Exhibit 10.5

 

EXECUTION VERSION

 

 

 

$200,000,000

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

GENERAL MARITIME SUBSIDIARY CORPORATION and
GENERAL MARITIME SUBSIDIARY II CORPORATION,
each as Borrower,

 

GENERAL MARITIME CORPORATION,

 

and

 

ARLINGTON TANKERS LTD.,

 

as Guarantors

 

OCM Marine Investments CTB, Ltd.,
as initial Lender

 

and

 

OCM Administrative Agent, LLC
as Administrative Agent

and Collateral Agent

 

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Dated as of May 6, 2011

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

Section 1 - Amount and Terms of Credit Facility

1

1.01

The Loans

1

1.02

Intentionally Omitted

1

1.03

Notice of Borrowing

2

1.04

Disbursement of Funds

2

1.05

Notes

2

1.06

Joint and Several

3

1.07

Interest

3

1.08

Intentionally omitted

5

1.09

Increased Costs, Illegality, etc.

5

1.10

Compensation

6

1.11

Intentionally Omitted

7

 

 

 

Section 2 - Intentionally omitted

7

 

 

 

Section 3 - Fees

7

 

 

 

Section 4 - Prepayments; Payments; Taxes

7

4.01

Voluntary Prepayments

7

4.02

Mandatory Prepayments

8

4.03

Method and Place of Payment

9

4.04

Net Payments; Taxes

9

 

 

 

Section 5 - Conditions Precedent to the Closing Date

11

5.01

Closing Date; Notes

11

5.02

Fees, etc.

11

5.03

Opinions of Counsel

11

5.04

Corporate Documents; Proceedings; etc.

12

5.05

Management Agreements; Debt Agreements; Employment Agreements Agreements

13

5.06

Guaranty

13

5.07

Pledge and Security Agreement

13

5.08

Solvency Certificate

14

5.09

Financial Statements

14

5.10

Material Adverse Change; Approvals

14

5.11

Litigation

14

5.12

Appraisals

15

5.13

Refinancing

15

5.14

Assignments of Earnings and Insurances

15

5.15

Mortgages; Certificates of Ownership; Searches; Class Certificates; Appraisal
Report; Insurance

16

5.16

Environmental Laws

16

5.17

No Default; Representations and Warranties

17

 

i

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5.18

Notice of Borrowing

17

5.19

Performance of Covenants

17

5.20

Delivery of Warrants

17

5.21

Registration Rights Agreement

17

5.22

Officer’s Certificate

17

5.23

2008 Credit Agreement and 2010 Credit Agreement Secured Party Consent

17

5.24

Intentionally Omitted

17

5.25

Intentionally Omitted

18

5.26

Lien Searches

18

5.27

Margin Regulations

18

5.28

No Conflicts

18

5.29

Collateral and Guaranty Requirements; Intercreditor Agreements

18

 

 

 

Section 6 - Intentionally omitted

19

 

 

 

Section 7 - Representations, Warranties and Agreements

19

7.01

Corporate/Limited Liability Company/Limited Partnership Status

19

7.02

Corporate Power and Authority

19

7.03

No Violation

19

7.04

Governmental Approvals

20

7.05

Financial Statements; Financial Condition; Undisclosed Liabilities

20

7.06

Litigation

21

7.07

True and Complete Disclosure

21

7.08

Use of Proceeds; Margin Regulations

22

7.09

Tax Returns and Payments

22

7.10

Compliance with ERISA

23

7.11

The Security Documents

24

7.12

Capitalization

24

7.13

Subsidiaries

25

7.14

Compliance with Statutes, etc.

25

7.15

Investment Company Act

25

7.16

Solvency

25

7.17

Pollution and Other Regulations

25

7.18

Labor Relations

26

7.19

Patents, Licenses, Franchises and Formulas

26

7.20

Indebtedness

26

7.21

Insurance

27

7.22

Concerning the Vessels

27

7.23

Citizenship

27

7.24

Mortgaged Vessel Classification

27

7.25

No Immunity

27

7.26

Fees and Enforcement

27

7.27

Form of Documentation

28

7.28

PATRIOT Act

28

7.29

Certain Business Practices

28

7.30

Brokers and Other Advisors

28

 

ii

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7.31

Money Laundering

29

 

 

 

Section 8 - Affirmative Covenants

29

8.01

Information Covenants

29

8.02

Books, Records and Inspections

33

8.03

Maintenance of Property; Insurance

33

8.04

Corporate Franchises

33

8.05

Compliance with Statutes, etc.

33

8.06

Compliance with Environmental Laws

34

8.07

ERISA

34

8.08

End of Fiscal Years; Fiscal Quarters

36

8.09

Performance of Obligations

36

8.10

Payment of Taxes

36

8.11

Intentionally Omitted

36

8.12

Further Assurances

36

8.13

Deposit of Earnings

37

8.14

Ownership of Subsidiaries

37

8.15

Flag of Mortgaged Vessels; Citizenship; Mortgaged Vessel Classifications

38

8.16

Guarantees; Additional Collateral

38

8.17

Lenders Meetings

38

8.18

Consent of the Bermuda Monetary Authority

38

 

 

 

Section 9 - Negative Covenants

38

9.01

Liens

38

9.02

Consolidation, Merger, Sale of Assets, etc.

40

9.03

Shareholder Payments

42

9.04

Indebtedness

43

9.05

Advances, Investments and Loans

44

9.06

Transactions with Affiliates

46

9.07

Minimum Cash Balance

46

9.08

Total Leverage Ratio

47

9.09

Collateral Maintenance

47

9.10

Interest Expense Coverage Ratio

48

9.11

Capital Expenditures

48

9.12

Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc.

48

9.13

Limitation on Certain Restrictions on Subsidiaries

48

9.14

Limitation on Issuance of Equity Interests

49

9.15

Business

49

9.16

Anti-Layering

49

9.17

Restrictions on Modifications to Senior Credit Facilities

50

9.18

Limitations on Voluntary Payments, Etc. of Senior Unsecured Notes; Modifications
of Senior Unsecured Documents

50

9.19

Bank Accounts

50

 

 

 

Section 10 - Events of Default

50

10.01

Payments

50

 

iii

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10.02

Representations, etc.

50

10.03

Covenants

50

10.04

Default Under Other Agreements

50

10.05

Bankruptcy, etc.

51

10.06

ERISA

51

10.07

Security Documents

52

10.08

Guaranties

52

10.09

Judgments

52

10.10

Change of Control

52

 

 

 

Section 11 - Definitions and Accounting Terms

53

11.01

Defined Terms

53

 

 

 

Section 12 - Agency and Security Trustee Provisions

80

12.01

Appointment

80

12.02

Nature of Duties

81

12.03

Lack of Reliance on the Agents

81

12.04

Certain Rights of the Agents

82

12.05

Reliance

82

12.06

Indemnification

82

12.07

The Administrative Agent in its Individual Capacity

83

12.08

Holders

83

12.09

Resignation by the Administrative Agent

83

12.10

Exculpation

84

 

 

 

Section 13 - Miscellaneous

86

13.01

Payment of Expenses, etc.

86

13.02

Right of Setoff

87

13.03

Notices

88

13.04

Benefit of Agreement

88

13.05

No Waiver; Remedies Cumulative

89

13.06

Payments Pro Rata

89

13.07

Calculations; Computations

90

13.08

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial

90

13.09

Counterparts

91

13.10

Intentionally Omitted

91

13.11

Headings Descriptive

92

13.12

Amendment or Waiver; etc.

