTOR IN CARE OF THE
PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, WITH A COPY TO SUCH
GUARANTOR AT ITS ADDRESS SPECIFIED ON THE SIGNATURE PAGES HERETO, AND EACH
GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, EACH GUARANTOR
ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING BY CERTIFIED MAIL OF COPIES OF SUCH PROCESS
TO IT AT ITS ADDRESS FOR NOTICE SPECIFIED IN SECTION 7.02 HEREOF. EACH GUARANTOR
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.

e.    EACH OF THE GUARANTORS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY,
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS GUARANTY, ANY OTHER CREDIT DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. ANY
JUDICIAL PROCEEDING BY ANY OF THE GUARANTORS INVOLVING, DIRECTLY OR INDIRECTLY,
THIS GUARANTY, OR ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY OTHER CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK.

                7.08    Restatement. The amendment and restatement contained
herein shall not, in any manner, be construed to constitute payment of, or
impair, limit, cancel or extinguish, or constitute a novation in respect of, the
indebtedness and other obligations and liabilities of the Guarantors evidenced
by or arising under the Credit Documents.

[The rest of this page has been left blank intentionally.]

 

 

 

 

 

Each of the Guarantors has caused this Guaranty to be duly executed as of the
date first above written.

                                                                       
[GUARANTORS]

                                                                        By:
_________________________________

                                                                        Name:
______________________________

                                                                        Title:
_______________________________

                                                                       

                                                                        Address:
____________________________

                                                                       
Attention: ___________________________

                                                                       
Telecopy:___________________________

 

Vanuatu

 

--------------------------------------------------------------------------------

 

EXHIBIT D

form of

first preferred FLEET mortgage

[OWNER]

and

CALYON NEW YORK BRANCH
as Administrative Agent

For the Lenders

Named Herein

Dated [date]

--------------------------------------------------------------------------------

 

FIRST PREFERRED FLEET MORTGAGE

        This FIRST PREFERRED FLEET MORTGAGE (this "Mortgage") dated as of [date]
is by [OWNER], a _________________________ having its principal offices at [8000
Global Drive, Carlyss, Louisiana 70665] (the "Owner"), in favor of CALYON NEW
YORK BRANCH, having offices at 1301 Avenue of the Americas, New York, New York
10019, as Administrative Agent (as defined in the Credit Agreement referred to
below) and mortgagee (in such capacity, the "Mortgagee") for the benefit of the
Lenders (as defined in the Credit Agreement referred to below).

RECITALS

        A. The Owner is the sole owner of the whole (100%) of the vessels
described on Exhibit A attached hereto and made a part hereof.

        B. Pursuant to the terms of the Amended and Restated Credit Agreement
dated as of August 6, 2004 by and among [Owner] [Global Industries, Ltd., a
Louisiana corporation ("Global")], and Global Offshore Mexico, S. de. R.L. de
C.V., a Mexican sociedad de responsabilidad limitada de capital variable
("Mexican Borrower" and together with Global, collectively, the "Borrowers"),
Calyon New York Branch, in its capacity as Administrative Agent, Wells Fargo
Foothill, Inc., in its capacity as Collateral Monitoring Agent, and the lenders
identified in Exhibit B attached hereto and who hereafter may become a party
thereto ("Lenders") (as the same may be amended or supplemented from time to
time, the "Credit Agreement"), the Lenders have agreed to make available to the
Borrowers a credit facility in the maximum principal amount at any one time
outstanding of One Hundred Million United States Dollars (US$100,000,000) (the
"Credit Facility") in the form of Advances and Letters of Credit (each as
defined in the Credit Agreement). The Credit Facility, and interest, fees and
commissions thereon, are to be paid and repaid, as the case may be, as provided
in the Credit Agreement and the Notes (as defined in the Credit Agreement). The
Credit Facility is evidenced by the Credit Agreement, the Notes and the other
Credit Documents (as defined in the Credit Agreement).

        C. [The Owner has executed a Guaranty of the Borrowers' obligations
under the Credit Facility (the "Guaranty")]. It is required under the terms of
the Credit Agreement that the Owner shall grant and execute this Mortgage as
security for [its] [the Borrowers'] obligations under the Credit Facility.

        D. Therefore, the Owner, in order to secure its obligations under [the
Guaranty and the Borrowers' obligations under] the Credit Agreement and the
Credit Documents, and the performance and observance of and compliance with all
of the covenants, terms and conditions contained in this Mortgage, has duly
authorized the execution and delivery of this Mortgage under and pursuant to the
Maritime Act of Vanuatu [CAP 131], as amended (the "Maritime Act of Vanuatu"),
which is entered into by the Owner in consideration of the Lenders agreeing, at
the request of the [Owner and the] Borrowers, to make the Credit Facility
available to the Borrowers and as a condition thereto and for other good and
valuable consideration provided by the Lenders (the sufficiency of which the
Owner hereby acknowledges).

        NOW, THEREFORE, the Owner and the Mortgagee agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01    In this Mortgage unless the context otherwise requires, the
following expressions shall have the following meanings:

        "Borrowers" has the meaning set forth in the Recitals hereof.

        "Casualty Event" has the meaning set forth in the Credit Agreement.

        "Commitment" has the meaning set forth in the Credit Agreement.

        "Credit Agreement" has the meaning set forth in the Recitals hereof.

        "Credit Documents" has the meaning set forth in the Credit Agreement.

        "Credit Facility" has the meaning set forth in the Recitals hereof.

        "Credit Facility Period" means the period commencing on the Effective
Date and ending on the     date upon which all amounts owing under the Credit
Facility and all other amounts due to the Lenders pursuant to the Credit
Agreement and the other Credit Documents have been repaid in full and the Credit
Agreement has terminated.

        "Effective Date" means the date of this Mortgage.

        "Excepted Liens" has the meaning set forth in Section 6.01(b) hereof.

        ["Guaranty" has the meaning set forth in the Recitals hereof.]

        "Insurance Policies" has the meaning set forth in the Credit Agreement.

        "Lenders" has the meaning set forth in the Recitals hereof.

        "Lien" has the meaning set forth in the Credit Agreement.

        "Loan Party" has the meaning set forth in the Credit Agreement.

        "Maritime Act of Vanuatu" has the meaning set forth in the Credit
Agreement.

        "Material Partial Loss" has the meaning set forth in the Credit
Agreement.

        "Mortgage" has the meaning set forth in the first paragraph hereof.

        "Mortgagee" has the meaning set forth in the first paragraph hereof.

        "Notes" has the meaning set forth in the Credit Agreement.

        "Owner" has the meaning set forth in the first paragraph hereof.

        "Requisition Compensation" means all moneys or other compensation
payable during the Credit Facility Period by reason of requisition for title or
other compulsory acquisition of any Vessel otherwise than by requisition for
hire.

        "Secured Indebtedness" means all obligations and liabilities of the
Owner under the Guaranty and of the Borrowers and the other Loan Parties
(whether for principal, interest, fees, reimbursement obligations, expenses or
any other charges whatsoever), now existing or hereafter incurred under, arising
out of or in connection with, any Credit Document to which it is a party
including, without limitation, in the case of the Owner, [the Guaranty,] the
Credit Agreement and the Notes, and the due performance and compliance by [the
Owner,] the Borrowers, and the other Loan Parties with the terms of each such
Credit Document.

        "Total Loss" has the meaning set forth in the Credit Agreement.

        "United States Dollars" and "US$" means the lawful currency of the
United States of America.

        "Vessels" means the Vessels described on Exhibit A hereto, and includes
any share or interest therein, and each of their engines, generators, drilling
machinery and equipment, masts, winches, anchors, chains, pumps and pumping
equipment, furniture and fittings, boats, tackle, outfit, spare gear, fuel,
consumable or other stores, belongings and appurtenances whether on board or
ashore and whether now owned or hereafter acquired and all additions,
improvements and replacements hereafter made in or to said Vessels or any part
thereof and all of their freight, hires and earnings.

Section 1.02    Except where otherwise expressly provided or unless the context
otherwise requires, words and expressions defined in the Credit Agreement shall
bear the same meanings when used but not otherwise defined in this Mortgage.

Section 1.03    In this Mortgage:

section headings are inserted for convenience only and shall not affect the
construction of this Mortgage and, unless otherwise specified, all references to
Sections are to sections of this Mortgage;

 

unless the context otherwise requires, words denoting the singular number shall
include the plural and vice versa;

 

references to Persons include bodies corporate and unincorporated;

 

references to assets include property, rights and assets of every description;

 

references to any document are to be construed as references to such document as
amended or supplemented from time to time; and

 

references to any enactment include re-enactments, amendments and extensions
thereof.

 

ARTICLE II

THE MORTGAGE

Section 2.01    Granting Clause. In order to secure the payment of the Secured
Indebtedness and to secure the performance and observance of and compliance with
the covenants, terms and conditions contained in this Mortgage and the other
Credit Documents to which it is a party, the Owner has GRANTED, CONVEYED and
MORTGAGED and does by these presents GRANT, CONVEY and MORTGAGE unto the
Mortgagee for the benefit of the Lenders and their respective successors and
assigns, the whole (100%) of each Vessel; TO HAVE AND TO HOLD the same unto the
Mortgagee for the benefit of the Lenders and their respective successors and
assigns forever, upon the terms herein set forth.

Section 2.02    Termination. If (a) the Owner and the Borrowers or their
respective successors and assigns shall pay or cause to be paid to the Mortgagee
and the other Lenders or their respective successors or assigns the Secured
Indebtedness in full as and when the same shall become due and payable in
accordance with the terms of the Credit Agreement, the Notes, the Guaranty, this
Mortgage and the other Credit Documents (other than the reimbursement and
contingent indemnification obligations to the extent no unsatisfied claim with
respect thereto has been asserted); (b) the Owner and the Borrowers or their
respective successors and assigns shall observe and comply with the covenants,
terms and conditions contained in the Credit Agreement, the Notes, the Guaranty,
this Mortgage and the other Credit Documents expressed or implied to be
performed, observed or complied with by or on the part of the Owner, the
Borrowers and their respective successors and assigns, and (c) the Commitments
have been terminated, then these presents and the rights hereunder shall cease,
determine and be void and, in such event, the Mortgagee agrees by accepting this
Mortgage to furnish, execute and record, at the expense of the Owner, all such
documents as the Owner may reasonably require to discharge this Mortgage,
otherwise to be and remain in full force and effect.

Section 2.03    Partial Release; No Waiver. If any Vessel subject to this
Mortgage is sold, transferred, conveyed or otherwise disposed, whether as
permitted by Section 6.03 of the Credit Agreement or otherwise with the consent
of the Lenders, such Vessel shall be released in writing by the Mortgagee from
the lien of this Mortgage upon payment by the Owner to the Mortgagee of such
amount as may be required by Section 6.03 of the Credit Agreement with respect
to sales permitted by Section 6.03 of the Credit Agreement or otherwise as may
be agreed by Mortgagee and the Lenders, and such release shall not affect the
Mortgagee's lien on the remaining Vessels, if any. Notwithstanding anything to
the contrary herein, it is not intended that any provision of this Mortgage
shall waive the preferred status of this Mortgage and that if any provision or
part thereof herein shall be construed as waiving the preferred status of this
Mortgage then such provision shall to such extent be void and of no effect.

Section 2.04    Owner Liable. The Owner shall remain liable to perform all the
obligations assumed by it in relation to each Vessel; and until such time as the
Mortgagee or any Lender shall become the owner thereof following foreclosure,
neither the Mortgagee nor any other Lender shall be under any obligation of any
kind whatsoever in respect thereof or be under any liability whatsoever in event
of any failure by the Owner to perform its obligations in respect thereof.

Section 2.05    Recordation under the Maritime Act of Vanuatu. For the purpose
of this Mortgage and its filing and recordation as required by the Maritime Act
of Vanuatu, (i) the total amount of the Secured Indebtedness is $100,000,000.00
of principal (being the maximum amount that may be outstanding at any one time),
plus interest, expenses and fees thereon plus the performance of mortgage
covenants; (ii) the interest of the Owner (mortgagor) in the Vessels is 100% and
the interest mortgaged to the Mortgagee is 100%; (iii) the respective addresses
of the Owner (mortgagor) and Mortgagee are as set forth on the first page of
this Mortgage; (iv) the Maturity Date is March 9, 2007, and (v) subject to the
partial release provisions in Section 2.03 above, the discharge amount of the
Mortgage is the same as the total amount, and upon receipt thereof, the
Mortgagee shall release the Vessels from the lien of this Mortgage. The
Mortgagee expressly does not waive the preferred status of this Mortgage.

 

ARTICLE III

PAYMENT COVENANTS

Section 3.01    Payment Obligations. The Owner hereby covenants with the
Mortgagee and the other Lenders:

to pay and indemnify the Mortgagee and the other Lenders for all such reasonable
expenses, claims, liabilities, losses, costs, duties, fees, charges, or other
moneys as are stated in this Mortgage to be payable by the Owner to or
recoverable from the Owner by the Mortgagee and the other Lenders (or in respect
of which the Owner agrees in this Mortgage to indemnify the Mortgagee and the
other Lenders) at the times and in the manner specified in this Mortgage;

 

to pay interest on any such reasonable expenses, claims, liabilities, losses,
costs, duties, fees, charges or other moneys referred to in Section 3.01(a) from
the date on which the relevant expense, claim, liability, loss, cost, duty, fee,
charge or other money is paid by the Mortgagee or any other Lender (both before
and after any relevant judgment) at the rates specified in Section 2.06 of the
Credit Agreement; and

 

to pay and perform its obligations which may be or become due or owing to the
Mortgagee or any other Lender, as the case may be, under this Mortgage and the
other Credit Documents to which the Owner is or is to be a party at the times
and in the manner specified herein or therein.