92

13.13

Survival

92

13.14

Domicile of Loans

93

13.15

Intentionally Omitted

93

13.16

Confidentiality

93

13.17

Register

94

13.18

Judgment Currency

94

13.19

Language

95

13.20

Waiver of Immunity

95

13.21

PATRIOT Act

95

 

iv

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13.22

Release of Subsidiary Guarantors

95

 

 

 

Section 14 - Holdings Guaranty

95

14.01

Guaranty

95

14.02

Bankruptcy

96

14.03

Nature of Liability

96

14.04

Independent Obligation

96

14.05

Authorization

97

14.06

Reliance

98

14.07

Subordination

98

14.08

Waiver

98

14.09

Judgment Shortfall

99

 

v

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SCHEDULE I

 

-

 

Commitments

SCHEDULE II

 

-

 

Lender Addresses

SCHEDULE III

 

-

 

Mortgaged Vessels

SCHEDULE IV

 

-

 

Existing Liens

SCHEDULE V

 

-

 

Indebtedness

SCHEDULE VI

 

-

 

Required Insurance

SCHEDULE VII

 

-

 

ERISA

SCHEDULE VIII

 

-

 

Subsidiaries

SCHEDULE IX

 

-

 

Capitalization

SCHEDULE X

 

-

 

Approved Classification Societies

SCHEDULE XI

 

-

 

Existing Investments

SCHEDULE XII

 

-

 

Affiliate Transactions

 

vi

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EXHIBIT A

 

-

 

[RESERVED]

EXHIBIT B

 

-

 

[RESERVED]

EXHIBIT C-1

 

-

 

Form of Opinion of Kramer Levin Naftalis & Frankel LLP, New York counsel to the
Credit Parties

EXHIBIT C-2

 

-

 

Form of Opinion of Constantine P. Georgiopoulos, New York maritime counsel to
the Credit Parties

EXHIBIT C-3

 

-

 

Form of Opinion of George E. Henries, Esq., Liberian counsel to the Credit
Parties

EXHIBIT C-4

 

-

 

Form of Opinion of Dennis J. Reeder, Esq., Marshall Islands counsel to the
Credit Parties

EXHIBIT C-5

 

 

 

Form of Opinion of Golsblat BLP, Russian counsel to the Credit Parties

EXHIBIT C-6

 

 

 

Form of Opinion of Albuquerque & Associates, Portuguese counsel to the Credit
Parties

EXHIBIT C-7

 

 

 

Form of Opinion of Allen & Gledhill LLP, Singapore counsel to the Credit Parties

EXHIBIT C-8

 

-

 

Form of Opinion of Conyers, Dill & Pearman, Bermuda counsel to the Credit
Parties

EXHIBIT D

 

-

 

Form of Officer’s Certificate

EXHIBIT E

 

-

 

Form of Subsidiaries Guaranty

EXHIBIT F

 

-

 

Form of Pledge Agreement

EXHIBIT G

 

-

 

Form of Assignment of Earnings

EXHIBIT H

 

-

 

Form of Assignment of Insurances

EXHIBIT I-1

 

-

 

Form of Marshall Islands Vessel Mortgage

EXHIBIT I-2

 

-

 

Form of Liberian Vessel Mortgage

EXHIBIT I-3

 

-

 

Form of Bermuda Vessel Mortgage (Deed of Covenants)

EXHIBIT K

 

-

 

Form of Solvency Certificate

EXHIBIT L

 

-

 

Form of Assignment and Assumption Agreement

EXHIBIT M

 

-

 

Form of Compliance Certificate

EXHIBIT N

 

-

 

Subordination Provisions

EXHIBIT O

 

-

 

Form of Parent Officer’s Certificate

EXHIBIT P-1

 

-

 

Form of Intercreditor Agreement

EXHIBIT P-2

 

-

 

Form of Secondary Intercreditor Agreement

EXHIBIT Q

 

-

 

Form of Joinder Agreement

EXHIBIT R

 

-

 

Form of Secured Party Consent

 

vii

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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 6, 2011, among
GENERAL MARITIME SUBSIDIARY CORPORATION, a Marshall Islands corporation and
GENERAL MARITIME SUBSIDIARY II CORPORATION, a Marshall Islands corporation,
(individually or collectively, as the context may require, referred to as
“Borrower”), GENERAL MARITIME CORPORATION, a Marshall Islands corporation
(“Parent”), and ARLINGTON TANKERS LTD., a Bermuda corporation (“Arlington”) the
Lenders party hereto from time to time, and OCM ADMINISTRATIVE AGENT, LLC, as
Administrative Agent (in such capacity, together with its successors and
assigns, the “Administrative Agent”) and as Collateral Agent under the Security
Documents (in such capacity, together with its successors and assigns, the
“Collateral Agent”).  All capitalized terms used herein and defined in Section
11 are used herein as therein defined.

 

W I T N E S S E T H:

 

WHEREAS, in order to effectuate, among other things, an amendment and
restatement of the 2008 Credit Agreement and to effectuate certain amendments to
the 2010 Credit Agreement, Borrower will require $200,000,000 to make certain
payments to lenders under the 2008 Credit Agreement and 2010 Credit Agreement
and pay fees incurred in connection with the amendment of the 2010 Credit
Agreement, and, in order to effectuate such repayments, Borrower has requested
that the Lenders extend credit to Borrower pursuant to, and in accordance with
this Agreement;

 

WHEREAS, the Borrowers, the Parent, the Agent and the Original Lender (as
defined herein) are party to a Credit Agreement dated as of March 29, 2011 (the
“Original Credit Agreement”);

 

WHEREAS, the Borrowers, Arlington, the Lenders, the Parent and the Agent wish to
amend and restate the Original Credit Agreement in its entirety to provide
certain amendments hereto to satisfy certain conditions contained in the
Original Credit Agreement and this Credit Agreement;

 

WHEREAS, in consideration of the foregoing, inter alia, Parent and its
Subsidiaries shall provide Lenders and Collateral Agent with Liens on collateral
securing the obligations hereunder on a third lien basis to the existing
collateral securing the 2008 Credit Agreement and 2010 Credit Agreement;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

SECTION 1 - AMOUNT AND TERMS OF CREDIT FACILITY.

 

1.01         The Loans.  Subject to and upon the terms and conditions set forth
herein, each Lender severally agrees to make on the Closing Date a term loan (a
“Loan” and, collectively, the “Loans”) to Borrower, which Loans (i) shall bear
interest in accordance with Section 1.07, (ii) shall be denominated in Dollars,
and (iii) may be repaid in accordance with the provisions hereof.

 

1.02         Intentionally Omitted.

 

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1.03         Notice of Borrowing. (a) With respect to the Borrowing hereunder,
Borrower shall give the Administrative Agent at its Notice Office by 11:00 a.m.
(New York time) at least three Business Days’ prior to the Closing Date (or such
lesser time period as reasonably agreed by the Administrative Agent).  Such
written notice (a “Notice of Borrowing”), except as otherwise expressly provided
in Section 1.09, shall be irrevocable and shall be given by Borrower in a form
reasonably satisfactory to the Administrative Agent, appropriately completed to
specify (i) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
and (iii) to which account the proceeds of such Loans are to be deposited.  The
Administrative Agent shall promptly give each Lender which is required to make
Loans, notice of such proposed Borrowing, of such Lender’s proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.

 

(b)           Without in any way limiting the obligation of Borrower to deliver
a written Notice of Borrowing in accordance with Section 1.03(a), the
Administrative Agent may act without liability upon the basis of telephonic
notice of such Borrowing, believed by the Administrative Agent in good faith to
be from the Chairman of the Board, Chief Administrative Officer, President,
Chief Financial Officer or the Treasurer of Borrower (or any other officer of
Borrower designated in writing to the Administrative Agent by the Chief
Executive Officer, Chief Administrative Officer, President or Treasurer of
Borrower as being authorized to give such notices under this Agreement) prior to
receipt of a Notice of Borrowing.  In each such case, Borrower hereby waives the
right to dispute the Administrative Agent’s record of the terms of such
telephonic notice of such proposed Borrowing, absent manifest error.

 

1.04         Disbursement of Funds.  Except as otherwise specifically provided
in the immediately succeeding sentence, no later than 11:00 a.m. (New York time)
(or such earlier time as the Administrative Agent agrees to) on the Closing
Date, each Lender will make available its pro rata portion of each such
Borrowing requested to be made on such date, if the conditions set forth in
Section 5 have been satisfied (as determined by the Lenders).  All such amounts
shall be made available in Dollars and in immediately available funds at the
Payment Office of the Administrative Agent and the Administrative Agent will
make available to Borrower (prior to 1:00 P.M. (New York Time) on such day to
the extent of funds actually received by the Administrative Agent prior to 12:00
Noon (New York Time) on such day) at the Payment Office, in the account
specified in the applicable Notice of Borrowing, the aggregate of the amounts so
made available by the Lenders.

 

1.05         Notes.

 

(a)           Each Borrower’s obligation to pay the principal of, and interest
on, the Loans made by each Lender shall, if requested by such Lender, be
evidenced by a promissory note duly executed and delivered by Borrower in a form
reasonably acceptable to the Administrative Agent hereto with blanks
appropriately completed in conformity herewith (each a “Note” and, collectively,
the “Notes”).

 

(b)           Each Note shall (i) be executed by Borrower, (ii) be payable to
the order of such Lender that has requested a Note and be dated the Closing
Date, (iii) be in a stated principal amount equal to the Lender’s pro rata share
of the Loans and be payable in the

 

2

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

 

principal amount of the Loans evidenced thereby, (iv) mature on the Maturity
Date, (v) bear interest as provided in Section 1.07 in respect of the Loans
evidenced thereby, (vi) be subject to voluntary prepayment and mandatory
repayment as provided in Sections 4.01 and 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.

 

(c)           Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby.  Failure to make any
such notation or any error in any such notation or endorsement shall not affect
Borrower’s obligations in respect of such Loans.

 

(d)           Notwithstanding anything to the contrary contained above in this
Section 1.05 or elsewhere in this Agreement, Notes shall be delivered only to
Lenders that at any time specifically request the delivery of such Notes.  No
failure of any Lender to request or obtain a Note evidencing its Loans to
Borrower shall affect or in any manner impair the obligations of Borrower to pay
the Loans (and all related Obligations) incurred by Borrower that would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the Credit Documents.  Any Lender that does not have a Note
evidencing its outstanding Loans shall in no event be required to make the
notations otherwise described in preceding clause (c).  At any time (including,
without limitation, to replace any Note that has been destroyed or lost) when
any Lender requests the delivery of a Note to evidence any of its Loans,
Borrower shall promptly execute and deliver to such Lender the requested Note in
the appropriate amount or amounts to evidence such Loans provided that, in the
case of a substitute or replacement Note, Borrower shall have received from such
requesting Lender (i) an affidavit of loss or destruction and (ii) a customary
lost/destroyed Note indemnity, in each case in form and substance reasonably
acceptable to Borrower and such requesting Lender, and duly executed by such
requesting Lender.

 

1.06         Joint and Several.  The obligations of General Maritime Subsidiary
Corporation and General Maritime Subsidiary II Corporation as “Borrower”
hereunder and under the other Credit Documents are joint and several. Without
limiting the generality of the foregoing, reference is hereby made to the
Holdings Guaranty, to which the obligations of Arlington and the Parent are
subject.

 

1.07         Interest.

 

(a)           Borrower agrees to pay interest in respect of the unpaid principal
amount of each Loan (as such principal amount may be increased or decreased
pursuant hereto) from the date the proceeds thereof are made available to
Borrower until the maturity (whether by acceleration or otherwise) of such Loan
at a rate per annum equal to (i) the Eurodollar Rate for each Interest Period
plus 6% if Borrower elects to make such payment in cash on the applicable
Interest Payment Date, (ii) prior to a Qualified Stock Issuance, the Eurodollar
Rate for each interest period plus 9% if Borrower elects to make such payment by
adding it to the outstanding principal amount of the Loans on the applicable
Interest Payment Date, and (iii) after a Qualified Stock Issuance, the
Eurodollar Rate for each Interest Period plus 7% if Borrower elects to make such
payment by adding it to the outstanding principal amount of the Loans on the
applicable

 

3

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

 

Interest Payment Date.  Interest may be paid in cash or in kind at the election
of Borrower in accordance with the foregoing, which election shall be made in
writing and provided to the Administrative Agent prior to the relevant Interest
Payment Date.

 

(b)           Without duplication, (1) Overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan and any other overdue
amount payable hereunder, in each case at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable hereunder, such amount to
be payable on demand in cash (provided, however, that, to the extent all or any
portion of such interest is not permitted to be paid on demand in cash when due
pursuant to the Intercreditor Agreements, such amounts shall be payable solely
by adding the amount of such interest to the aggregate principal amount of the
outstanding Loan), (2) from (I) the end of the applicable cure period for an
Event of Default subject to a cure period or (II) the 45th day after the
occurrence of an Event of Default that is not subject to a cure period, in each
case, so long as such Event of Default is not waived and for so long as  such
Event of Default is continuing, each Loan and all other Obligations shall bear
interest on the outstanding amount thereof at a per annum rate equal to 2
percentage points above the per annum rate otherwise applicable hereunder, such
amount to (x) accrue from and after such 45th day upon notice by the
Administrative Agent at any time or upon an Event of Default under Section 10.05
and (y) be payable on demand in cash or in kind at the election of the Borrower
and (3) at any time during a Standstill Extension Period, under and as defined
in the Intercreditor Agreements, each Loan shall bear interest on the
outstanding principal amount thereof at a per annum rate equal to the Eurodollar
Rate plus 9%, which amount shall be payable on the last day of each month in
cash.

 

(c)           Upon and after the occurrence of any (1) Dilutive Issuance or (2)
material breach (after notice and, if such breach is curable, the opportunity to
cure), excluding a Dilutive Issuance, by Parent of the terms of the Investment
Agreement and/or the Warrants (including, with respect to any adjustment to the
number of shares of common stock obtainable upon exercise of the Warrant,
issuance of additional Warrants, rights or securities to the holder under the
Warrant and/or any failure to issue Warrant Exercise Shares upon exercise of any
Warrants) (any of the foregoing, an “Interest Rate Adjustment Event”), the per
annum interest rate on the Notes shall increase by two percentage points and
shall thereafter increase by an additional two percentage points on each 3-month
anniversary of such Interest Rate Adjustment Event (subject to an aggregate cap
on the interest rate hereunder of 18% per annum) and shall remain at such rate
until all Interest Rate Adjustment Events have been cured or waived in writing
by Lender, it being understood that (A) solely with respect to the matter
described in clause (1) the interest rate adjustment described in this paragraph
shall be the only remedy available to Lender and any other Person; provided that
the foregoing shall not limit any remedies under the Investment Agreement or the
Warrants with respect to any breach by the Parent thereof, including with
respect to obtaining the Shareholder Approval, and (B) solely with respect to
any material breach described in clause (2) the interest rate adjustment
described in this paragraph shall be in addition to any other remedies available
to Lenders, Administrative Agent and Collateral Agent under this Agreement and
the Credit Documents.

 

(d)           Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
Loans and shall promptly notify Borrower and the respective Lenders thereof. 
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.

 

4

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

 

1.08         Intentionally omitted.

 

1.09         Increased Costs, Illegality, etc.  (a) In the event that any Lender
shall have determined in good faith (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):

 

(i)            on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or

 

(ii)           at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to any
Loan because of (x) any change since the Closing Date in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
order, guideline or request, such as, for example, but not limited to:  (A) a
change in the basis of taxation of payment to any Lender of the principal of or
interest on such Loan or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income, gross
receipts or net profits of such Lender, or any franchise tax based on net
income, net profits or net worth, of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which such Lender’s
principal office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in respect
of Indemnified Taxes pursuant to Section 4.04, or (B) a change in official
reserve requirements but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar Rate
and/or (y) other circumstances arising since the Closing Date affecting such
Lender or the interbank Eurodollar market or the position of such Lender in such
market; or

 

(iii)          at any time, that the making or continuance of any Loan has been
made (x) unlawful by any law or governmental rule, regulation or order, (y)
impossible by compliance by any Lender in good faith with any governmental
request (whether or not having force of law) and/or (z) impracticable as a
result of a contingency occurring after the Closing Date which materially and
adversely affects the interbank Eurodollar market;

 