 

ARTICLE IV

PRESERVATION OF SECURITY

Section 4.01    Owner's Covenants Concerning the Security. It is declared and
agreed that:

the security created by this Mortgage shall be held by the Mortgagee as a
continuing security for the payment of the Secured Indebtedness and that the
security so created shall not be satisfied by any intermediate payment or
satisfaction of any part of the Secured Indebtedness;

 

the security so created shall be in addition to and shall not in any way be
prejudiced or affected by any of the other Credit Documents;

 

the Mortgagee shall not have to wait for any Lender to enforce any of the other
Credit Documents, to the extent it may do so pursuant to the terms thereof,
before enforcing the security created by this Mortgage;

 

no failure or delay on the part of the Mortgagee in exercising any right, power
or privilege hereunder and no course of dealing between the Owner and the
Mortgagee or any other Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Mortgagee or
any other Lender would otherwise have. No notice to or demand on the Owner in
any case shall entitle the Owner to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Mortgagee or the Lenders to any other or further action in any circumstances
without notice or demand; and

 

any waiver by the Mortgagee of any terms of this Mortgage or any consent given
by the Mortgagee under this Mortgage shall only be effective if given in writing
and then only for the purpose and upon the terms for which it is given.

Section 4.02    Settlements; No Waiver. Any settlement or discharge under this
Mortgage between the Mortgagee and the Owner shall be conditional upon no
security or payment to the Mortgagee or the Lenders or any of them by the
Borrowers, any Guarantor, or any other Person being avoided or set-aside or
ordered to be refunded or reduced by virtue of any provision or enactment
relating to bankruptcy, insolvency, administration or liquidation for the time
being in force and, if such condition is not satisfied, the Mortgagee shall be
entitled to recover from the Owner on demand the value of such security or the
amount of any such payment as if such settlement or discharge had not occurred.

Section 4.03    Mortgagee's Rights Not Affected. The rights of the Mortgagee
under this Mortgage and the security hereby constituted shall not be affected by
any act, omission, matter or thing which, but for this provision, might operate
to impair, affect or discharge such rights and security, in whole or in part,
including without limitation, and whether or not known to or discoverable by the
Borrowers, any Loan Party, the Mortgagee, any Lender or any other Person:

any waiver granted to or composition with the Borrowers, any Loan Party, or any
other Person; or

 

the taking, variation, compromise, renewal or release of or refusal or neglect
to perfect or enforce any rights, remedies or securities against any of the
Borrowers, any Loan Party, or any other Person; or

 

any legal limitation, disability, incapacity or other circumstances relating to
the Borrowers, any Loan Party, or any other Person; or

 

any amendment or supplement to the Credit Agreement, any of the other Credit
Documents or any other document or security; or

 

the dissolution, liquidation, amalgamation, reconstruction or reorganization of
any of the Borrowers, any Loan Party, or any other Person; or

 

the unenforceability, invalidity or frustration of any obligations of any of the
Borrowers, any Loan Party, or any other Person under the Credit Agreement, any
of the other Credit Documents, or any other document or security.

Section 4.04    Moneys Received by Mortgagee. Until the Secured Indebtedness has
been unconditionally and irrevocably paid in full to the satisfaction of the
Mortgagee and the Commitments have been terminated, any moneys received,
recovered or realized under Article VII relating in whole or in part to the
Secured Indebtedness shall be held in a cash collateral account as security for
the Secured Indebtedness and applied to the Secured Indebtedness in accordance
with Section 7.06 of the Credit Agreement.

 

ARTICLE V

COVENANTS

Section 5.01    Owner's Covenants Concerning the Vessels and Other Matters. The
Owner covenants with the Mortgagee and the other Lenders that throughout the
Credit Facility Period the Owner will:

keep each Vessel documented in its name as a Vanuatu vessel and will not cause
or allow such documentation to be forfeited or imperiled;

 

place, and use due diligence to retain, a properly certified copy of this
Mortgage on board each Vessel with her papers and cause such certified copy of
this Mortgage to be exhibited to any and all Persons (and to any representative
of the Mortgagee on demand) having business with such Vessel which might give
rise to any Lien thereon other than the Lien of this Mortgage, Liens for wages
of the crew (including the master of the Vessel), Liens for general average or
salvage, Liens for wages of stevedores when employed directly by a person listed
in §59(2) of the Maritime Act of Vanuatu, and other maritime Liens incurred in
the ordinary course of business provided such other maritime liens are inferior
to the Liens created by this Mortgage (all such Liens herein collectively called
"Excepted Liens"); and to place and keep prominently displayed in the chart room
and in the master's cabin of each Vessel a framed printed notice in plain type
in English of such size that the paragraph of reading matter shall cover a space
not less than 6 inches wide and 9 inches high reading as follows:

NOTICE OF MORTGAGE

>  a. This Vessel is covered by a First Preferred Fleet Mortgage to Calyon New
>     York Branch, as Administrative Agent and Mortgagee for the benefit of the
>     Lenders referred to in the said Mortgage under authority of the Maritime
>     Act of Vanuatu [CAP 131], as amended. Under the terms of the said Mortgage
>     neither the Owner nor any charterer nor the master of this Vessel nor any
>     other Person has any right, power or authority to create, incur or permit
>     to be imposed upon this Vessel any lien whatsoever other than for crew's
>     wages and salvage and other Excepted Liens (as that term is defined in
>     said Mortgage); and

 

The Owner will, at its sole cost and expense and at no cost to the Mortgagee,
cause this Mortgage to be duly filed with the Office of the Commissioner or
Deputy Commissioner of Maritime Affairs of the Republic of Vanuatu in accordance
with the provisions of the Maritime Act of Vanuatu, and subsequently duly
recorded, and will otherwise comply with and satisfy all the applicable
provisions of the Maritime Act of Vanuatu, as amended, in order to establish,
record and maintain this Mortgage as a first preferred mortgage thereunder upon
each Vessel, and will do all such other acts and execute all such instruments,
deeds, conveyances, mortgages and assurances as the Mortgagee shall reasonably
require in order to subject each Vessel to the lien of this Mortgage as
aforesaid.

 

ARTICLE VI

PROTECTION OF SECURITY

Section 6.01    Mortgagee's Rights. The Mortgagee shall without prejudice to its
other rights and powers under this Mortgage and the other Credit Documents be
entitled (but not bound) at any time and as often as may be reasonably necessary
to take any such action as it may in the reasonable exercise of its discretion
think fit for the purpose of protecting or maintaining the security created by
this Mortgage and the other Credit Documents (including, without limitation,
such action as referred to in Section 6.02) and all reasonable expenses,
liabilities, or losses (including, without limitation, reasonable legal fees) so
incurred by the Mortgagee and the other Lenders in or about the protection or
maintenance of the said security together with interest payable thereon
according to Section 3.01(b) shall be repayable to it by the Owner on demand;
provided that if no Event of Default exists, the Mortgagee shall give the Owner
written notice prior to taking any such action.

Section 6.02    Failure to Insure or Repair. Without prejudice to the generality
of Section 6.01:

if the Owner does not comply in any material respect with any provision of
Article V of this Mortgage and Section 5.02 of the Credit Agreement, the
Mortgagee shall be entitled (but not bound) (i) to effect or to replace and
renew and thereafter to maintain the Insurance Policies in such manner as the
Mortgagee, in its discretion, may think fit and to require that all policies,
contracts and other records relating to the Insurance Policies (including
details of any correspondence concerning outstanding claims) be forthwith
delivered to such brokers as the Mortgagee may nominate, and (ii) to collect,
recover, compromise and give a good discharge for all claims then outstanding or
thereafter arising under the Insurance Policies or any of them and to take over
or institute (if necessary using the name of the Owner) all such proceedings in
connection therewith as is reasonably necessary and to permit the brokers=
through whom the collection or recovery is effected to charge the usual
brokerage therefor, and

 

if the Owner does not comply in any material respect with any provision of
Section 5.13 of the Credit Agreement, the Mortgagee shall be entitled (but not
bound) to arrange for the carrying out of such repairs to and/or surveys of such
Vessel as it deems reasonably expedient or necessary.

 

ARTICLE VII

ENFORCEABILITY AND MORTGAGEE'S POWERS

Section 7.01    Events of Default. During the continuance of any of the Events
of Default specified in the Credit Agreement but without the necessity for any
court order or declaration in any jurisdiction to the effect that an Event of
Default has occurred, the security constituted by this Mortgage shall become
immediately enforceable and the Mortgagee shall be entitled, as and when it may
see fit, to put into force and exercise all or any of the powers possessed by it
as mortgagee of each Vessel or otherwise and in particular:

to exercise all the rights and remedies in foreclosure and otherwise given to
mortgagees by applicable law including the provisions of the Maritime Act of
Vanuatu or any other applicable law including the laws of any other applicable
jurisdiction;

 

to take possession of each Vessel or any of them whether actually or
constructively and/or otherwise to take control of such Vessel wherever located
and cause the Owner or any other Person in possession of such Vessel forthwith
upon demand to surrender the same to the Mortgagee without legal process and
without liability of the Mortgagee for any losses or damages incurred thereby
and without having to render accounts to the Owner in connection therewith;

 

to require that all policies, contracts, certificates of entry and other records
relating to the Insurance Policies (including details of and correspondence
concerning outstanding claims) be forthwith delivered to or to the order of the
Mortgagee;

 

to collect, recover, compromise and give a good discharge for any and all moneys
or claims for moneys then outstanding or thereafter arising under the Insurance
Policies or any Requisition Compensation and to permit any brokers through whom
collection or recovery is effected to charge the usual brokerage therefor;

 

to take over or institute (if necessary using the name of the Owner) all such
proceedings in connection with any Vessel, the Insurance Policies, or any
Requisition Compensation as the Mortgagee thinks reasonably necessary and to
discharge, compound, release or compromise claims against the Owner in respect
of any Vessel which have given or may give rise to any charge or Lien on such
Vessel or which are or may be enforceable by proceedings against such Vessel;

 

following acceleration of the Credit Facility, to sell any Vessel or any share
therein, upon advance notice of ten (10) consecutive days published in any
newspaper authorized to publish legal notices of that kind in the hailing port
and the places of sale of the Vessels and by sending notice of such sale at
least fourteen (14) days prior to the date fixed for such sale to the Owner,
free from any claim of or by the Owner of any nature whatsoever, and with or
(subject to the rights of third parties under applicable law) without the
benefit of any charter party or other contract for her employment, by public
auction or private contract at such place and upon such commercially reasonable
terms (including, without limitation, on terms such that payment of some or all
of the purchase price be deferred) as the Mortgagee in its absolute discretion
may determine with power to postpone any such sale, without being answerable for
any loss occasioned by such sale or resulting from postponement thereof, and/or
itself to purchase such Vessel at any such public auction and to set off the
purchase price against all or any part of the Secured Indebtedness in the manner
specified in Section 9.01 herein; provided, however that in the event any such
Vessel shall be offered for sale by private sale, no newspaper publication of
notice shall be required, nor notice of adjournment of sale;

 

subject to the rights of any charter, to manage, insure, maintain and repair any
Vessel and to charter, employ, sail or lay up any Vessel in such manner, upon
such terms and for such period as the Mortgagee deems reasonably expedient; and
for the purposes aforesaid the Mortgagee shall be entitled to do all acts and
things reasonably incidental or conducive thereto and in particular to enter
into such arrangements respecting such Vessel, and the insurance, management,
maintenance, repair, classification, chartering and employment of such Vessel,
in all respects as if the Mortgagee were the owner of such Vessel and without
being responsible for any loss thereby incurred;

 

to recover from the Owner on demand any liabilities, losses and reasonable
expenses as may be incurred by the Mortgagee in or about the exercise of the
power vested in the Mortgagee under Section 7.01(g);

 

generally and in addition, but not in lieu of any of the above rights, to
recover from the Owner on demand any liabilities, losses and reasonable expenses
incurred by the Mortgagee in or about or incidental to the exercise by it of any
of the powers aforesaid; and

 

generally, take any other action or exercise any other right permitted by
applicable law.

Section 7.02    Sufficiency of Payments Received. The Mortgagee shall not be
obliged to make any enquiry as to the nature or sufficiency of any payment
received by it under this Mortgage or to make any claim, take any action or
enforce any rights and benefits assigned to the Mortgagee by this Mortgage or to
which the Mortgagee may at any time be entitled hereunder.

Section 7.03    Mortgagee, Lenders Not Liable. Neither the Mortgagee, the
Lenders, nor any of their agents, managers, officers, employees, delegates and
advisers shall be liable for any expense, claim, liability, loss, cost, damage
or expense incurred or arising in connection with the exercise or purported
exercise of any rights, powers and discretions under this Mortgage in the
absence of its, his, or her gross negligence or willful misconduct.

Section 7.04    No Mortgagee-in-Possession. To the fullest extent permitted by
law, the Mortgagee shall not by reason of the taking possession of any Vessel be
liable to account as mortgagee-in-possession or for anything except actual
receipts or be liable for any loss upon realization or for any default or
omission for which a mortgagee-in-possession might be liable.

Section 7.05    Purchaser's Rights on Sale. Upon any sale of any Vessel or any
share therein by the Mortgagee, the purchaser shall not be bound to see or
enquire whether the Mortgagee's power of sale has arisen in the manner provided
in this Mortgage and the sale shall be deemed to be within the power of the
Mortgagee and the receipt of the Mortgagee for the purchase money shall
effectively discharge the purchaser who shall not be concerned with the manner
of application of the proceeds of sale or be in any way answerable therefor.

Section 7.06    Divestiture of Owner's Rights. A sale of any Vessel made in
pursuance of this Mortgage, whether under the power of sale hereby granted or
any judicial proceedings, shall operate to divest all right, title and interest
of any nature whatsoever of the Owner therein and thereto, and shall bar the
Owner, its successors and assigns, and all Persons claiming by, through or under
them. No purchaser shall be bound to inquire whether notice has been given or
whether any default has occurred, or as to the propriety of the sale, or as to
application of the proceeds thereof.