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the Lenders).  Thereafter (x) in the
case of clause (i), the rate of interest applicable to any affected Loans then
outstanding shall be the Base Rate, as in effect from time to time, plus the
applicable margin set forth in Section 1.07(a) as in effect from time to time
minus 1%, from the date such notice is delivered to Borrower and thereafter
until such time as the Administrative Agent notifies Borrower and the Lenders
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, (y) in the case of clause (ii) above, Borrower agrees to pay to
such Lender, upon written demand therefor,

 

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such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender in its reasonable
good faith discretion shall determine) as shall be required to compensate such
Lender for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for and the calculation thereof,
submitted to Borrower by such Lender in good faith shall, absent manifest error,
be final and conclusive and binding on all the parties hereto) and (z) in the
case of clause (iii) above such Lender shall so notify the Administrative Agent
and Borrower (and the Administrative Agent shall promptly give notice thereof to
the other Lenders) and thereafter (A) except in the case of an event of the type
described in clause (iii)(z) above, Borrower shall prepay in full the affected
Loans of such Lender, together with accrued interest thereon (and, in the event
all of such Lender’s Loans are being repaid, any other amounts which may be
owing to such Lender hereunder (including, without limitation, any accrued and
unpaid interest)), on either the last day of the then current Interest Period
applicable to each such affected Loan (if such Lender may lawfully continue to
maintain and fund such Loans) or immediately (if such Lender may not lawfully
continue to maintain and fund such Loans to such day) and (B) in the case of an
event of the type described in clause (iii)(z) above, all outstanding Loans of
such Lender shall, from the date such notice is delivered to Borrower and
thereafter until such time as the Administrative Agent or such Lender shall
notify Borrower that the circumstances giving rise to the operation of clause
(iii)(z) above with respect to such Lender no longer exist, bear interest at a
rate equal to the Base Rate, as in effect from time to time.  The Administrative
Agent and each Lender (to the extent it continues to be a Lender hereunder)
agree that if any of them gives notice to Borrower of any of the events
described in clause (i), (ii) or (iii) above, it shall promptly notify Borrower
and, in the case of any such Lender, the Administrative Agent, if such event
ceases to exist.

 

(b)           If any Lender in good faith determines that after the Closing Date
the introduction of or effectiveness of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any governmental
authority, central bank or comparable agency will have the effect of increasing
the amount of capital required or requested to be maintained by such Lender, or
any corporation controlling such Lender, based on the existence of its
obligations hereunder, then Borrower agrees to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital.  In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Lender’s determination of compensation owing under this
Section 1.09(b) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.  Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 1.09(b), will give
prompt written notice thereof to Borrower, which notice shall show in reasonable
detail the basis for and calculation of such additional amounts.

 

1.10         Compensation.  Borrower agrees, to compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting and the calculation of such compensation), for all reasonable
losses, expenses and liabilities (including,

 

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without limitation, any such loss, expense or liability incurred by reason of
the liquidation or reemployment of deposits or other funds required by such
Lender to fund its Loans but excluding any loss of anticipated profits) which
such Lender may sustain in respect of Loans made to Borrower:  (i) if for any
reason (other than a default by such Lender or the Administrative Agent) a
Borrowing of Loans does not occur on the Closing Date; (ii) if any prepayment or
repayment (including any prepayment or repayment made pursuant to Section
1.09(a), Section 4.01 or Section 4.02 or as a result of an acceleration of the
Loans pursuant to Section 10) of any of its Loans occurs on a date which is not
the last day of an Interest Period with respect thereto; (iii) if any prepayment
of any of its Loans is not made on any date specified in a notice of prepayment
given by Borrower; or (iv) as a consequence of any other Default or Event of
Default arising as a result of Borrower’s failure to repay Loans or make payment
on any Note held by such Lender when required by the terms of this Agreement.

 

1.11         Intentionally Omitted.

 

SECTION 2 - INTENTIONALLY OMITTED.

 

SECTION 3 - FEES.  Borrower shall pay to the Administrative Agent and Collateral
Agent, for the Administrative Agent’s and Collateral Agent’s own account, such
other fees as have been agreed to in writing by Borrower and the Administrative
Agent and/or Collateral Agent.  Notwithstanding the foregoing, or any other
provision herein to the contrary, at any time OCM Administrative Agent, LLC was
or is the Administrative Agent, it shall receive no fees (other than
reimbursement fees for expenses, including, without limitation, reasonable legal
fees and expenses) in connection with its role as the Administrative Agent
hereunder.

 

SECTION 4 - PREPAYMENTS; PAYMENTS; TAXES.

 

4.01         Voluntary Prepayments.  Borrower shall have the right to prepay the
Loans, without premium or penalty except as provided by law and except as set
forth below in clause (f), in whole or in part at any time and from time to time
on the following terms and conditions:

 

(a)           Borrower shall give the Administrative Agent prior to 12:00 Noon
(New York time) at its Notice Office at least three Business Days’ prior written
notice (including email or telephonic notice promptly confirmed in writing) of
its intent to prepay such Loans and the amount of such prepayment, which notice
the Administrative Agent shall promptly transmit to each of the Lenders;

 

(b)           each prepayment shall be in an aggregate principal amount of at
least $1,000,000 or such lesser amount of a Loan which is outstanding;

 

(c)           at the time of any prepayment of Loans pursuant to this Section
4.01 on any date other than the last day of the Interest Period applicable
thereto, Borrower shall pay the amounts required pursuant to Section 1.10,
together with accrued and unpaid interest on the amount being prepaid;

 

(d)           Borrower may, upon five Business Days’ written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly

 

7

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transmit to each of the Lenders), prepay all Loans, together with accrued and
unpaid interest and other amounts owing to the Lender;

 

(e)           except as expressly provided in the preceding clause (d), each
prepayment shall be applied pro rata among the Loans; and

 

(f)            if such prepayment is made on or prior to the second anniversary
of the Closing Date, Borrower shall pay a prepayment premium equal to 10% of the
principal amount being prepaid.

 

4.02         Mandatory Prepayments.

 

(a)           On (i) the date of any Collateral Disposition involving a
Mortgaged Vessel (other than a Collateral Disposition constituting an Event of
Loss) and (ii) the earlier of (A) the date which is 180 days following any
Collateral Disposition constituting an Event of Loss involving a Mortgaged
Vessel and (B) the date of receipt by Borrower, any of its Subsidiaries or the
Administrative Agent of the insurance proceeds relating to such Event of Loss,
Borrower shall be required to permanently repay and reduce the Loans in an
amount equal to the greater of (1) the product of (x) the sum of the then
outstanding aggregate principal amount of Indebtedness under the Senior Credit
Facilities and the Loans and (y) a fraction (A) the numerator of which is equal
to the appraised value (as determined in accordance with the most recent report
delivered to the Administrative Agent (or obtained by the Administrative Agent
at the written direction of the Required Lenders) pursuant to Section 8.01(c) of
the Mortgaged Vessel or Mortgaged Vessels which is/are the subject of such
Collateral Disposition and (B) the denominator of which is equal to the
Aggregate Mortgaged Vessel Value (as determined in accordance with the most
recent appraisal report delivered to the Administrative Agent (or obtained by
the Administrative Agent at the written direction of the Required Lenders)
pursuant to Section 8.01(c) before giving effect to such Collateral Disposition)
and (2) in the case of a Mortgaged Vessel which is older than 15 years at the
time of such Collateral Disposition, the Net Cash Proceeds thereof; provided
that (I) the Parent and the Borrowers may retain up to the Permitted Amount,
(II) the foregoing payment shall be reduced by the amount of any mandatory
prepayment that results in a permanent reduction of the loans (and if
applicable, related commitment) under the Senior Credit Facilities with respect
to such Collateral Disposition, (III) if prior to the date on which payment is
due hereunder, the Borrower provides the Administrative Agent with written
notice of its intent to consummate a Vessel Exchange with the proceeds, then so
long as no Default or Event of Default is continuing, the Credit Parties may use
the funds received in such Collateral Disposition in accordance with the
provisions of Section 9.02(a) and (IV) the Borrower must provide written notice
to the Administrative Agent if it retains any amount pursuant to sub-clause (I)
of this proviso or utilizing any amount to permanently reduce the loans under
the Senior Credit Facilities pursuant to sub-clause (II) of this proviso,
provided further that, if a Default or Event of Default occurs after the date of
such Collateral Disposition and before the procedures set forth in Section
9.02(a) are completed, the Parent shall apply the proceeds of such Collateral
Disposition in accordance with Section 4.02(a); provided further, that to the
extent excess proceeds remain after any Vessel Exchange, such excess shall be
applied first to repay the Senior Credit Facilities and second to repay the
Loans.  Without limiting anything otherwise provided in this Credit Agreement,
the Borrowers hereby acknowledge that they are obligated to comply with Sections
9.02 and 9.09.

 

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(b)           Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans shall be repaid in full on the
Maturity Date.

 

(c)           In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, upon the occurrence of a default under
Section 9.09, the Borrower shall be required to repay Loans and the obligations
under the Senior Credit Facilities (in accordance with the terms of the
Intercreditor Agreements) in accordance with Section 4.02(a) and Section
9.09(II) in an amount required to cure such default, provided that it is
understood and agreed that the requirement to repay Loans under this Section
4.02(c) shall not be deemed to be a waiver of any other right or remedy that any
Lender may have as a result of an Event of Default under Sections 9.09.

 

4.03         Method and Place of Payment.  Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 12:00 Noon (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office of the
Administrative Agent.  Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.

 

4.04         Net Payments; Taxes. (a) All payments made by any Credit Party
hereunder or under any Note will be made without setoff, counterclaim or other
defense. All such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature, and all interest, penalties or
similar liabilities with respect thereto, now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (“Taxes”) (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income, net profits or any franchise tax based on net income, net
profits or net worth, of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein and any United States federal withholding tax that would not have
been imposed but for a failure by such recipient (or any financial institution
through which any payment is made to such recipient) to comply with the
applicable requirements of FATCA)) (all such non-excluded Taxes being referred
to collectively as “Indemnified Taxes”).  If any Indemnified Taxes are so levied
or imposed, Borrower agrees to pay the full amount of such Indemnified Taxes,
and such additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Indemnified Taxes, will not be less than the
amount provided for herein or in such Note.  If any amounts are payable in
respect of Indemnified Taxes pursuant to the preceding sentence, Borrower agrees
to reimburse the Administrative Agent and each Lender, upon the written request
of the Administrative Agent or such Lender, for Taxes imposed on or measured by
the net income, net profits or any franchise tax based on net income, net
profits or net worth, of the Administrative Agent or such Lender in respect of
such amounts pursuant to the laws of the jurisdiction in which the
Administrative Agent or such Lender is organized or in which the principal
office or applicable lending office of the Administrative Agent or such Lender
is located or under the laws of any political subdivision

 

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or taxing authority of any such jurisdiction in which the Administrative Agent
or such Lender is organized or in which the principal office or applicable
lending office of the Administrative Agent or such Lender is located and for any
withholding of Taxes as the Administrative Agent or such Lender shall determine
are payable by, or withheld from, the Administrative Agent or such Lender, in
respect of such amounts so paid to or on behalf of the Administrative Agent or
such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of the Administrative Agent or such Lender pursuant to this
sentence.  Borrower will furnish to the Administrative Agent within 45 days
after the date of payment of any Indemnified Taxes is due pursuant to applicable
law certified copies of tax receipts evidencing such payment by Borrower. 
Borrower agrees to indemnify and hold harmless the Administrative Agent and each
Lender, and reimburse the Administrative Agent or such Lender upon its written
request, for the amount of any Indemnified Taxes so levied or imposed and paid
by the Administrative Agent or such Lender.

 

(b)           The Administrative Agent and each Lender agrees to use reasonable
efforts (consistent with legal and regulatory restrictions and subject to
overall policy considerations of the Administrative Agent or such Lender) to
file any certificate or document or to furnish to Borrower any information as
reasonably requested by Borrower that may be necessary to establish any
available exemption from, or reduction in the amount of, any Indemnified Taxes;
provided, however, that nothing in this Section 4.04(b) shall require the
Administrative Agent or a Lender to disclose any confidential information
(including, without limitation, its tax returns or its calculations) or bear any
material cost that is not reimbursed by Borrower or its Subsidiaries.

 

(c)           If Borrower pays any additional amount under this Section 4.04 to
the Administrative Agent or a Lender and the Administrative Agent or such Lender
determines in its sole discretion exercised in good faith that it has actually
received or realized in connection therewith any refund or any reduction of, or
credit against, its Tax liabilities in or with respect to the taxable year in
which the additional amount is paid (a “Tax Benefit”), the Administrative Agent
or such Lender shall pay to Borrower an amount that the Administrative Agent or
such Lender shall, in its sole discretion exercised in good faith, determine is
equal to the net benefit, after tax and reasonable expenses and costs incurred
in obtaining such Tax Benefit, which was obtained by the Administrative Agent or
such Lender in such year as a consequence of such Tax Benefit; provided,
however, that (i) the Administrative Agent or any Lender may determine, in its
sole discretion exercised in good faith consistent with the policies of the
Administrative Agent or such Lender, whether to seek a Tax Benefit, (ii) any
Taxes that are imposed on the Administrative Agent or a Lender as a result of a
disallowance or reduction (including through the expiration of any tax credit
carryover or carryback of the Administrative Agent or such Lender that otherwise
would not have expired) of any Tax Benefit with respect to which the
Administrative Agent or such Lender has made a payment to Borrower pursuant to
this Section 4.04(c) shall be treated as an Indemnified Tax for which Borrower
is obligated to indemnify the Administrative Agent or such Lender pursuant to
this Section 4.04 without any exclusions or defenses, (iii) nothing in this
Section 4.04(c) shall require the Administrative Agent or any Lender to disclose
any confidential information to Borrower (including, without limitation, its tax
returns), and (iv) neither the Administrative Agent nor any Lender shall be
required to pay any amounts pursuant to this Section 4.04(c) at any time during
which a Default or Event of Default exists.

 

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SECTION 5 - CONDITIONS PRECEDENT TO THE CLOSING DATE.  The obligation of each
Lender to make Loans on the Closing Date is subject at the time of the making of
such Loans to the satisfaction or waiver of the following conditions, in each
case in the sole discretion of the Lenders (except where limited to
reasonableness below):

 

5.01         Closing Date; Notes.  On or prior to the Closing Date, if requested
by a Lender, there shall have been delivered to the Administrative Agent, for
the account of such Lender, the appropriate Note for such Lender executed by
Borrower, in each case in the amount, maturity and as otherwise provided herein.

 

5.02         Fees, etc. On the Closing Date, Borrower shall have paid to the
Administrative Agent and the Lenders all costs, fees and expenses (including,
without limitation, reasonable legal fees and expenses) payable to the Agents
and the Lenders in respect of the transactions contemplated by the Credit
Documents to the extent then due.

 

5.03         Opinions of Counsel.

 

(a)           On the Closing Date, the Administrative Agent and the Lenders
shall have received from Kramer Levin Naftalis & Frankel LLP, special New York
counsel to the Parent and its Subsidiaries, an opinion addressed to the
Administrative Agent and each of the Lenders and dated the Closing Date which
shall (x) be in form and substance acceptable the Lenders and (y) cover the
perfection of the security interests (other than those to be covered by opinions
delivered pursuant to clauses (b) through (d) below) granted pursuant to the
Security Documents and such other matters incidental to the transactions
contemplated herein as the Lenders may request.

 

(b)           On the Closing Date, the Administrative Agent and the Lenders
shall have received from Constantine P. Georgiopoulos, special New York maritime
counsel to the Parent and its Subsidiaries, an opinion addressed to the
Administrative Agent and each of the Lenders and dated the Closing Date which
shall (x) be in form and substance acceptable to the Lenders and (y) cover the
perfection of the security interests granted pursuant to the Vessel Mortgages
and such other matters incidental thereto as the Lenders may request.