 

ARTICLE VIII

APPLICATION OF MONEYS

Section 8.01    Recoveries; Application. All moneys received by the Mortgagee,
including, without limitation:

in respect of sale of any Vessel or any part thereof;

 

in respect of recovery under the Insurance Policies in respect of Casualty
Events, Material Partial Losses and Total Losses not used to repair or replace
the Vessel within the time required by the Credit Agreement,

 

in respect of Requisition Compensation,

> shall be held and applied

> FIRST: to the extent not already paid, to pay or make good all such reasonable
> expenses, liabilities, losses, costs, duties, fees, charges or other moneys
> whatsoever (together with interest payable thereon under Section 3.01(b)) as
> may have been paid or incurred by the Mortgagee in or about or incidental to
> the exercise by the Mortgagee of the powers specified or otherwise referred to
> in Article VI and Section 7.01 (or any of them) arising out of or in
> connection with the Mortgagee=s duties as Mortgagee;
> 
> 
> 
> SECOND: to pay or furnish indemnity in the proper amounts against any
> commitments or encumbrances which, in the reasonable opinion of the Mortgagee,
> have or may have priority over this Mortgage;

> THIRD: except to the extent Owner is entitled to retain such moneys under the
> provisions of the Credit Agreement, to pay the Secured Indebtedness and to
> provide cash collateralization for outstanding Letters of Credit in accordance
> with the terms of the Credit Agreement; and
> 
> 
> 
> FOURTH: the surplus (if any) shall be paid to the Owner or to whomsoever else
> may be entitled thereto.

 

ARTICLE IX

FURTHER ASSURANCES

Section 9.01    Perfection and Preservation of the Collateral. The Owner shall
execute and do all such assurances, acts and things as the Mortgagee may
reasonably require for:

perfecting or protecting the security created (or intended to be created) by
this Mortgage; or

 

preserving or protecting any of the rights of the Mortgagee and the other
Lenders under this Mortgage; or

 

ensuring that the security constituted by this Mortgage and the covenants and
obligations of the Owner under this Mortgage shall inure to the benefit of any
transferee, successor or assignee of the Mortgagee as is referred to in
Section 13.01; or

 

enforcing the security constituted by this Mortgage on or at any time after the
same shall have become enforceable; or

 

the exercise of any power, authority or discretion vested in the Mortgagee under
this Mortgage,

in any such case, forthwith upon demand by the Mortgagee and at the expense of
the Owner.

 

ARTICLE X

POWER OF ATTORNEY

Section 10.01    Owner's Attorney. The Owner, by way of security and in order to
more fully secure the performance of the Owner's obligations under this
Mortgage, hereby irrevocably appoints the Mortgagee as its attorney for the
duration of the Credit Facility Period for the purposes of:

doing in its name all acts and executing, signing and (if required) registering
in its name all documents which the Owner itself could do, execute, sign or
register in relation to any Vessel (including without limitation, transferring
title to such Vessel to a third party), provided, however, that such power shall
not be exercisable by or on behalf of the Mortgagee until this Mortgage shall
have become immediately enforceable pursuant to Section 7.01;

 

executing, signing, perfecting, doing and (if required) registering every such
further assurance document, act, or thing as is referred to in Article IX; and

 

during the continuance of any Event of Default, demanding, collecting,
receiving, compromising, and suing for all freights, hires, earnings, issues,
revenues and income of any Vessel.

Section 10.02    Third Parties. The exercise of such power as is referred to in
Section 10.01(a) by or on behalf of the Mortgagee shall not put any Person
dealing with the Mortgagee upon any enquiry as to whether this Mortgage has
become enforceable nor shall such Person be in any way affected by notice that
this Mortgage has not become enforceable and, in relation to Sections 10.01(a),
10.01(b) and 10.01(c), the exercise by the Mortgagee of such power shall be
conclusive evidence as against third parties of its right to exercise the same.

 

ARTICLE XI

EXPENSES AND INDEMNITIES

Section 11.01    Mortgage Preparation. The Owner agrees to pay all reasonable
out-of-pocket costs and expenses of the Mortgagee in connection with the
negotiation, preparation, execution and delivery of this Mortgage and any
amendment, waiver, release or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of counsel and any valuation
fees) and, after the occurrence and during the continuance of an Event of
Default, each of the Mortgagee and the Lenders in connection with the
enforcement of this Mortgage (including, without limitation, the actual
reasonable fees and disbursements of counsel for the Mortgagee and the Lenders).

Section 11.02    Owner's Indemnity. Without limiting the foregoing Section
11.01, the Owner hereby further indemnifies the Mortgagee, each other Lender,
and their respective officers, directors, employees, representatives and agents
from and holds harmless and agrees to defend each of them against any and all
losses, liabilities, obligations, claims, damages, or reasonable expenses
incurred by any of them, as a result of, or arising out of, or in any way
related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not the Mortgagee is a party thereto) related to the
entering into and/or performance of this Mortgage hereunder or the consummation
of any transactions contemplated hereby, whether initiated by the Owner or any
other Person, including without limitation, the actual reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding or (b) any personal injury to or death of or any
loss or damage to property of any Person or (c) the actual or alleged presence
of Hazardous Materials in the air, surface water, groundwater, surface or
subsurface of any Vessel, facility or location at any time owned or operated by
the Owner or any of its Affiliates, the generation, storage, transportation or
disposal of Hazardous Materials at any Vessel, facility or location at any time
owned or operated by the Owner or any of its Affiliates, the non-compliance of
any Vessel, facility or location at any time owned or operated by the Owner or
any of its Affiliates with federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any such
Vessel, facility or location, or any violation or alleged violation of any
Environmental Laws asserted against the Owner, any of its Affiliates, or any
Vessel, facility or location at any time owned or operated by the Owner or any
of its Affiliates, including, in each case, without limitation, the actual
reasonable fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding. To the
extent that the undertaking to indemnify, pay or hold harmless and defend the
Mortgagee set forth in this Section 11.02 may be unenforceable because it is
violative of any law or public policy, the Owner shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law. Such obligation to
indemnify, hold harmless and defend the Mortgagee and other Persons set out
above shall apply irrespective of the negligence or strict liability of the
Mortgagee or any other indemnified person, unless such loss or injury arises
directly out of the gross negligence or willful misconduct of Mortgagee or such
other indemnified person.

Section 11.03    Payment Currency. If, under any applicable law or regulation,
and whether pursuant to a judgment being made or registered against the Owner or
the liquidation of the Owner or for any other reason, any payment under or in
connection with this Mortgage is made in a currency (the "Payment Currency")
other than the currency in which such payment is due under or in connection with
this Mortgage (the "Contractual Currency"), then to the extent that the amount
of such payment actually received by the Mortgagee, when converted into the
Contractual Currency at the rate of exchange, falls short of the amount due
under or in connection with this Mortgage, the Owner, as a separate and
independent obligation, shall indemnify and hold harmless the Mortgagee against
the amount of such shortfall. For the purposes of this Section 11.03, "rate of
exchange" means the rate at which the Mortgagee is able on the date of such
payment (or, if it is not practicable for the Mortgagee to purchase the
contractual currency with the Payment Currency on the date of such payment, at
the rate of exchange as soon afterwards as is practicable for the Mortgagee to
do so) to purchase the Contractual Currency with the Payment Currency and shall
take into account any premium and other costs of exchange with respect thereto.

Section 11.04    Duties; Taxes. The Owner shall at its own cost, pay promptly
all stamp, documentary and other like duties and taxes to which the Credit
Agreement and the other Credit Documents (or any of them) may be subject or give
rise and shall indemnify the Mortgagee on demand against any and all liabilities
with respect to or resulting from any delay or omission on the part of the Owner
to pay any such duties or taxes.

 

ARTICLE XII

COMMUNICATIONS

Section 12.01    Notices. All notices required to be given to the Mortgagee
shall be made to the following address:

> > Calyon New York Branch
> > 
> > 1301 Avenue of the Americas
> > 
> > New York, New York 10019
> > 
> > Attention: __________________
> > 
> > Telecopier: _________________
> > 
> > Telephone: _________________

All other notices shall be made to the addresses given in 10.02 of the Credit
Agreement.

 

ARTICLE XIII

ASSIGNMENTS

Section 13.01    Assignees. This Mortgage shall be binding upon and shall inure
to the benefit of the Owner, the Mortgagee and the Lenders and their respective
transferees, successors and permitted assigns, and references in this Mortgage
to any of them shall be construed accordingly.

Section 13.02    No Assignment by Owner. Except as permitted by the Credit
Agreement, the Owner may not assign or transfer any of the Vessels or its rights
and/or obligations under this Mortgage.

 

ARTICLE XIV

WAIVER; AMENDMENT

Section 14.01    No Waiver. None of the terms and conditions of this Mortgage
may be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Owner and the Mortgagee (with the consent of either
the Majority Lenders or, to the extent required by Section 9.01 of the Credit
Agreement, all of the Lenders). No amendment to the Credit Agreement or any
other Credit Document which affects the rights and obligations of the Mortgagee
hereunder shall be effective without the consent of the Mortgagee thereto.

 

ARTICLE XV

MISCELLANEOUS

Section 15.01    Governing Law. This Mortgage shall be governed by the laws of
the Republic of Vanuatu having regard always to the provisions of S11 of the
Maritime Act of Vanuatu and, to the extent applicable, by the laws (including
maritime laws) of the United States of America.

Section 15.02    No Invalidity, Etc. If at any time any one or more of the
provisions in this Mortgage is or becomes invalid, illegal or unenforceable in
any respect under any law or regulation, the validity, legality and
enforceability of the remaining provisions of this Mortgage shall not be in any
way affected or impaired thereby.

Section 15.03    Delegation of Powers. The Mortgagee, at any time and from time
to time, may delegate by power of attorney or in any other manner to any Person
or Persons all or any of the powers, authorities and discretions which are for
the time being exercisable by the Mortgagee under this Mortgage in relation to
the Vessels. Any such delegation may be made upon such terms and subject to such
regulations as the Mortgagee may think fit. The Mortgagee shall not be in any
way liable or responsible to the Owner for any loss or damage arising from any
act, default, omission or misconduct on the part of any such delegate (other
than gross negligence or willful misconduct); provided such delegation has been
made in good faith.

Section 15.04    Certificates Conclusive. A certification or determination by
the Mortgagee as to any matter provided in this Mortgage shall, in the absence
of manifest error, be conclusive and binding on the Owner.

Section 15.05    Counterparts. This instrument may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original.

Section 15.06    Mortgagee. For purposes of the Maritime Act of Vanuatu, the
"mortgagee" under this Mortgage is Calyon New York Branch, in its capacity as
Administrative Agent.

 

ARTICLE XVI

JURISDICTION

Section 16.01    New York. Any legal action or proceeding with respect to this
Mortgage may be brought in the courts of the United States or State of New York
sitting in New York and the Owner hereby accepts for itself and its property,
generally and unconditionally, the non-exclusive jurisdiction of such court. The
Owner further irrevocably consents to the service of process out of such court
in any such action or proceeding in the manner provided for in the Credit
Agreement. Nothing herein shall affect the right of the Mortgagee to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Owner in any other jurisdiction.

Section 16.02    Power to Seize Vessel or Take Action. Without prejudice to the
generality of Section 16.01, the Mortgagee shall have the right to arrest and
take action against any Vessel or the Owner at whatever place such Vessel or the
Owner shall be found and for the purpose of any action which the Mortgagee may
bring before the courts of such jurisdiction or other judicial authority and for
the purpose of any action which the Mortgagee may bring against such Vessel, any
writ, notice, judgment or other legal process or documents may (without
prejudice to any other method of service under applicable law) be served upon
the master of such Vessel (or upon anyone acting as the master) and such service
shall be deemed good service on the Owner for all purposes.

[remainder of page intentionally blank]

 

 

        IN WITNESS whereof the Owner has caused this Mortgage to be executed the
day and year first before written.

 

                                                                [OWNER]

                                                                By:
_____________________________________

                                                                Name:
__________________________________

                                                                Title:
___________________________________

 

 

ACKNOWLEDGMENT OF MORTGAGE

STATE OF TEXAS

COUNTY OF HARRIS

        On this ___ day of [date] before me personally appeared ________________
to me known who being by me duly sworn did depose and say that he is the
____________ of [Owner], the limited liability company described in and which
executed the foregoing instrument; and that he signed his name thereto pursuant
to authority granted to him by said company; and that said instrument is the act
and deed of the company.

        And the said ________________ did further produce to me sufficient proof
that he is the ______________ of said company and that he was duly authorized by
the said company to execute the foregoing mortgage, and I the notary hereby
certify that the signature of the said _______________ on the foregoing mortgage
is authentic.

 

                                                               
_______________________________________

                                                                                       
Notary Public

 

 

 

EXHIBIT G

FORM OF PLEDGE AGREEMENT

        This Pledge Agreement dated as of [____________, ____] ("Pledge
Agreement") is between ___________________________, a ____________ corporation
("Pledgor"), and Calyon New York Branch, as administrative agent for the Credit
Parties ("Secured Party").

INTRODUCTION

        A. Global Industries, Ltd., a Louisiana corporation (the "Parent
Borrower"), and Global Offshore Mexico, S. de R.L. de C.V., a Mexican sociedad
de responsabilidad limitada de capital variable (the "Mexican Borrower" and,
together with the Parent Borrower, the "Borrowers"), have entered into an
Amended and Restated Credit Agreement dated as of August 6, 2004 (as amended,
modified, supplemented or restated from time to time, the "Credit Agreement,"
the defined terms of which are used in this Pledge Agreement unless otherwise
defined herein) with the Lenders, the Collateral Monitoring Agent, and
Administrative Agent, providing for the making of Advances by the Lenders and
the Swingline Bank, and the issuance of Letters of Credit by the Issuing Bank.

        B. Any Borrower may from time to time enter into one or more Rate
Hedging Agreements with a Lender or an affiliate of a Lender (any such Lender or
affiliate party to a Rate Hedging Agreement being referred to herein as a "Swap
Counterpart," and together with the Secured Party, the Lenders, the
Administrative Agent, the Issuing Bank, and the Swingline Bank, collectively
referred to herein as the "Credit Parties").

        C. [The Pledgor has guaranteed the Mexican Borrower's obligations and
the Guarantors' obligations owing to the Credit Parties under the Credit
Documents pursuant to the Guaranty dated as of [______________] executed by the
Pledgor in favor of the Secured Party for the ratable benefit of the Credit
Parties (as amended, modified, supplemented, or restated from time to time, the
"Guaranty").]

        D. [The Pledgor has guaranteed the Parent Borrower's obligations, the
Mexican Borrower's obligations, and the other Guarantors' obligations owing to
the Credit Parties under the Credit Documents pursuant to the Guaranty dated as
of [_______________] executed by the Pledgor in favor of the Secured Party for
the ratable benefit of the Credit Parties (as amended, modified, supplemented,
or restated from time to time, the "Guaranty").]

        E. [The Pledgor has guaranteed the Mexican Borrower's obligations owing
to the Credit Parties under the Credit Documents pursuant to the Guaranty dated
as of [___________, 1999] executed by the Pledgor in favor of the Secured Party
for the ratable benefit of the Credit Parties (as amended, modified,
supplemented or restated from time to time, the "Guaranty").]

        F. Under the Credit Agreement, it is a condition to the making of the
Advances and the issuance of the Letters of Credit that the Pledgor shall secure
its obligations under the Credit Documents by entering into this Pledge
Agreement.

        Therefore, the Pledgor hereby agrees with the Secured Party for its
benefit and the benefit of the other Credit Parties as follows:

Section 1.    Definitions. Any terms used in this Pledge Agreement that are
defined in the Uniform Commercial Code as in effect in the State of New York
("UCC") shall have the meaning assigned to those terms by the UCC, unless
otherwise defined in this Pledge Agreement.

Section 2.    Pledge.

        2.01    Grant of Pledge. The Pledgor hereby pledges to the Secured Party
for its benefit and the ratable benefit of the other Credit Parties the Pledged
Collateral, as defined in Section 2.02 below. The pledge made herein shall
secure all of (a) the Obligations of the [[Parent] [Mexican] Borrower]
[Guarantors] now and hereafter existing under the Credit Agreement, the Notes,
the Guaranty, and any other Credit Documents, whether for principal,
Reimbursement Obligations, Rate Hedging Obligations owing to any Swap
Counterpart, interest, fees, expenses, indemnification or otherwise, and (b) all
obligations of the Pledgor now or hereafter existing under [the Guaranty or]
this Agreement (all such obligations being the "Secured Obligations").

 

        2.02    Pledged Collateral. "Pledged Collateral" shall mean all of
Pledgor's right, title, and interest in the following, whether now owned or
hereafter acquired:

the shares of stock listed on the attached Schedule 2.02(a) (the "Initial
Pledged Shares"), the certificates representing the Initial Pledged Shares, and
all dividends, cash, instruments, and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any of the
Initial Pledged Shares;

 

all additional shares of stock and other securities of any issuer of the Initial
Pledged Shares from time to time acquired by the Pledgor in any manner (together
with the "Initial Pledged Shares", the "Pledged Shares"), and the certificates
representing such additional shares or such securities, and all dividends, cash,
instruments and other property from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all of such shares
or such securities;

 

the indebtedness and the instruments evidencing indebtedness (the "Pledged
Debt"), and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Debt;

 

all additional indebtedness from time to time owed to the Pledgor by the obligor
on the Pledged Debt for monies advanced by Pledgor to such obligor and the
instruments evidencing such indebtedness, and all interest, cash, instruments
and other property from time to time received, receivable, or otherwise
distributed in respect of or in exchange for any or all of such indebtedness;

 

all of the general and limited partnership and membership interests listed in
the attached Schedule 2.02(e), the documents and certificates, if any,
representing such partnership or membership interests, all rights, privileges,
authority and powers of the Pledgor as owner or holder of such partnership or
membership interests in such partnerships or limited liability companies, as
applicable, including, but not limited to, all rights, privileges, authority and
powers relating to the economic interests of the Pledgor as owner or holder of
such partnership or membership interests in such partnerships or limited
liability companies, as applicable, including, without limitation, all contract
rights relating thereto, all options and warrants of the Pledgor for the
purchase of any partnership or membership interest in such partnerships or
limited liability companies, as applicable, all of the Pledgor's interest in and
to the profits and losses of such partnerships or limited liability companies
and the Pledgor's right as a partner or member of such partnerships or such
limited liability companies, as applicable, to receive distributions of such
partnerships' or such limited liability companies' assets, upon complete or
partial liquidation or otherwise, all distributions, cash, instruments, and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for the Pledgor's partnership or membership
interest in such partnerships or limited liability companies, and any other
right, title, interest, privilege, authority and power of the Pledgor in or
relating to such partnerships or limited liability companies (all of the
foregoing being referred to collectively as the "Initial Pledged
Partnership/Membership Interests");

 

all additional partnership or membership interests of any issuer of the Initial
Pledged Partnership/Membership Interests from time to time acquired by the
Pledgor in any manner, all options, warrants, distributions, investment
property, cash instruments, and other rights and options from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such interests (together with the "Initial Pledged
Partnership/Membership Interests", the "Pledged Partnership/Membership
Interests");

 

all proceeds from the Pledged Collateral described in paragraphs (a) through (f)
of this Section 2.02; and

 

all accounting records, computer files and programs, files, records, and
documents relating to the foregoing Pledged Collateral (the "Records").

        2.03    Delivery of Pledged Collateral. All certificates or instruments
representing the Pledged Collateral shall be delivered to the Secured Party and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Secured Party. The Secured Party shall
have the right, at any time in its discretion and without notice to the Pledgor,
to transfer to or to register in the name of the Secured Party or any of its
nominees any of the Pledged Collateral, subject to the rights specified in
Section 2.04. In addition, the Secured Party shall have the right at any time to
exchange the certificates or instruments representing the Pledged Collateral for
certificates or instruments of smaller or larger denominations.

        2.04    Rights Retained by Pledgor. Notwithstanding the pledge in
Section 2.01, so long as no Event of Default shall have occurred and be
continuing:

and, if an Event of Default shall have occurred and be continuing, until such
time thereafter as such voting and other consensual rights have been terminated
pursuant to Section 5 hereof, the Pledgor shall be entitled to exercise any
voting and other consensual rights pertaining to the Pledged Shares for any
purpose not inconsistent with the terms of this Pledge Agreement or the Credit
Agreement; provided, however, that the Pledgor shall not exercise or shall
refrain from exercising any such right if such action would or could reasonably
be expected to have a materially adverse effect on the value of the Pledged
Collateral or any part thereof;

 

except as may otherwise be provided in the Credit Agreement, the Pledgor shall
be entitled to receive and retain any and all dividends paid in respect of the
Pledged Shares; provided, however, that any and all (i) dividends paid or
payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
any Pledged Shares, and (ii) dividends and other distributions paid or payable
in cash in respect of any Pledged Shares in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, shall be, and shall be delivered to the Secured
Party to hold as, Pledged Collateral and shall, if received by the Pledgor, be
received in trust for the benefit of the Secured Party and the other Credit
Parties, be segregated from the other property or funds of the Pledgor, and be
delivered to the Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsement or assignment);

 

the Pledgor shall be entitled to receive and retain any and all principal and
interest paid in respect of the Pledged Debt; provided, however, that any and
all principal or interest paid or payable other than in cash in respect of, and
instruments and other property received, receivable, or otherwise distributed in
respect of, or in exchange for, any Pledged Debt shall be delivered to the
Secured Party to hold as Pledged Collateral and shall, if received by the
Pledgor, be received in trust for the benefit of the Secured Party and the
Credit Parties, be segregated from the other property or funds of the Pledgor,
and be delivered to the Secured Party as Pledged Collateral in the same form as
so received (with any necessary indorsement or assignment); and

 

at and after such time as voting and other consensual rights have been
terminated pursuant to Section 5 hereof, the Pledgor shall execute and deliver
(or cause to be executed and delivered) to the Secured Party all proxies and
other instruments as the Secured Party may reasonably request to (i) enable the
Secured Party to exercise the voting and other rights which the Pledgor is
entitled to exercise pursuant to paragraph (a) of this Section 2.04, and (ii) to
receive the dividends or other distributions and proceeds of sale of the Pledged
Shares and payments of principal and interest which the Pledgor is authorized to
receive and retain pursuant to paragraph (b) and (c) of this Section 2.04.

Section 3.    Pledgor's Representations and Warranties. The Pledgor represents
and warrants as follows:

The Pledged Shares and the Pledged Partnership/Membership Interests have been
duly authorized and validly issued and are fully paid and nonassessable.

 

The Pledged Debt has been duly authorized, issued, and delivered, and is the
legal, valid, binding, and enforceable obligation of the obligor thereon and is
not in default.

 

There are no restrictions upon the voting rights associated with, or upon the
transfer of, any of the Pledged Collateral.

 

The Pledgor has the right to vote, pledge, and grant a security interest in or
otherwise transfer the Pledged Collateral to which it has any right, title, and
interest free of any Liens other than Liens permitted by the Credit Agreement.

 

The Pledgor is the legal and beneficial owner of the Pledged Collateral free and
clear of any Lien or option, except for (i) the security interest created by
this Pledge Agreement and (ii) Liens permitted by the Credit Agreement, and the
Pledgor has not sold, granted any option with respect to, assigned, transferred,
or otherwise disposed of any interest in or to the Pledged Collateral.

 

The pledge of the Pledged Collateral does not violate (i) the articles, bylaws,
operating agreements, or partnership agreement, as applicable, of the issuers of
the Pledged Collateral, or any indenture, mortgage, bank loan, or credit
agreement to which the Pledgor is a party or by which any of its respective
properties or assets may be bound, or (ii) any restriction on such transfer or
encumbrance of such Pledged Collateral.

 

No consent of any other Person and no authorization, approval, or other action
by, and no notice to or filing with, any Governmental Authority or regulatory
body, that has not occurred, is required either (i) for the pledge by the
Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or for the
execution, delivery, or performance of this Pledge Agreement by the Pledgor
(except to the extent that financing statements may be required under the UCC to
be filed in order to maintain a perfected security interest in the Pledged
Collateral) or (ii) for the exercise by the Secured Party of the voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Pledge Agreement (except as may be required
in connection with such disposition by laws affecting the offering and sale of
securities generally).

 

The Pledged Shares constitute ____ percent of the issued and outstanding shares
of capital stock of the respective issuers thereof indicated on the attached
Schedule 2.02(a).

 

The Pledged Debt is not directly or indirectly secured by any Lien, does not
evidence any lease, is not chattel paper, consists solely of advances of money
made by the Pledgor to the obligor thereon and proceeds of Pledged Debt and is
not evidenced by any instrument unless such instrument has been delivered to the
Secured Party.

 

Upon delivery of each of the certificates or instruments, if any, representing
the Pledged Collateral, the pledge of the Pledged Collateral pursuant to this
Pledge Agreement will create a valid and perfected first priority security
interest in the Pledged Collateral securing the payment and performance of the
Secured Obligations.

 

Upon the filing of financing statements with the _________________, the security
interests granted to the Secured Parties hereunder will constitute valid
first-priority perfected security interests in all Pledged Collateral with
respect to which a security interest can be perfected by the filing of a
financing statement, subject only to Liens permitted by the Credit Agreement.

 

The chief place of business and chief executive office of the Pledgor and the
office where the Pledgor keeps the Records are located at the address set forth
opposite the Pledgor's name on the signature pages hereof.

Section 4.    Pledgor's Covenants.

        4.01    Further Assurances. The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary and that the Secured Party may reasonably request in
writing, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.

        4.02    Pledged Collateral Adjustments. If, during the term of this
Pledge Agreement, (a) any stock dividend, reclassification, readjustment, or
other change is declared or made in the capital structure of any of the issuers
of the Pledged Shares or the Pledged Partnership/Membership Interests, or any
option included with the Pledged Collateral is exercised, or both, or (b) any
subscription warrants or any other rights or options shall be issued in
connection with the Pledged Collateral, then all new, substituted, and
additional partnership interests, membership interests, certificates, shares,
warrants, rights, options or other securities, issued by reason of any of the
foregoing, shall be immediately delivered to and held by the Secured Party and
shall constitute Pledged Collateral hereunder.

        4.03    Transfer, Other Liens, and Additional Shares. The Pledgor agrees
that it will not (a) sell, assign, or otherwise dispose of, or grant any option
with respect to, any of the Pledged Collateral or (b) create or permit to exist
any Lien upon or with respect to any of the Pledged Collateral, except for the
security interest under this Pledge Agreement and Permitted Prior Liens. The
Pledgor agrees that it will (a) cause each issuer of the Pledged Collateral not
to issue any capital stock, partnership or membership interests or other equity
securities in addition to or in substitution for the Pledged Collateral issued
by such issuer, except to the Pledgor, and (b) pledge to the Secured Party in
accordance with this Pledge Agreement, immediately upon its acquisition
(directly or indirectly) thereof, any additional shares of capital stock or
other equity securities of an issuer of the Pledged Shares.

        4.04    Intercompany Debt. The Pledgor agrees that the Pledged Debt
shall not be directly or indirectly secured by any Lien (except for Permitted
Prior Liens), shall not evidence any lease, shall not be chattel paper, shall
consist solely of advances of money made by the Pledgor to the obligor thereon
and the proceeds of Pledged Debt.

Section 5.    Remedies upon Default. If any Event of Default shall have occurred
and be continuing:

        5.01    UCC Remedies. To the extent permitted by law, the Secured Party
may exercise in respect of the Pledged Collateral, in addition to other rights
and remedies provided for in this Pledge Agreement or otherwise available to it,
all the rights and remedies of a secured party under the UCC (whether or not the
UCC applies to the affected Pledged Collateral).

        5.02    Dividends and Other Rights.

All rights of the Pledgor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 2.04(a) may
be exercised by the Secured Party if the Secured Party so elects and gives
notice of such election to the Pledgor and all rights of the Pledgor to receive
the dividends and other distributions on or in respect of the Pledged Shares and
the proceeds of sale of the Pledged Shares and interest and principal payments
paid in respect of the Pledged Debt which it would otherwise be authorized to
receive and retain pursuant to Section 2.04(c) shall cease.

 

All dividends and other distributions on or in respect of the Pledged Shares and
the proceeds of sale of the Pledged Shares and interest and principal payments
paid in respect of the Pledged Debt which are received by the Pledgor shall be
received in trust for the benefit of the Secured Party, shall be segregated from
other funds of the Pledgor, and shall be promptly paid over to the Secured Party
as Pledged Collateral in the same form as so received (with any necessary
indorsement); provided, however, that if such Event of Default is cured, any
such dividend or distribution paid to the Secured Party prior to that cure
shall, upon request of the Pledgor, be returned by the Secured Party to the
Pledgor.