 

(c)           On the Closing Date, the Administrative Agent and the Lenders
shall have received from George E. Henries, Esq., special Liberian counsel to
the Parent and its Subsidiaries (or other counsel to the Parent and its
Subsidiaries qualified in such jurisdiction and reasonably satisfactory to the
Lenders), an opinion addressed to the Administrative Agent and each of the
Lenders and dated the Closing Date, which shall (x) be in form and substance
acceptable to the Lenders and (y) in the case of each Mortgaged Vessel
registered under the laws and flag of the Republic of Liberia, cover the
perfection of the security interests granted pursuant to the relevant Vessel
Mortgage(s) and such other matters incidental thereto as the Lenders may
request.

 

(d)           On the Closing Date the Administrative Agent and the Lenders shall
have received from Dennis J. Reeder, Esq., special Marshall Islands counsel to
the Parent and its Subsidiaries (or other counsel to the Parent and its
Subsidiaries qualified in such jurisdiction and reasonably satisfactory to the
Lenders), an opinion addressed to the Administrative Agent and

 

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each of the Lenders and dated the Closing Date, which shall (x) be in form and
substance acceptable to the Lenders, and shall cover, inter alia, matters with
respect to the Investment Agreement, issuance of the Warrants and the other
Credit Documents, and (y) in the case of each Mortgaged Vessel registered under
the laws and flag of the Republic of Marshall Islands, cover the perfection of
the security interests granted pursuant to the relevant Vessel Mortgage(s) and
such other matters incidental thereto as the Lenders may request.

 

(e)           On the Closing Date, the Administrative Agent and the Lenders
shall have received from Conyers Dill & Pearman Limited, special Bermuda counsel
to the Parent and its Subsidiaries, an opinion addressed to the Administrative
Agent and each of the Lenders and dated the Closing Date which shall (x) be in
form and substance acceptable to the Lenders and (y) cover the perfection of the
security interests (other than those to be covered by opinions delivered
pursuant to clauses (a) through (d) above) granted pursuant to the Security
Documents and such other matters incidental to the transactions contemplated
herein as the Lenders may request.

 

(f)            On the Closing Date the Administrative Agent and the Lenders
shall have received from Golsblat BLP, special Russian counsel to each of the
Credit Parties, an opinion addressed to the Administrative Agent and each of the
Lenders and dated as of the Closing Date which shall be in form and substance
acceptable to the Lenders and cover such matters incidental to the transactions
contemplated herein as the Lenders may request;

 

(g)           On the Closing Date the Administrative Agent and the Lenders shall
have received from Albuquerque & Associados, special Portuguese counsel to each
of the Credit Parties, an opinion addressed to the Administrative Agent and each
of the Lenders and dated as of the Closing Date which shall be in form and
substance acceptable to the Lenders and cover such matters incidental to the
transactions contemplated herein as the Lenders may request;

 

(h)           On the Closing Date the Administrative Agent and the Lenders shall
have received from Allen & Gledhill LLP, special Singaporean counsel to each of
the Credit Parties, an opinion addressed to the Administrative Agent and each of
the Lenders and dated as of the Closing Date which shall be in form and
substance acceptable to the Lenders and cover such matters incidental to the
transactions contemplated herein as the Lenders may request;

 

(i)            On the Closing Date, the Administrative Agent and the Lenders
shall have received from counsel to the Parent and its Subsidiaries in each
other relevant jurisdictions identified by the Lenders, an opinion addressed to
the Administrative Agent and each of the Lenders and dated the Closing Date,
each of which shall be in form and substance acceptable to the Lenders.

 

5.04         Corporate Documents; Proceedings; etc.  (a) On the Closing Date,
the Administrative Agent shall have received a certificate, dated the Closing
Date, signed by the Chairman of the Board, the President, any Vice President,
the Treasurer or an authorized manager, member or general partner of each Credit
Party, and attested to by the Secretary or any Assistant Secretary (or, to the
extent such Credit Party does not have a Secretary or Assistant Secretary, the
analogous Person within such Credit Party) of such Credit Party, as the case may
be, in form and substance satisfactory to the Lenders, with appropriate
insertions, together with

 

12

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copies of the Certificate of Incorporation and By-Laws (or equivalent
organizational documents) of such Credit Party and the resolutions of such
Credit Party referred to in such certificate, and the foregoing shall be
acceptable to the Lenders.

 

(b)           All corporate, limited liability company, partnership and legal
proceedings, and all material instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents, shall be
satisfactory in form and substance to the Administrative Agent and the Lenders,
and the Administrative Agent shall have received all information and copies of
all documents and papers, including records of corporate, limited liability
company and partnership proceedings, governmental approvals, good standing
certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent or the Lenders may have requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.

 

5.05         Management Agreements; Debt Agreements; Employment Agreements
Agreements.  On or prior to the Closing Date, there shall have been delivered to
the Administrative Agent or its counsel true and correct copies of the following
documents:

 

(a)           all agreements (other than Employment Agreements) with respect to
the management of the Parent or any of its Subsidiaries or any of the Vessels
(collectively, the “Management Agreements”);

 

(b)           all agreements evidencing or relating to Indebtedness of the
Parent or any of its Subsidiaries which is to remain outstanding (other than the
Credit Documents) after giving effect to the incurrence of Loans on the Closing
Date (if any) which have not been otherwise publicly disclosed (collectively,
the “Debt Agreements”); and

 

(c)           all employment agreements entered into by the Parent or any of its
Subsidiaries with members of management of the Parent or any of such
Subsidiaries the terms of which have not otherwise been publicly disclosed
(collectively, the “Employment Agreements”);

 

all of which Management Agreements, Debt Agreements and Employment Agreements,
shall be in form and substance satisfactory to the Lenders and shall be in full
force and effect on the Closing Date.

 

5.06         Guaranty.  On the Closing Date (i) each Subsidiary Guarantor shall
have duly authorized, executed and delivered to the Administrative Agent the
Subsidiaries Guaranty in form and substance satisfactory to the Administrative
Agent, and the Subsidiaries Guaranty shall be in full force and effect and
(ii) the Holdings Guaranty contained in Section 14 hereof, shall be in full
force and effect.

 

5.07         Pledge and Security Agreement.  On the Closing Date, Parent,
Borrower and each of the Subsidiary Guarantors described in clause (x) of the
definition thereof shall have (x) duly authorized, executed and delivered the
Pledge Agreement in form and substance satisfactory to the Lenders and shall
have (A) delivered to Collateral Agent or the applicable agent under the Senior
Credit Facilities, as pledgee, all the Pledged Securities referred to therein,
together with executed and undated stock powers in the case of capital stock
constituting Pledged Securities, including, without limitation, a charge over
shares of any Bermuda registered

 

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Subsidiary Guarantor described in clause (x) of the definition thereof taken by
way of a Bermuda-law governed charge over shares and (B) otherwise complied with
all of the requirements set forth in the Pledge Agreement and (y) duly
authorized, executed and delivered any other related documentation necessary or
advisable to perfect the Lien on the Pledge Agreement Collateral in the
respective jurisdictions of formation of the respective Subsidiary Guarantor or
Borrower, as the case may be.

 

5.08         Solvency Certificate.  On the Closing Date, the Parent shall cause
to be delivered to the Administrative Agent a solvency certificate from the
senior financial officer of the Parent, substantially in the form of Exhibit K,
which shall be addressed to the Administrative Agent and each of the Lenders and
dated the Closing Date, setting forth the conclusion that, after giving effect
to the incurrence of all the financings contemplated hereby, Borrowers,
Arlington and the Subsidiary Guarantors together, and the Parent and its
Subsidiaries taken as a whole, are not insolvent and will not be rendered
insolvent by the incurrence of such indebtedness, and will not be left with
unreasonably small capital with which to engage in their respective businesses
and will not have incurred debts beyond their ability to pay such debts as they
mature.

 

5.09         Financial Statements.  On the Closing Date, the Administrative
Agent and the Lenders shall have received copies of (i) the financial statements
referred to in Sections 7.05(a), which financial statements shall be in form and
substance satisfactory to the Lenders and (ii) Cash Flow Projections for the
13-week period beginning on the Restatement Effective Date in form and substance
reasonably satisfactory to the Lenders.