        5.03    Sale of Pledged Collateral. The Secured Party may upon ten days
prior written notice to the Pledgor sell all or part of the Pledged Collateral
at public or private sale, at any of the Secured Party's offices or elsewhere,
for cash, on credit, or for future delivery, and upon such other terms as are
commercially reasonable. The Secured Party shall not be obligated to make any
sale of the Pledged Collateral regardless of notice of sale having been given.
The Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

        5.04    Exempt Sale. If, in the opinion of the Secured Party, there is
any question that a public or semi-public sale or distribution of any Pledged
Collateral will violate any state or federal securities law, Secured Party in
its discretion (a) may offer and sell securities privately to purchasers who
will agree to take them for investment purposes only and not with a view to
distribution and who will agree to the imposition of restrictive legends on the
certificates representing the security, or (b) may sell such securities in an
intrastate offering under Section 3(a)(11) of the Securities Act of 1933, as
amended, and no sale so made in good faith by Secured Party shall be deemed to
be not "commercially reasonable" solely because so made. Pledgor shall cooperate
fully with Secured Party in all respects in selling or realizing upon all or any
part of the Pledged Collateral.

        5.05    Application of Collateral. Any cash held by the Secured Party as
Pledged Collateral and all cash proceeds received by the Secured Party from the
sale of, collection of, or other realization of any part of the Pledged
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as Pledged Collateral or applied by the Secured Party against part of the
Secured Obligations in the order set forth in section 7.06 of the Credit
Agreement:

Section 6.    Secured Party as Agent for Pledgor.

        6.01    Secured Party Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Secured Party the Pledgor's attorney-in-fact, with full
authority, after the occurrence and during the continuation of an Event of
Default, to act for the Pledgor and in the name of the Pledgor, and, in the
Secured Party's discretion, subject to the Pledgor's revocable rights specified
in Section 2.04, to take any action and to execute any instrument which the
Secured Party may deem reasonably necessary or advisable to accomplish the
purposes of this Pledge Agreement, including, without limitation, to receive,
indorse, and collect all instruments made payable to the Pledgor representing
any dividend, or the proceeds of the sale of the Pledged Shares, or other
distribution in respect of the Pledged Shares and to give full discharge for the
same.

        6.02    Secured Party May Perform. If the Pledgor fails to perform any
covenant contained herein, the Secured Party may itself perform, or cause
performance of, such covenant. Pledgor shall pay for the reasonable expenses of
the Secured Party incurred in connection therewith in accordance with Section
7.04.

        6.03    Secured Party's Duties. Except for the safe custody of any
Pledged Collateral in its possession and the accounting for monies actually
received by it hereunder, the Secured Party shall have no duty as to any Pledged
Collateral, as to ascertaining or taking action with respect to calls,
conversion, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Secured Party or any other Credit Party
has or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Pledged Collateral. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Secured Party accords its own property.
The Secured Party shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Credit Parties and such instructions shall be binding upon the holders of
all Secured Obligations; provided, however, that the Secured Party shall not be
required to take any action which exposes the Secured Party to personal
liability or which is contrary to any Credit Document or applicable law.

Section 7.    Miscellaneous.

        7.01    Amendments, Etc. No amendment or waiver of any provision of this
Pledge Agreement nor consent to any departure by the Pledgor herefrom shall be
effective unless made in writing and signed by the Secured Party, the Pledgor,
and either, as required by the Credit Agreement, the Majority Lenders or all the
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

        7.02    Addresses for Notices. All notices and other communications
provided for hereunder shall be in the manner and to the addresses set forth in
the Credit Agreement.

        7.03    Continuing Security Interest; Transfer of Interest. This Pledge
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the indefeasible payment in
full and termination of the Secured Obligations, (b) be binding upon the
Pledgor, its successors, and assigns, and (c) inure, together with the rights
and remedies of the Secured Party hereunder, to the benefit of and be binding
upon, the Secured Party and the other Credit Parties and their respective
successors, transferees, and assigns. Without limiting the generality of the
foregoing clause, when the Secured Party or such other Credit Party assigns or
otherwise transfers any interest held by it under the Credit Agreement or other
Credit Document to any other Person pursuant to the terms of the Credit
Agreement or other Credit Document, that other Person shall thereupon become
vested with all the benefits held by the Secured Party or such Credit Party
under this Pledge Agreement. Upon the payment in full and termination of the
Secured Obligations, the security interest granted hereby shall terminate and
all rights to the Pledged Collateral shall revert to the Pledgor to the extent
such Pledged Collateral shall not have been sold or otherwise applied pursuant
to the terms hereof. Upon any such termination, the Secured Party will, at the
Pledgor's expense, deliver all Pledged Collateral to the Pledgor, execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request
and take any other actions reasonably requested to evidence or effect such
termination.

        7.04    Expenses. The Pledgor will upon demand pay to the Secured Party
for its benefit and the benefit of the other Credit Parties the amount of any
and all expenses, including the reasonable legal fees and expenses, which the
Secured Party and the other Credit Parties may incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody or preservation of, or
the sale of, collection from or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Secured Party or the Lenders hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.

        7.05    No Waiver; Remedies. To the fullest extent permitted under
applicable law, no failure on the part of the Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided under
any other Credit Document or by applicable law.

        7.06    Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from the Pledgor hereunder in the
currency expressed to be payable herein (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Secured Party could purchase the
specified currency with such other currency at the Secured Party's main New York
office on the Business Day preceding that on which final, non-appealable
judgment is given. The obligations of the Pledgor in respect of any sum due to
the Secured Party hereunder shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the
Business Day following receipt by the Secured Party of any sum adjudged to be so
due in such other currency the Secured Party may in accordance with normal,
reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due to the Secured Party in the specified currency, the Pledgor
agrees, to the fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify the Secured Party
against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to the Secured Party in the specified
currency and (b) any amounts shared with other Lenders as a result of
allocations of such excess as a disproportionate payment to such Lender under
Section 2.12 of the Credit Agreement, the Secured Party agrees to remit such
excess to the Pledgor.

        7.07    Choice of Law; Submission to Jurisdiction.

This Pledge Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interests hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York.

 

Notwithstanding anything in Section 7.07(a) hereof to the contrary, nothing in
this Pledge Agreement shall be deemed to constitute a waiver of any rights which
the Secured Party, the Administrative Agent, the Issuing Bank, any of the
Lenders or any of the other Credit Parties may have under the National Bank Act
or other federal law, including without limitation the right to charge interest
at the rate permitted by the laws of the state where the Secured Party, the
Administrative Agent, the Issuing Bank, the applicable Lender or any other
applicable Credit Party is located.

 

THE PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENTS AND
THE PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.

 

THE PLEDGOR HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK
10019, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTIES SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING BY CERTIFIED
MAIL A COPY OF SUCH PROCESS TO THE PLEDGOR IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, WITH A COPY TO THE PLEDGOR AT ITS ADDRESS
SPECIFIED ON THE SIGNATURE PAGES HERETO, AND THE PLEDGOR HEREBY IRREVOCABLY
AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, THE PLEDGOR ALSO IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING BY CERTIFIED MAIL OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS
SPECIFIED HEREIN. THE PLEDGOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

THE PLEDGOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
RESPECT OF ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY, (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. ANY
JUDICIAL PROCEEDING BY THE PLEDGOR INVOLVING, DIRECTLY OR INDIRECTLY, THIS
PLEDGE AGREEMENT, OR ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY OTHER CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW
YORK.

[The rest of this page has been left blank intentionally.]

 

 

 

        The parties hereto have caused this Pledge Agreement to be duly executed
as of the date first above written.

                                            [PLEDGOR]

                                                                By:
______________________________________

                                                                Name:
___________________________________

                                                                Title:
____________________________________

                   

                                                                CALYON NEW YORK
BRANCH,

                                                                as agent for the
ratable benefit of the Credit Parties

                                                                By:
______________________________________

                                                                Name:
___________________________________

                                                                Title:
____________________________________

 

 

EXHIBIT K

MORTGAGE, ASSIGNMENT OF LEASES, AND SECURITY AGREEMENT
SECURING FUTURE ADVANCES

BY

CREDIT LYONNAIS NEW YORK BRANCH

        BE IT KNOWN

, that on this 9th day of March, 2004, before me, the undersigned Notary Public
duly commissioned and qualified, personally came and appeared:

Global Industries, Ltd., a Louisiana corporation, appearing herein through its
undersigned officer duly authorized hereunto, pursuant to resolutions of its
Board of Directors, a certified copy of which is annexed hereto, which has a
mailing address of 8000 Global Drive, Carlyss, Louisiana, 70665, and a Federal
Tax Identification No. of 72-1212563 ("Mortgagor"),

which said Mortgagor did acknowledge and declare for the benefit of CREDIT
LYONNAIS NEW YORK BRANCH, whose federal tax identification number is
____________________, with a mailing address of 1301 Avenue of the Americas, New
York, New York 10019, individually (in such capacity, "CLNY") and as
administrative agent (in such capacity, "Administrative Agent") for the Credit
Parties (as hereinafter defined), with the Administrative Agent acting hereunder
on behalf of the Credit Parties being referred to as "Mortgagee", as follows:

Recitals

        A. Mortgagor and Global Offshore Mexico, S. de R.L. de C.V., a Mexican
sociedad de responsabilidad limitada de capital variable (the "Mexican Borrower"
and, together with the Mortgagor, the "Borrowers"), have entered into a Credit
Agreement dated as of March 9, 2004 (as amended, modified, supplemented or
restated from time to time, the "Credit Agreement") together with the lenders
party thereto (the "Lenders"), and the Administrative Agent, providing for the
making of Advances by the Lenders and the Swingline Bank, and the issuance of
Letters of Credit by the Issuing Bank. (All capitalized terms not otherwise
defined in this Mortgage shall have the meaning assigned to such terms in the
Credit Agreement).

        B. Mortgagor desires to execute this Mortgage in order to secure the
full and punctual payment and performance of the Indebtedness (as hereinafter
defined).

        C. The making of the loans by the Credit Parties to the Borrowers has
been and will in the future be of substantial benefit to the Mortgagor and,
consequently, the Mortgagor has agreed to execute and deliver this Mortgage and
to grant the mortgage liens and security interests provided for herein.

        NOW, THEREFORE

, the Mortgagor hereby agrees with the Mortgagee, for its benefit and the
benefit of the Credit Parties, as follows:

 

ARTICLE 1
Definitions

       

Section 1.1    Terms Defined Above. As used in this Mortgage, the terms "CLNY,"
"Administrative Agent," "Mortgagee," "Mortgagor," "Mexican Borrower,"
"Borrowers," and "Credit Agreement" shall have the meanings indicated above.

        Section 1.2    Certain Definitions. As used in this Mortgage, the
following terms shall have the meanings indicated, unless the context otherwise
requires:

        "Collateral" shall have the meaning set forth in Section 2.3 ("Security
Interests") of this Mortgage.

        "Credit Parties" shall mean the Lenders, the Administrative Agent, the
Issuing Bank, and the Swingline Bank, and their respective successors and
assigns.

        "Default" shall mean the occurrence of any of the events specified (or
incorporated by reference to the Credit Agreement) in Section 5.1 ("Events of
Default") hereof, whether or not any requirement for notice or lapse of time or
other condition precedent has been satisfied.

        "Default Rate" shall mean the rate of interest then payable under the
Credit Agreement for a past-due Base Rate Advance.

        "Event of Default" shall have the meaning set forth in Section 5.1
("Events of Default") of this Mortgage.

        "Indebtedness" shall mean the Secured Obligations and all of the
following:

(a) the payment of all other amounts with interest thereon becoming due and
payable under the terms of the Credit Documents, or any instrument securing or
executed in connection with the Notes, including (but not limited to) any monies
advanced by the Administrative Agent, the Issuing Bank, the Swingline Bank, or
any of the Lenders on behalf of any Borrower;

(b) any extension, modification, renewal or reamortization of the Secured
Obligations, and any increase or addition thereto; and

(c) the payment of all other indebtedness and obligations, of whatever kind or
character, now owing or which may hereafter become owing by Mortgagor, any
Borrower, or any guarantor of the Secured Obligations to the Credit Parties,
pursuant to the terms and conditions of the Credit Documents, whether such
indebtedness is direct or indirect, primary or secondary, fixed or contingent,
or arises out of or is evidenced by a note, deed of trust, open account,
overdraft, endorsement, surety agreement, guaranty or otherwise, it being
contemplated that Mortgagor and the Borrowers may hereafter become indebted to
the Credit Parties for further sum or sums.

        "Leases" shall have the meaning set forth in Section 2.2 ("Assignment of
Leases and Rentals") of this Mortgage.

        "Lenders" shall mean the lenders (including CLNY) which are parties to
the Credit Agreement and their respective successors and assigns.

        "Lien" shall mean 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 jurisprudence, statute, or contract, 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
reservations, exceptions, encroachments, easements, servitudes, usufructs,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting property. For the purposes of this
Mortgage, the Mortgagor shall be deemed to be the owner of any property which it
has accrued or holds subject to a conditional sale agreement, financing lease or
other arrangement pursuant to which title to the property has been retained by
or vested in some other Person for security purposes.

        "Mortgage" shall mean this Mortgage, Assignment of Leases and Security
Agreement Securing Future Advances, as amended or supplemented from time to
time.

        "Mortgaged Property" shall have the meaning set forth in Section 2.1
("Hypothecation") of this Mortgage.

        "Note" and "Notes" shall have the meanings set forth in the Credit
Agreementand shall include all extensions, renewals, modifications, increases
and rearrangements of same.

        "Permitted Prior Liens" shall have the meaning set forth in the Credit
Agreement.

        "Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other form of entity.

        "Premises" shall have the meaning set forth in Section 2.1
("Hypothecation") of this Mortgage.

        "Proceeds" shall mean all cash and non-cash proceeds of, and all other
profits, rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or
realization upon, Collateral, including without limitation all claims of the
Mortgagor against third parties for loss of, damage to or destruction of, or for
proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral, and including proceeds of all such
proceeds, in each case whether now existing or hereafter arising.

        "Rentals" shall have the meaning set forth in Section 2.2 ("Assignment
of Leases and Rentals") of this Mortgage.

        "Secured Obligations" shall mean the Obligations (as such term is
defined in the Credit Agreement), including but not limited to:

(a) the obligations of the Borrowers under the Notes (which in the aggregate
have a stated principal amount of up to $150,000,000), with interest at the rate
stipulated therein and providing for final maturity on or before March 9, 2007;

(b) the obligations of the Guarantors under the Guaranties; and

(c) any other obligations of the Borrowers or the Guarantors arising under any
Credit Documents, together with any extensions, modifications, substitutions,
amendments and renewals thereof, the terms of which are incorporated herein by
reference, whether for principal, interest, fees, expenses, indemnification or
otherwise.

        "Security Interests" shall mean the mortgage liens, collateral
assignments, and security interests in the Collateral and Proceeds granted
hereunder securing the Indebtedness.

        "Tenants" shall have the meaning set forth in Section 2.2 ("Assignment
of Leases and Rentals") of this Mortgage.

        "UCC" shall mean the Uniform Commercial Code, Commercial Laws-Secured
Transactions (Louisiana Revised Statutes 10:9-101 through 9-605) in the State of
Louisiana, as amended from time to time; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interests in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than Louisiana, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of perfection or
non-perfection.

        Section 1.3    Uniform Commercial Code Definitions. As used herein, the
terms "fixtures," "inventory," "goods," "accounts," and "equipment," shall have
the meanings given to those terms under the UCC.

ARTICLE 2
Liens and Security Interest

        Section 2.1    Hypothecation. In order to secure all present and future
Indebtedness, all according to the terms and tenor hereof, Mortgagor does by
these presents specially mortgage, affect and hypothecate in favor of Mortgagee,
for the benefit of the Credit Parties, the following described property, to-wit:

        See Exhibit "A" attached hereto and made a part hereof by reference;

together with all the buildings and improvements situated on the above-described
immovable property and all appurtenances, rights, ways, privileges, servitudes,
prescriptions and advantages thereunto belonging or in anywise appertaining,
including, but without limitation, all component parts of the above-described
immovable property, and all component parts of any building or other
construction located on the above-described immovable property, now or hereafter
a part of or attached to said immovable property or used in connection therewith
(said immovable property, together with said buildings and improvements and
other rights, privileges and interests encumbered or conveyed hereby
collectively referred to as the "Premises") and, further, together with the
right to receive proceeds attributable to the insurance loss of the Premises,
all as provided in Louisiana Revised Statutes 9:5386. (All of the foregoing
immovable and movable property and incorporeal rights covered by and subject to
this Mortgage are herein collectively referred to as the "Mortgaged Property.")

        The Mortgaged Property is to remain so specially mortgaged, affected and
hypothecated unto and in favor of the Mortgagee until the full and final payment
or discharge of the Indebtedness, and the Mortgagor is herein and hereby bound
and obligated not to sell or alienate the Mortgaged Property, except under
circumstances, if any, expressly permitted by the Credit Agreement.

        Section 2.2    Assignment of Leases and Rentals. In accordance with the
provisions of La. R.S. 9:4401, and to further secure the full and punctual
payment and performance of all present and future Indebtedness, the Mortgagor
does hereby assign and pledge unto Mortgagee, for the benefit of the Credit
Parties, and grant a continuing security interest in, all of the Mortgagor's
right, title and interest in and to (i) all leases affecting the Mortgaged
Property or any part thereof, whether now existing or hereafter arising,
together with any and all renewals, extensions or modifications thereof (the
"Leases"), and (ii) all rentals, income, profits, security deposits and other
sums due or becoming due under the Leases (the "Rentals"). The rights assigned
by this Mortgage include, without limitation, all of the Mortgagor's right,
power, privilege and option to modify, amend or terminate the Leases, or waive
or release the performance or satisfaction of any duty or obligation of any
tenant or lessee (each a "Tenant") under the Leases.

        Section 2.3    The Security Interests. In order to secure the full and
punctual payment and performance of all present and future Indebtedness, the
Mortgagor hereby grants to the Mortgagee, for the benefit of the Credit Parties,
a continuing security interest in and to all right, title, and interest of the
Mortgagor in, to, or under the following property, whether now owned or existing
or hereafter acquired or arising:

(a) all of the movable property now or hereafter used in or found on or about
the Premises, now owned or hereafter acquired by Mortgagor, including, but not
limited to, all goods that become fixtures, all heating, lighting,
refrigeration, plumbing, ventilating, laundry, incinerating, water-heating,
cooking, dishwashing, electrical and air conditioning equipment, fixtures and
appurtenances, together with all disposals, dishwashers, machinery, elevators,
pumps, generators, sprinklers, wiring, pipe, doors, motors, compressors,
boilers, condensing units, range hoods, windows, window screens, window shades,
venetian blinds, awnings, drapes, shelving, mantels, cabinets, paneling, rugs
and other floor coverings, and shrubbery, all building materials, inventory,
furniture, appliances, goods, equipment and machinery and all renewals,
replacements and substitutions thereof and additions thereto and Mortgagor's
current and future rights as lessee under leases of any of the foregoing; all
rights, titles and interests of Mortgagor in and to all timber to be cut from
the Premises covered hereby and all minerals in, under and upon, produced or to
be produced from the Premises, and without limitation of the foregoing, any and
all permits, licenses, approvals, rights, rents, revenues, benefits, leases,
concessions, licenses, tenements, hereditaments and appurtenances now or
hereafter owned by Mortgagor and appertaining to, generated from, arising out of
or belonging to the above described properties or any part thereof. Some of the
said items are to become "fixtures" on the Premises;

(b) All judgments, awards of damages, insurance proceeds and settlements
hereafter made resulting from condemnation proceedings or the taking of all or
any part of the Premises under the power of eminent domain, or for any damage
(whether caused by a taking, a casualty or otherwise) to the Premises or any
part thereof, or to any rights appurtenant thereto, including, but not limited
to, any award for change of grade of streets. The Mortgagee is hereby
authorized, but shall not be required, on behalf and in the name of Mortgagor to
execute and deliver valid acquittances for, and to appeal from, any such
judgments or awards. Subject to the terms and conditions of the Credit
Agreement, the Mortgagee may apply all such sums or any part thereof so received
as a payment on the Indebtedness;

(c) all bonuses, rents, royalties and other accounts resulting from the sale of
severed minerals or the like (including oil and gas) accrued or to accrue under
all oil, gas or mineral leases affecting the Premises, now existing or which may
hereafter come into existence. Mortgagor directs payment of the same to the
Mortgagee, for the benefit of the Credit Parties, at the option of the Mortgagee
and upon written demand of the Mortgagee therefor, to be applied to the
Indebtedness until paid, whether due or not, after any Event of Default;

(d) all books and records (including, without limitation, accounting records,
customer lists, credit files, computer programs and data, tapes, disks, punch
cards, data processing software, transaction files, master files, printouts and
other computer materials and records) of the Mortgagor relating to the Premises;
and

(e) all Proceeds and products of all or any of the Collateral described in
clauses (a) through (d) hereof and, to the extent not otherwise included, all
payments under any insurance, indemnity, warranty or guaranty of or for the
foregoing Collateral.

The term "Collateral" means each and all of the items and property described in
clauses (a)-(e) above, together with the Mortgaged Property, the Leases, the
Rentals and the property described in the balance of this Section 2.3 below.

        Without limitation of the foregoing, the "Collateral" shall also include
all right, title, and interest now owned or hereafter acquired by Mortgagor in
and to the following described property and all replacements or substitutions
therefor and all products and proceeds thereof:

(a) all contracts, now or hereafter entered into by and between the Mortgagor
and any contractor or supplier as well as all right, title, and interest of
Mortgagor under any subcontracts, providing for the construction (original,
restorative, or otherwise) of any improvements to or on any of the Premises or
the furnishing of any materials, supplies, equipment, or labor in connection
with any such construction;

(b) all of the plans, specifications, and drawings (including but not limited to
plot plans, foundations plans, floor plans, elevations, framing plans,
cross-sections of walls, mechanical plans, electrical plans and architectural
and engineering plans, and architectural and engineering studies and analyses)
heretofore or hereafter prepared by any architect or engineer, in respect of any
of the Premises;

(c) all agreements now or hereafter entered into with any party in respect to
architectural, engineering, management, or consulting services rendered or to be
rendered in respect of planning, design, inspection, or supervision of the
construction or management of any of the Premises;

(d) any commitment issued by any lender or investor other than the Mortgagee to
finance or invest in any of the Premises; and

(e) any completion or performance bond or labor and material payment bond and
any other bond relating to the Premises or to any contract providing for
construction of improvements to any of the Premises.

        Section 2.4 Maximum Amount.

(a) The maximum amount of the Indebtedness that may be outstanding at any time
and from time to time that this Mortgage secures, including without limitation
as a mortgage and as a collateral assignment, including all principal, interest
and any expenses or Advances incurred by the Credit Parties and all other
amounts included within the Indebtedness, is six hundred million ($600,000,000)
dollars.

(b) The Mortgagor acknowledges that this Mortgage secures all loans and advances
made or incurred by the Credit Parties under or pursuant to this Mortgage and or
otherwise pursuant to the Credit Agreement, whether optional or obligatory by
the Credit Parties. This Mortgage is and shall remain effective, even though the
amount of the Indebtedness may now be zero or may later be reduced to zero,
until all of the amounts, liabilities, and obligations, present and future,
comprising the Indebtedness have been incurred and are extinguished. When no
Indebtedness secured by this Mortgage exists and the Credit Parties are not
bound to permit any Indebtedness to be incurred, this Mortgage may be terminated
by the Mortgagor upon thirty (30) days prior written notice sent by the
Mortgagor to the Mortgagee in accordance with the provisions of this Mortgage.

        Section 2.5   Condemnation. Without limiting the generality of Section
2.3 above, the Mortgagor hereby assigns to the Mortgagee, for the benefit of the
Credit Parties, any and all awards that may be given or made in any proceedings
by any legally constituted authority to condemn or expropriate the Collateral,
or any part thereof, under power of eminent domain, and if there is such a
condemnation or expropriation, the Mortgagee shall have the right to apply the
proceeds thereof toward the payment of the Indebtedness.

        Section 2.6    Subrogation to Existing Liens. It is agreed that the
Liens and security interests hereby created shall take precedence over and be a
prior Lien to any other Lien of any kind or character, including vendor's,
materialman's or mechanic's Liens, hereafter created on the Collateral, and in
the event the proceeds of the Notes are used to acquire or to pay off and
satisfy any indebtedness and Liens heretofore existing on the Collateral, then
the Mortgagee is, and shall be, subrogated to all of the rights, Liens, and
remedies of the holders of the indebtedness and Liens so acquired or paid off,
regardless of whether said indebtedness and Liens are acquired by the Mortgagee
by assignment or are released by the holders thereof upon payment.

        Section 2.7    No Liability. The Security Interests are granted as
security only and shall not subject the Administrative Agent or the Credit
Parties to, or transfer or in any way affect or modify, any obligation or
liability of the Mortgagor with respect to any of the Collateral or any
transaction in connection therewith.

ARTICLE 3
Representations and Warranties

        In order to induce the Mortgagee to enter into this Mortgage, the
Mortgagor represents and warrants to the Mortgagee (which representations and
warranties will survive the extensions of credit under the Credit Documents)
that:

        Section 3.1    Title to Collateral. The Mortgagor has good and
merchantable title to the Collateral, except the portion thereof consisting of
after-acquired property, free of all Liens except Permitted Prior Liens, and the
Mortgagor will have good and merchantable title to such after-acquired
Collateral, free of Liens except Permitted Prior Liens. Furthermore, the
Mortgagor has not heretofore conveyed or agreed to convey or encumber the
Collateral in any way, except with the Permitted Prior Liens.

        Section 3.2    Environmental Matters. All representations and warranties
set forth in the Credit Agreement relating to Environmental Laws, Hazardous
Substances, and related concepts are adopted herein by reference as if
reproduced herein in their entirety, such representations and warranties being
hereby expressly made by Mortgagor to Mortgagee with respect to the Mortgagor
and the Collateral.

        Section 3.3    Legal Requirements. The Collateral is in compliance with
all Legal Requirements affecting such property.

        Section 3.4    Certain Events. That prior to the recordation of this
Mortgage in the appropriate records of the parish in which the Premises or any
part thereof are situated, none of the following have occurred which have not
been completed and paid for in full: (i) construction of any proposed above or
below ground improvements, structures, additions or alterations, (ii) materials
or supplies have been delivered to or labor performed on the Premises, and (iii)
Mortgagor has entered into any contracts or agreements for the construction of
any improvements, structures, additions or alterations, or the delivery of any
materials or supplies or the performance of said labor.

        Section 3.5    Taxpayer Identification Number. The federal taxpayer
identification number of the Mortgagor is as follows: 72-1212563.

        Section 3.6    Chief Executive Office. The chief executive office of the
Mortgagor is located at 8000 Global Drive, Carlyss, Louisiana, 70665.

        Section 3.7    Business Locations. The books and records pertaining to
the Collateral are located at the Premises.

        Section 3.8    Continuing Accuracy. All of the representations and
warranties contained in this Article or elsewhere in this Mortgage shall be true
through and until the date on which this Mortgage is canceled and released by
Mortgagee, and Mortgagor shall promptly notify Mortgagee of any event which
would render any of said representations and warranties untrue or misleading.

ARTICLE 4
Covenants

        The Mortgagor will at all times comply with the covenants contained in
this Article 4, from the date hereof and for so long as any part of the
Indebtedness is outstanding.

        Section 4.1    Credit Agreement. The Mortgagor will timely perform all
of its obligations under the Credit Documents in accordance with their
respective terms and conditions, including without limitation (i) paying all
taxes and assessments levied or assessed against the Collateral as provided
herein and in the Credit Agreement, (ii) maintaining the Collateral as provided
herein and in the Credit Agreement, (iii) complying with all Legal Requirements
as provided herein and in the Credit Agreement, (iv) carrying the insurance
required herein and in the Credit Agreement and (iv) removing all Liens from the
Collateral except those permitted under the Credit Agreement.

        Section 4.2    Taxes and Other Liens. The Mortgagor will pay and
discharge promptly when due all excise, property, sales, use, and other taxes,
assessments and governmental charges or levies imposed the Collateral 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 the Collateral,
except to the extent expressly permitted by the terms of the Credit Agreement.