 

5.10         Material Adverse Change; Approvals.  (a) On or prior to the Closing
Date, nothing shall have occurred (and the Administrative Agent or the Lenders
shall have become aware of no facts or conditions not previously known to the
Administrative Agent or the Lenders) which the Administrative Agent or the
Lenders shall determine is reasonably likely to have an adverse effect on the
rights and remedies of the Lenders, or the Administrative Agent, or on the
ability of the Parent and its Subsidiaries, taken as a whole, to perform its or
their Obligations, or which is reasonably likely to have a Material Adverse
Effect.

 

(b)           On or prior to the Closing Date, all necessary governmental
(domestic and foreign) and third party approvals and/or consents (including,
without limitation, any contractual approvals agreed to by the Parent or
Borrower and the Administrative Agent or the Lenders) in connection with the
Loans, the Credit Documents, the other transactions contemplated hereby and
thereby and the granting of Liens under the Credit Documents shall have been
obtained and remain in effect, and all applicable waiting periods with respect
thereto shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes adverse conditions upon the
consummation of this Agreement or the other transactions contemplated by the
Credit Documents or otherwise referred to herein or therein.  On the Closing
Date, there shall not exist any judgment, order, injunction or other restraint
issued or filed or a hearing seeking injunctive relief or other restraint
pending or notified prohibiting or imposing materially adverse conditions upon
this Agreement or the other transactions contemplated by the Credit Documents or
otherwise referred to herein or therein.

 

5.11         Litigation.  On the Closing Date, there shall be no actions, suits
or proceedings pending or threatened (i) with respect to this Agreement or any
other Credit

 

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Document or (ii) which the Lenders shall determine has had, or could reasonably
be expected to have, a Material Adverse Effect.

 

5.12         Appraisals.  On or prior to the Closing Date, the Administrative
Agent shall have received an appraisal report of a recent date (and in no event
dated earlier than 60 days prior to the Closing Date) in scope, form and
substance reasonably satisfactory to the Lenders, and from two Approved
Appraisers stating the then current Fair Market Value of each of the Mortgaged
Vessels on such date, the results of which shall be reasonably satisfactory to
the Lenders.

 

5.13         Refinancing.  (a) On the Closing Date, after giving effect to all
transactions on such date, the total commitments pursuant to the 2008 Credit
Agreement shall have been permanently reduced to $550,000,000 (and the loans
thereunder shall have been repaid and the commitments thereunder shall have been
reduced such that they do not exceed $550,000,000 after such reduction) and all
letters of credit thereunder shall continue under the 2008 Credit Agreement. The
applicable Credit Parties shall have entered into the 2008 Credit Agreement,
dated as of the Closing Date, which amendment is satisfactory to the Lenders.

 

(b)           On the Closing Date, the lenders under the 2010 Credit Agreement
shall have received a principal payment of not less than $25,000,000 and
immediately thereafter there shall be no more than $328,210,250 outstanding
under the 2010 Credit Agreement. The applicable Credit Parties shall have
entered into the 2010 Credit Agreement, dated as of the Closing Date, which
amendment is satisfactory to the Lenders.

 

(c)           On the Closing Date, after giving effect to the transactions on
such date, the Parent and its Subsidiaries shall have no outstanding
Indebtedness except for (i) the Loans, (ii) Indebtedness under the Senior Debt
Documents and (iii) certain other Indebtedness of the Parent and its
Subsidiaries listed on Schedule V.

 

5.14         Assignments of Earnings and Insurances.  On the Closing Date, each
Credit Party which owns a Mortgaged Vessel on such date shall have duly
authorized, executed and delivered an Assignment of Earnings in form and
substance satisfactory to the Lenders (as modified, supplemented or amended from
time to time, the “Assignments of Earnings”) and an Assignment of Insurances in
form and substance satisfactory to the Lenders (as modified, supplemented or
amended from time to time, the “Assignments of Insurances”), together covering
all of such Credit Party’s present and future Earnings and Insurance Collateral,
in each case together with:

 

(a)           proper Financing Statements (Form UCC-1) fully executed (if
applicable) for filing under the UCC or in other appropriate filing offices of
each jurisdiction as may be necessary or desirable to perfect the security
interests purported to be created by the Assignment of Earnings and the
Assignment of Insurances;

 

(b)           certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as debtor and that are filed in the jurisdictions
referred to in Section 5.14(a) above, together with copies of such other
financing statements (none of which shall cover the Collateral except to the
extent

 

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evidencing Permitted Liens unless in respect of which the Collateral Agent shall
have received Form UCC-3 Termination Statements (or such other termination
statements as shall be required by local law) fully executed for filing if
required by applicable laws); and

 

(c)           evidence that all other actions necessary or desirable to perfect
and protect the security interests purported to be created by the Assignment of
Earnings and the Assignment of Insurances have been taken.

 

5.15         Mortgages; Certificates of Ownership; Searches; Class Certificates;
Appraisal Report; Insurance.  On the Closing Date:

 

(a)           Each Subsidiary Guarantor which owns a Mortgaged Vessel shall have
duly authorized, executed and delivered, and caused to be recorded in the
appropriate vessel registry a mortgage (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the “Vessel
Mortgages”), substantially in form of and substance satisfactory to the Lenders,
with respect to each Vessel listed on Schedule III (each a “Mortgaged Vessel”)
and the Vessel Mortgages shall be effective to create in favor of the Collateral
Agent a legal, valid and enforceable security interest, in and lien upon such
Mortgaged Vessels, subject only to Permitted Liens.  Except as specifically
provided above, all filings, deliveries of instruments and other actions
necessary or desirable to perfect and preserve such security interests shall
have been duly effected and the Collateral Agent shall have received evidence
thereof in form and substance reasonably satisfactory to the Lenders.

 

(b)           The Administrative Agent shall have received (x) certificates of
ownership from appropriate authorities showing (or confirmation updating
previously reviewed certificates and indicating) the registered ownership of
each Mortgaged Vessel by the relevant Subsidiary Guarantor and/or (y) the
results of maritime registry searches with respect to the Mortgaged Vessels,
indicating no record liens other than Liens in favor of the Collateral Agent and
Permitted Liens.

 

(c)           The Administrative Agent shall have received class certificates
from a classification society listed on Schedule X hereto or another
internationally recognized classification society acceptable to the Lenders,
indicating that each Mortgaged Vessel meets the criteria specified in
Section 7.24.

 

(d)           The Administrative Agent shall have received a report, in form and
scope reasonably satisfactory to the Lenders, from a firm of independent marine
insurance brokers reasonably acceptable to the Lenders with respect to the
insurance maintained by the Credit Parties in respect of the Mortgaged Vessels,
together with a certificate from such broker certifying that such insurances
(i) are placed with such insurance companies and/or underwriters and/or clubs,
in such amounts, against such risks, and in such form, as are customarily
insured against by similarly situated insureds for the protection of the
Administrative Agent, the Collateral Agent and/or the Lenders as mortgagee and
(ii) conform with the insurance requirements of the respective Vessel Mortgages.

 

5.16         Environmental Laws.  On the Closing Date, there shall not exist any
condition or occurrence on or arising from any Vessel or property owned or
operated or occupied

 

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by the Parent or any of its Subsidiaries that (a) results in material
noncompliance by the Parent or such Subsidiary with any applicable Environmental
Law or (b) could reasonably be expected to form the basis of a material
Environmental Claim against the Parent or any of its Subsidiaries or any such
Vessel or property.

 

5.17         No Default; Representations and Warranties.  On the Closing Date
after giving effect to the transactions on such date (i) there shall exist no
Default or Event of Default under any Credit Document, (ii) there shall exist no
default or event of default under the Senior Credit Facilities or Senior
Unsecured Note Documents, and (iii) all representations and warranties of the
Parent and its Subsidiaries contained herein or in any other Credit Document
shall be true and correct in all material respects.