        Section 4.3    Further Assurances. The Mortgagor will keep the lien of
this Mortgage valid and unimpaired. The Mortgagor will promptly (and in no event
later than 15 days after written notice from the Mortgagee is received) cure any
defects in the creation, execution, and delivery of this Mortgage. The Mortgagor
at its expense will promptly execute and deliver to the Mortgagee upon request
all such other and further documents, agreements and instruments in compliance
with or accomplishment of the covenants and agreements of the Mortgagor in this
Mortgage or to further evidence and more fully describe the Collateral or more
fully state the secured obligations set out herein, or to perfect, protect or
preserve any Liens created pursuant to this Mortgage, 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 Mortgage.

        Section 4.4    Reimbursement of Expenses. The Mortgagor will pay all
reasonable legal fees incurred by the Mortgagee in connection with the
preparation of this Mortgage. The Mortgagor will, upon request, promptly
reimburse the Mortgagee for all amounts expended, advanced or incurred by the
Mortgagee to satisfy any obligation of the Mortgagor under this Mortgage, or to
protect the Collateral or business of the Mortgagor or to collect the
Indebtedness, or to enforce the rights of the Mortgagee under this Mortgage,
which amounts will include all court costs, attorneys' fees, fees of auditors
and accountants, and investigation expenses reasonably incurred by the Mortgagee
in connection with any such matters, together with interest at the Default Rate
on each such amount from the date that the same is expended, advanced or
incurred by the Mortgagee until the date of reimbursement to the Mortgagee. All
such amounts (and interest) shall be treated as Advances as provided hereinbelow
in this Mortgage.

        Section 4.5    Insurance. The Mortgagor will procure and maintain for
the benefit of the Mortgagee (a) original paid-up insurance policies with
amounts, form and substance, companies and expiration dates acceptable to the
Mortgagee and containing a non-contributory standard mortgagee clause or its
equivalent in favor of the Mortgagee and (b) such other insurance as required by
the Credit Agreement. In the event the Mortgagor should, for any reason
whatsoever, fail to keep the Collateral or any part thereof so insured, or to
keep said policies so payable, or fail to deliver to the Mortgagee the original
or certified policies of insurance and the renewals therefor upon demand, then
the Mortgagee, if it so elects, may itself have such insurance effected in such
amounts and with such companies as it may deem proper and may pay the premiums
therefor. The Mortgagor will notify the Mortgagee immediately in writing of any
material fire or other casualty to or accident involving the Collateral, whether
or not such fire, casualty or accident is covered by insurance. The Mortgagor
will promptly further notify Mortgagor's insurance company and submit an
appropriate claim and proof of claim to the insurance company as to any of the
Collateral that is damaged or destroyed by fire or other casualty. If the
Collateral is damaged or destroyed, in whole or in part, by fire or other
casualty, the Mortgagee may, at its election, either apply the net proceeds
thereof toward the payment of the Indebtedness or pay the net proceeds thereof
to the Mortgagor, either wholly or in part, and under such conditions as the
Mortgagee may determine to enable Mortgagor to repair or restore the Collateral.
The Mortgagor will not do or permit anything to be done to the Collateral that
may violate the terms of any insurance covering the Collateral or any part
thereof.

        Section 4.6    Taxation of Mortgage. In the event that any governmental
authority shall impose any taxation of mortgages or the indebtedness they
secure, Mortgagor will pay such governmental taxes, assessments or charges
either to the governmental authority or to Mortgagee, as provided by law.

        Section 4.7    Right of Inspection. The Mortgagor will permit any
officer, employee or agent of the Mortgagee to visit and inspect the Collateral,
examine the books of record and accounts of the Mortgagor, take copies and
extracts therefrom, and discuss the affairs, finances and accounts of the
Mortgagor with the Mortgagor 's officers, accountants and auditors, all at such
reasonable times and on reasonable notice and as often as the Mortgagee may
reasonably desire.

        Section 4.8    Indemnification. The Mortgagor will indemnify the
Mortgagee and the Credit Parties and hold the Mortgagee and the Credit Parties
harmless from any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs and expenses of whatever kind or nature which may
be imposed on, incurred by or asserted at any time against theMortgagee or any
Credit Party in any way relating to, or arising in connection with, the use or
occupancy of the Collateral.

        Section 4.9    Compliance with Laws and Covenants. The Mortgagor will
observe and comply with all Legal Requirements applicable to the Mortgagor or to
the Collateral.

        Section 4.10    Maintenance of the Collateral. The Mortgagor will
maintain, preserve, and keep the Collateral at all times in thorough repair,
good working order and good condition and will, from time to time, make all
necessary repairs, replacements, additions, betterments and improvements so that
the security of this Mortgage and the value, use and operation of the Collateral
shall at no time become impaired.

        Section 4.11    Environmental Indemnity. The Mortgagor will defend,
indemnify and hold Mortgagee, the Credit Parties and their respective directors,
officers, agents and employees harmless from and against all claims, demands,
causes of action, liabilities, losses, costs and expenses (including, without
limitation, costs of suit, reasonable attorneys' fees and fees of expert
witnesses) arising from or in connection with (i) the presence in, on or under
or the removal from the Collateral of any hazardous substances or solid wastes
(as defined elsewhere in this Mortgage), or any releases or discharges of any
hazardous substances or solid wastes on, under or from such property, (ii) any
activity carried on or undertaken on or off the Collateral, whether prior to or
during the term of this Mortgage, and whether by Mortgagor or any predecessor in
title or any officers, employees, agents, contractors or subcontractors of
Mortgagor or any predecessor in title, or any third persons at any time
occupying or present on the Collateral, in connection with the handling, use,
generation, manufacture, treatment, removal, storage, decontamination, clean-up,
transport or disposal of any hazardous substances or solid wastes at any time
located or present on or under the Collateral, or (iii) any breach of any
representation, warranty or covenant under the terms of this Mortgage. The
foregoing indemnity shall further apply to any residual contamination on or
under the Collateral, or affecting any natural resources, and to any
contamination of the Collateral or natural resources arising in connection with
the generation, use, handling, storage, transport or disposal of any such
hazardous substances or solid wastes, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances. Without prejudice to the survival of any
other agreements of the Mortgagor hereunder, the provisions of this Section
shall survive the final payment of all Indebtedness and the termination of this
Mortgage and shall continue thereafter in full force and effect.

        Section 4.12    Filing. The Mortgagor agrees that a carbon,
photographic, facsimile, photostatic or other reproduction of this Mortgage or
of a financing statement is sufficient as a financing statement. The Mortgagor
shall pay all costs of or incidental to the recording or filing of any
financing, amendment, continuation, termination or other statements concerning
the Collateral.

        Section 4.13    Transfer and Other Liens. The Mortgagor will not sell,
lease, transfer, exchange or otherwise dispose of the Collateral or the
Proceeds, or any part thereof, without the prior written consent of the
Mortgagee and will not permit any Lien to attach to the Collateral or the
Proceeds, or any part thereof, other than Permitted Prior Liens.

 

ARTICLE 5
Default

        Section 5.1    Events of Default. Any of the following events shall be
considered an "Event of Default" as that term is used herein:

(a) the occurrence of an "Event of Default" as defined in the Credit Agreement;
or

(b) the violation or breach of any term or provision of this Mortgage.

        Section 5.2    Remedies.

(a) Upon the happening of any Event of Default, the Mortgagee may, by written
notice to the Mortgagor, declare the entire principal amount of all Indebtedness
then outstanding including interest accrued thereon to be immediately due and
payable without presentment, demand, protest, notice of protest or dishonor or
other notice of default of any kind, all of which are hereby expressly waived by
the Mortgagor.

(b) Upon the occurrence of any Event of Default, the Mortgagee may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against the Mortgagor, in and to the Collateral, including, but not
limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as the Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of the Mortgagee: (i) institute proceedings for the foreclosure of this
Mortgage in which case the Collateral may be sold for cash or upon credit in one
or more parcels or portions under executory or ordinary process, at the
Mortgagee's sole option, without appraisement, appraisement being expressly
waived; or (ii) to the extent permitted and pursuant to the procedures provided
by applicable law, institute proceedings for the partial foreclosure of this
Mortgage for the portion of the Indebtedness then due and payable, subject to
the continuing lien of this Mortgage for the balance of the Indebtedness not
then due; or (iii) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained in this
Mortgage; (iv) recover judgment on the Notes either before, during or after any
proceedings for the enforcement of this Mortgage; or (v) apply for the
appointment of a trustee, receiver, liquidator or conservator of the Collateral,
without regard for the adequacy of the security for the Indebtedness and without
regard for the solvency of the Mortgagor or of any person, firm or other entity
liable for the payment of the Indebtedness; or (vi) pursue such other remedies
as the Mortgagee may have under applicable law.

(c) The proceeds or avails of any sale made under or by virtue of this Article
5, together with any other sums which then may be held by the Mortgagee under
this Mortgage, whether under the provisions of this Article 5 or otherwise,
shall be applied in accordance with Section 7.06 of the Credit Agreement..

(d) Upon any sale made under or by virtue of this Article 5, the Mortgagee may
bid for and acquire the Collateral or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Indebtedness the net sales price after deducting therefrom the expenses of the
sale and the costs of the action and any other sums which the Mortgagee is
authorized to deduct under this Mortgage.

(e) The Mortgagee may proceed under this Mortgage solely as to the immovable
property interests, or solely as to the movable property interests, or as to
both the immovable and movable property interests in accordance with its rights
and remedies in respect of the immovable property interests.

        Section 5.3    Leases and Rentals. Upon the occurrence of any Event of
Default, the Mortgagee may additionally take any one or more of the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such order as the Mortgagee may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of the
Mortgagee:

(a) The Mortgagee may notify any and all Tenants to pay all Rentals due
thereafter directly to the Mortgagee at the address set forth in the Mortgagee's
notice to such Tenants. The Mortgagor irrevocably agrees that all such Tenants
shall be authorized to pay the Rentals directly to the Mortgagee without
liability of such Tenants for the determination of the actual existence of any
default by the Mortgagor claimed by the Mortgagee. Tenants shall be expressly
relieved of any and all duty, liability and obligation to the Mortgagor in
connection with any and all Rentals so paid.

(b) The Mortgagee may enter upon and take possession of the Mortgaged Property,
to manage and operate the Mortgaged Property and the Mortgagor's business on the
Mortgaged Property, and take possession of and use all books of account and
financial records of the Mortgagor and its property managers or representatives,
if any, relating to the Mortgaged Property.

(c) The Mortgagee may alter, modify, amend, terminate or permit the surrender of
any or all Leases, and the Mortgagee may execute new Leases of any part of the
Mortgaged Property, including Leases that extend beyond the maturity date of the
Notes.

The enforcement of any and all such rights available to the Mortgagee hereunder
shall continue for so long as the Mortgagee shall elect, notwithstanding that
the collection and application of the Rentals may have cured the original
default. Following the exercise of any of the foregoing rights, the Mortgagee
may, at its sole option, through written notice to the Mortgagor, permit the
Mortgagor to re-enter and take possession of the Mortgaged Property or any part
thereof and to perform all acts necessary for the operation and maintenance of
the Mortgaged Property, including the right to collect the Rentals, but the
Mortgagee shall nevertheless have the right, effective upon written notice, to
demand, sue for possession of and collect the Rentals under the Leases and
otherwise exercise its rights under this Mortgage again.

        Section 5.4    Sale. Upon the occurrence of an Event of Default, the
Mortgagee may exercise all rights of a secured party under the UCC and other
applicable law (including the Uniform Commercial Code as in effect in another
applicable jurisdiction) and, in addition, the Mortgagee may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, sell the Collateral and the Proceeds or any part
thereof at public or private sale, for cash, upon credit or for future delivery,
and at such price or prices as the Mortgagee may deem satisfactory. The
Mortgagee may be the purchaser of any or all of the Collateral and Proceeds so
sold at any public sale (or, if the Collateral and Proceeds is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). The
Mortgagor will execute and deliver such documents and take such other action as
the Mortgagee deems necessary or advisable in order that any such sale may be
made in compliance with law. Upon any such sale the Mortgagee shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral
and Proceeds so sold. Each purchaser at any such sale shall hold the Collateral
and Proceeds so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Mortgagor
which may be waived, and the Mortgagor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay of appraisal which it has or
may have under any law now existing or hereafter adopted. The Mortgagor agrees
that ten (10) days' prior written notice of the time and place of any sale or
other intended disposition of any of the Collateral and Proceeds constitutes "
reasonable notification" within the meaning of Section 9-504(3) of the UCC,
except that shorter or no notice shall be reasonable as to any Collateral and
Proceeds which is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market. The notice (if any) of such sale
shall (a) in case of a public sale, state the time and place fixed for such
sale, and (b) in the case of a private sale, state the day after which such sale
may be consummated. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Mortgagee may
fix in the notice of such sale. At any such sale the Collateral and Proceeds may
be sold in one lot as an entirety or in separate parcels or portions, as the
Mortgagee may determine. The Mortgagee shall not be obligated to make any such
sale pursuant to any such notice. The Mortgagee may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral and Proceeds
on credit or for future delivery, the Collateral or Proceeds so sold may be
retained by the Mortgagee until the selling price is paid by the purchaser
thereof, but the Mortgagee shall not incur any liability in case of the failure
of such purchaser to take up and pay for the Collateral and Proceeds so sold
and, in case of any such failure, such Collateral and Proceeds may again be sold
upon like notice.

        Section 5.5    Assemble Collateral. For the purpose of enforcing any and
all rights and remedies under this Agreement the Mortgagee may (a) require the
Mortgagor to, and the Mortgagor agrees that it will, at its expense and upon the
request of the Mortgagee, forthwith assemble all or any part of the Collateral
and Proceeds as directed by the Mortgagee and make it available at a place
designated by the Mortgagee which is, in its opinion, reasonably convenient to
the Mortgagee and the Mortgagor, whether at the Premises of the Mortgagor or
otherwise, and Mortgagee shall be entitled to specific performance of this
obligation, (b) to the extent permitted by applicable law of this or any other
state, enter, with or without process of law and without breach of the peace,
any premise where any of the Collateral or Proceeds is or may be located, and
without charge or liability to it seize and remove such Collateral or Proceeds
from such premises, (c) have access to and use the Mortgagor's books and records
relating to the Collateral and Proceeds and (d) prior to the disposition of the
Collateral and Proceeds, store or transfer it without charge in or by means of
any storage or transportation facility owned or leased by the Mortgagor,
process, repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent the Mortgagee deems appropriate and, in connection with
such preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by the Mortgagor.

        Section 5.6    Limitation on Duty of Mortgagee. Beyond the exercise of
reasonable care in the custody thereof, the Mortgagee shall have no duty as to
any Collateral or Proceeds in its possession or control or in the possession or
control of any agent or bailee or any income thereon. The Mortgagee shall be
deemed to have exercised reasonable care in the custody of the Collateral and
Proceeds in its possession if the Collateral and Proceeds is accorded treatment
substantially equal to that which it accords its own property, and shall not be
liable or responsible for any loss or damage to any of the Collateral or
Proceeds, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Mortgagee in good faith. The Mortgagor agrees
that the Mortgagee shall not be obligated to preserve rights against prior
parties obligated on any instruments.

        Section 5.7    Appointment of Agent. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Mortgagee may appoint
a bank or trust company or one or more other Persons with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment.

        Section 5.8    Confession of Judgment. For purposes of foreclosure under
Louisiana executory process procedures, Mortgagor hereby acknowledges the
Indebtedness and confesses judgment in favor of Mortgagee for the full amount of
the Indebtedness.

        Section 5.9    Attorney Fees and Expenses. In case the Notes are placed
in the hands of an attorney at law for the filing of foreclosure proceedings, to
protect the rights of Mortgagee or to enforce any of the agreements contained in
this Mortgage, Mortgagor will pay all costs of collection, including but not
limited to reasonable attorneys' fees, incurred in connection with the
protection of or realization of collateral or in connection with any of
Mortgagee's collection efforts, whether or not suit on the Notes or any
foreclosure proceedings is filed. All insurance expenses and all expenses of
protecting, storing, warehousing, appraising, preparing for sale, handling,
maintaining and shipping the Collateral, all expenses in respect of periodic
appraisals and inspections of the Collateral to the extent the same may be
requested from time to time, and all expenses in respect of the sale or other
disposition thereof shall be borne and paid by the Mortgagor; and if the
Mortgagor fails to promptly pay any portion thereof when due, the Mortgagee may,
at its option, but shall not be required to, pay the same and charge the
Mortgagor's account therefor, and the Mortgagor agrees to reimburse the
Mortgagee therefor on demand. The Mortgagor further agrees that the Indebtedness
shall be increased by the amount of said costs and fees.

        Section 5.10    Renewal and Extension. The Mortgagee, without notice,
may release any part of the Collateral, or any person liable on the
Indebtedness, without in any way affecting the Lien hereof upon any portion of
the Collateral not expressly released, and may agree with any party obligated on
the Indebtedness, or having any interest in the Collateral, to renew and extend
the time or manner of payment of all or any part of the Indebtedness. Such
agreement shall not in any way release or impair the Lien hereof, but shall
renew and extend the Lien hereof against the Collateral without altering or
affecting the priority of the Lien created by this Mortgage in favor of any
junior encumbrance mortgagee, or purchaser, or any person acquiring an interest
in the Collateral, and this Mortgage shall remain first and superior to any
Liens that may be placed thereon, or that may be fixed, given or imposed by law
thereon after the execution of this instrument notwithstanding any such
extension of the time of payment, or the release of a portion of said property
from this Lien.

        Section 5.11    Advances by Mortgagee. The Mortgagor authorizes the
Mortgagee in the Mortgagee's discretion to advance any sums necessary for the
purpose of paying (a) insurance premiums, (b) any and all excise, property,
sales, use and other taxes, forced contributions, service charges, local
assessments and governmental charges on any of the Collateral, (c) any Liens
affecting the Collateral (whether superior or subordinate to the lien of this
Mortgage) not permitted by this Mortgage, (d) necessary repairs and maintenance
expenses, or (e) any other amounts which the Mortgagee deems necessary and
appropriate to preserve the validity and ranking of this Mortgage, to cure any
Defaults or to prevent the occurrence of any Default (collectively, the
"Advances") of whatever kind; provided, however, that nothing herein contained
shall be construed as making such Advances obligatory upon Mortgagee, or as
making Mortgagee liable for any loss, damage, or injury resulting from the
nonpayment thereof. The Mortgagor covenants and agrees that within five (5) days
after demand therefor by the Mortgagee, the Mortgagor will repay the Advances to
Mortgagee, together with interest thereon at the Default Rate, and in addition
will repay any other reasonable costs, attorneys' fees and expenses, charges and
expenses of any and every kind for the full protection and preservation of the
Collateral or this Mortgage, including payments required in respect to any Lien
affecting the Collateral, together with interest thereon at the Default Rate.
All such Advances and amounts (including interest) shall be included in the
Indebtedness secured hereby (subject to the maximum amount of the Indebtedness
set forth above in this Mortgage).

        Section 5.12    Keeper. In the event the Collateral, or any part
thereof, is seized as an incident to an action for the recognition or
enforcement of this Mortgage by executory process, ordinary process,
sequestration, writ of fieri facias or otherwise, the Mortgagor and the
Mortgagee agree that the court issuing any such order shall, if petitioned for
by Mortgagee, direct the applicable sheriff to appoint as a keeper of the
Collateral, the Mortgagee or any agent designated by Mortgagee or any person
named by Mortgagee at the time such seizure is effected. This designation is
pursuant to Louisiana Revised Statutes 9:5136 through 5140.2, inclusive, as the
same may be amended, and the Mortgagee shall be entitled to all the rights and
benefits afforded thereunder. It is hereby agreed that the keeper shall be
entitled to receive as compensation, in excess of its reasonable costs and
expenses incurred in the administration or preservation of the Collateral, an
amount equal to $250.00 per day, which shall be included as Indebtedness secured
by this Mortgage. The designation of keeper made herein shall not be deemed to
require the Mortgagee to provoke the appointment of such a keeper.

        Section 5.13    Waivers. The Mortgagor waives in favor of the Mortgagee
any and all homestead exemptions and other exemptions of seizure or otherwise to
which Mortgagor is or may be entitled under the constitution and statutes of the
State of Louisiana insofar as the Collateral is concerned. Mortgagor further
waives: (a) the benefit of appraisement as provided in Louisiana Code of Civil
Procedure Articles 2332, 2336, 2723 and 2724, and all other laws conferring the
same; (b) the demand and three days' delay accorded by Louisiana Code of Civil
Procedure Articles 2639 and 2721; (c) the notice of seizure required by
Louisiana Code of Civil Procedure Articles 2293 and 2721; (d) the three days'
delay provided by Louisiana Code of Civil Procedure Articles 2331 and 2722; and
(e) the benefit of the other provisions of Louisiana Code of Civil Procedure
Articles 2331, 2722 and 2723, not specifically mentioned above.

        Section 5.14    Authentic Evidence. Any and all declarations of facts
made by authentic act before a notary public in the presence of two witnesses by
a person declaring that such facts lie within his knowledge, shall constitute
authentic evidence of such facts for the purpose of executory process. The
Mortgagor specifically agrees that such an affidavit by a representative of the
Mortgagee as to the existence, amount, terms and maturity of the Indebtedness
and of a default thereunder shall constitute authentic evidence of such facts
for the purpose of executory process.

 

ARTICLE 6
Miscellaneous

        Section 6.1    Notices. Any notice or demand which, by provision of this
Mortgage, is required or permitted to be given or served by one party to or on
the other shall be delivered or made in accordance with the provisions of the
Credit Agreement.

        Section 6.2    Amendment. Neither this Mortgage nor any provisions
hereof may be changed, waived, discharged or terminated orally or in any manner
other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.

        Section 6.3    Invalidity. In the event that any one or more of the
provisions contained in this Mortgage shall, for any reason, be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Mortgage.

        Section 6.4    Survival of Agreements. All representations and
warranties of the Mortgagor herein, and all covenants and agreements herein not
fully performed before the effective date of this Mortgage, shall survive such
date.

        Section 6.5    Waivers. No course of dealing on the part of the
Mortgagee, its officers, employees, consultants or agents, nor any failure or
delay by the Mortgagee with respect to exercising any of its rights, powers or
privileges under this Mortgage shall operate as a waiver thereof.

        Section 6.6    Cumulative Rights. The rights and remedies of the
Mortgagee under this Mortgage and the other Credit Documents shall be
cumulative, and the exercise or partial exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.

        Section 6.7    Time of the Essence. Time shall be deemed of the essence
with respect to the performance of all of the terms, provisions and conditions
on the part of the Mortgagor and the Mortgagee to be performed hereunder.

        Section 6.8    Successors and Assigns; Participants.

(a) All covenants and agreements contained by or on behalf of the Mortgagor in
this Mortgage shall bind its successors and assigns and shall inure to the
benefit of the Mortgagee and its successors and assigns.

(b) This Mortgage is for the benefit of the Mortgagee, the Credit Parties and
such other Person or Persons as may from time to time become or be the holders
of any of the Indebtedness, and this Mortgage shall be transferable and
negotiable, with the same force and effect and to the same extent as the
Indebtedness may be transferrable, it being understood that, upon the transfer
or assignment by the Credit Parties of any of the Indebtedness, the legal holder
of such Indebtedness shall have all of the rights granted to the Mortgagee, for
the benefit of the Credit Parties, under this Mortgage. The Mortgagor
specifically agrees that upon any transfer of all or any portion of the
Indebtedness, this Mortgage shall secure with retroactive rank the existing
Indebtedness of the Mortgagor to the transferee and any and all Indebtedness to
such transferee thereafter arising.

(c) Mortgagor hereby recognizes and agrees that the Mortgagee and the Credit
Parties may, from time to time, one or more times, transfer all or any portion
of the Indebtedness to one or more third parties. Such transfers may include,
but are not limited to, sales of participation interests in such Indebtedness in
favor of one or more third party lenders. Mortgagor specifically (i) consents to
all such transfers and assignments, waives any subsequent notice of and right to
consent to any such transfers and assignments as may be provided under
applicable law; (ii) agrees that the purchaser of a participation interest in
the Indebtedness will be considered as the absolute owner of a percentage
interest of such Indebtedness and that such a purchaser will have all of the
rights granted to the purchaser under any participation agreement governing the
sale of such a participation interest; (iii) agrees that any purchaser of a
participation interest in the Indebtedness may exercise any and all rights of
counter-claim, set-off, banker's lien and other liens with respect to any and
all monies owing to the Mortgagor; and (iv) agrees that, upon any transfer of
all or any portion of the Indebtedness, the Mortgagee and/or the subject Credit
Party may transfer and deliver any and all collateral securing repayment of that
Indebtedness to the transferee of such Indebtedness and such collateral shall
secure any and all of the Indebtedness in favor of such a transferee, and after
any such transfer has taken place, the Mortgagee and/or subject Credit Party
shall be fully discharged from any and all future liability and responsibility
to Mortgagor with respect to such collateral, and the transferee thereafter
shall be vested with all the powers, rights and duties with respect to such
collateral.

        Section 6.9    Reinstatement. In the event the Mortgagee shall elect to
invoke any of the rights or remedies provided for herein, but shall thereafter
determine to withdraw or discontinue same for any reason, it shall have the
unqualified right to do so, whereupon all parties shall be automatically
restored and returned to their respective positions regarding the Indebtedness
and this document as shall have existed prior to the invocation of the
Mortgagee's rights hereunder and the rights, powers and remedies of the
Mortgagee hereunder shall be and remain in full force and effect.

        Section 6.10    Further Documents. Mortgagor agrees that it shall
execute and deliver such other and further documents and do and perform such
other acts as may be reasonably necessary and proper to carry out the intention
of the parties as herein expressed and to effect the purposes of this document
and the loan transaction referred to herein. Without limitation of the
foregoing, Mortgagor agrees to execute and deliver such documents as may be
necessary to cause the Liens and security interests granted hereby to cover and
apply to any property placed in, on or about the Premises in addition to, or
replacement or substitution of, any of the Collateral.

        Section 6.11    Titles of Articles, Sections, and Subsections. All
titles or headings to articles, sections, subsections or other divisions of this
Mortgage or the exhibits hereto are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect to the other
content of such articles, sections, subsections or other divisions, such other
content being controlling as to the agreement between the parties hereto.

        Section 6.12    Singular and Plural. Words used herein in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular herein shall apply to such words
when used in the plural where the context so permits and vice versa.

        Section 6.13    Governing Law. This Mortgage is a contract made under
and shall be construed in accordance with and governed by the laws of the United
States of America and the State of Louisiana.

        Section 6.14    WAIVER OF JURY TRIAL. THE MORTGAGOR HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH
THE MORTGAGOR AND THE MORTGAGEE MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY
PERTAINING TO, WHETHER DIRECTLY OR INDIRECTLY (AND WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE), THIS MORTGAGE, THE COLLATERAL AND ANY OTHER CREDIT
DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THE
RELATIONSHIP ESTABLISHED HEREUNDER. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS MORTGAGE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE
MORTGAGOR, AND THE MORTGAGOR HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE MORTGAGOR FURTHER
REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

        Section 6.15    Certificates. The production of mortgage, conveyance,
tax research or other certificates is waived by consent, and the Mortgagor and
the Mortgagee agree to hold me, Notary, harmless for failure to procure and
attach same.

        Section 6.16    Credit Agreement. To the extent the specific terms and
provisions of this Mortgage expressly conflict with the specific terms and
provisions of the Credit Agreement, the specific terms and provisions of the
Credit Agreement shall control. In the event that any provision in this Mortgage
provides for action or the exercise of discretion by the Mortgagee, the terms of
the Credit Agreement shall control for purposes of determining any consent or
approval required from any of the Credit Parties prior to Mortgagee's action or
exercise of discretion.

        THUS DONE AND PASSED

on the day and in the month and year hereinabove first written, in the presence
of the undersigned witnesses who hereunto sign their names with the Mortgagor,
and me, Notary, after due reading of the whole.

WITNESSES:

 

MORTGAGOR:

   

GLOBAL INDUSTRIES, LTD., a Louisiana Corporation

 

By:

   

Name:

   

Title:

 

     

NOTARY PUBLIC

Printed Name: _________________________

My Commission Expires: _________________