 

5.18         Notice of Borrowing.  Prior to the making of the Loan, the
Administrative Agent shall have received the Notice of Borrowing required by
Section 1.03(a).  The acceptance of the proceeds of the Loans shall constitute a
representation and warranty by the Parent and Borrower to the Administrative
Agent and each of the Lenders that all of the conditions specified in this
Section 5 have been satisfied as of the time of the Loan (it being deemed that
the Lenders have determined that items are satisfactory or acceptable unless
they have otherwise stated in writing).  All of the applicable Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 5 and/or the definition of Collateral and Guaranty Requirements, unless
otherwise specified, shall be delivered to the Administrative Agent at the
Notice Office for the account of each of the Lenders and, except for the Notes,
in sufficient counterparts for each of the Lenders and shall be in form and
substance reasonably satisfactory to the Lenders.

 

5.19         Performance of Covenants.  Borrower and each Guarantor shall have
performed and complied with in all material respects all of its covenants and
agreements required to be performed or complied with by it under the Documents
(including, without limitation, Section 3.01 of the Investment Agreement).

 

5.20         Delivery of Warrants.  The Parent shall have executed and delivered
the Warrants.

 

5.21         Registration Rights Agreement.  Parent shall have executed and
delivered the Registration Rights Agreement.

 

5.22         Officer’s Certificate. Parent shall have delivered to the
Administrative Agent a certificate of the Parent, executed on its behalf by a
duly authorized officer thereof, dated as of the Closing Date, (A) stating that
the conditions specified in Section 5 have been satisfied, and (B) setting forth
the number of shares of common stock outstanding as of immediately prior to the
Closing and the aggregate number of shares of common stock initially issuable
upon exercise of the Warrants in accordance with Section 4.04 of the Investment
Agreement.

 

5.23         2008 Credit Agreement and 2010 Credit Agreement Secured Party
Consent. The secured parties under each of the 2008 Credit Agreement and the
2010 Credit Agreement will have filed the consent in the form of Exhibit R in
connection with the filing of the mortgages under Marshall Islands law in favor
of the Lenders.

 

5.24         Intentionally Omitted

 

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5.25         Intentionally Omitted

 

5.26         Lien Searches. On or before the Closing Date, the Administrative
Agent shall have received the results of a recent lien search in such
jurisdictions as the Lenders may reasonably request, and such search shall
reveal no liens on any Collateral of the Credit Parties except for liens
permitted by Section 9.01 or discharged on or prior to the Closing Date pursuant
to documentation satisfactory to the Lenders.

 

5.27         Margin Regulations. On the Closing Date, all Loans and other
financing to be made pursuant to this Agreement shall be in full compliance with
all applicable requirements (including without limitation the collateral
valuation requirements) of law, including, without limitation, the Margin
Regulations and the collateral valuation requirements thereunder, and each
Lender in good faith shall be able to complete the relevant forms establishing
compliance with the Margin Regulations.

 

5.28         No Conflicts. On the Closing Date, after giving effect to the
making of the Loans and the performance by the Credit Parties of the Credit
Documents, the financings incurred in connection therewith and the other
transactions contemplated hereby, there shall be no conflict with, or default
under, any material agreement or contractual or other restrictions which is
binding for the Parent or any of its Subsidiaries.

 

5.29         Collateral and Guaranty Requirements; Intercreditor Agreements.
(a) On or prior to the Closing Date, the Borrower shall, and shall have caused
its Subsidiaries to, have duly authorized, executed and delivered a valid and
effective grant of security in favor of the Collateral Agent of all of their
respective present and future interest in and benefits under the Collateral in
accordance with the Collateral and Guaranty Requirements, which grant shall be
prior to all Liens (other than Permitted Liens) other than Liens with respect to
the 2008 Credit Agreement and the 2010 Credit Agreement, pursuant to the
Intercreditor Agreement and the Secondary Intercreditor Agreement, and satisfied
all other requirements thereunder with respect to each Mortgaged Vessel or
Lenders shall have waived such requirements (other than the Specified
Requirements) and/or conditioned such waiver on the satisfaction of such
requirements within a specified period of time.

 

(b)           The Administrative Agent and the Lenders shall have received a
copy of the duly authorized and executed Intercreditor Agreements, which
Intercreditor Agreements shall be in form and substance reasonably satisfactory
to the Lenders and shall be in full force and effect in accordance with its
terms.

 

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SECTION 6 - INTENTIONALLY OMITTED.

 

SECTION 7 - REPRESENTATIONS, WARRANTIES AND AGREEMENTS.  In order to induce the
Administrative Agent to enter into this Agreement and the Lenders to enter into
this Agreement and to make the Loans, the Parent, Arlington and Borrower make
the following representations, warranties and agreements, on the date hereof and
on the Closing Date, all of which shall survive the execution and delivery of
this Agreement and the Notes and the making of the Loans:

 

7.01         Corporate/Limited Liability Company/Limited Partnership Status. 
Each Credit Party (i) is a duly organized and validly existing corporation,
limited liability company, limited company or limited partnership, as the case
may be, in good standing under the laws of the jurisdiction of its incorporation
or formation, (ii) has the corporate or other applicable power and authority to
own its property and assets and to transact the business in which it is
currently engaged and presently proposes to engage and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the conduct of its business as currently conducted requires such
qualifications, except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

7.02         Corporate Power and Authority.  Each Credit Party has the corporate
or other applicable power and authority to execute, deliver and perform the
terms and provisions of each of the Documents to which it is party and has taken
all necessary corporate or other applicable action to authorize the execution,
delivery and performance by it of each of such Documents.  Each Credit Party has
duly executed and delivered each of the Documents to which it is party, and each
of such Documents constitutes the legal, valid and binding obligation of such
Credit Party enforceable against such Credit Party in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).  In addition, (i) the board of directors of the Parent (the “Board of
Directors”) (a) has the corporate and other applicable power to authorize the
appointment of an independent committee of the Board of Directors  (the
“Independent Committee”) for the purposes of approving the transactions
contemplated by the Credit Documents and (b) has taken all necessary corporate
and other applicable action to (I) approve the appointment of the Independent
Committee and (II) appoint the Independent Committee and (ii) the Independent
Committee (a) has the corporate and other applicable power to authorize and
approve the Credit Documents to which the Parent is a party, the execution and
delivery by the Parent of such Credit Documents to which the Parent is a party,
and the performance by the Parent of its obligations thereunder and (b) has
unanimously determined that each of the transactions contemplated by the Credit
Documents is in the best interests of the Parent and its shareholders and
authorized and approved the Credit Documents to which the Parent is a party, the
execution and delivery by the Parent of such Credit Documents to which the
Parent is a party, and the performance by the Parent of its obligations
thereunder.

 

7.03         No Violation.  Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, will (i) contravene any material
provision of any applicable law, statute, rule or

 

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regulation or any applicable order, judgment, writ, injunction or decree of any
court or governmental instrumentality, (ii) conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the material properties or assets of the Parent or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which the Parent or any of its Subsidiaries is a
party or by which it or any of its material property or assets is bound or to
which it may be subject, or (iii) violate any provision of the Certificate of
Incorporation or By-Laws (or equivalent organizational documents) of the Parent
or any of its Subsidiaries.

 

7.04         Governmental Approvals.  No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made or in the case of any filings or
recordings in respect of the Security Documents (other than the Vessel
Mortgages), will be made within 10 days of the date such Security Document is
required to be executed pursuant hereto), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
by any Credit Party of any Document to which it is a party or (ii) the legality,
validity, binding effect or enforceability of any Document to which it is a
party.

 

7.05         Financial Statements; Financial Condition; Undisclosed
Liabilities.  (a) The audited consolidated balance sheets of the Parent as at
December 31, 2008, December 31, 2009 and December 31, 2010 and the related
consolidated statements of operations and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by, in the case of the
annual financial statements, an unqualified report from Deloitte & Touche LLP,
present fairly the consolidated financial condition of the Parent as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended.  All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein).  Neither the Parent nor any of its Subsidiaries has any
material guarantee obligations, contingent liabilities or liabilities for Taxes,
or any long-term leases or unusual forward or long-term commitments, including
any interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the financial
statements referred to in the preceding sentence (it being understood that with
respect to guarantee obligations, the underlying debt is so reflected).

 

(b)           Except as fully disclosed in the financial statements and the
notes related thereto delivered pursuant to Section 7.05(a), there are no
liabilities or obligations with respect to the Parent or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in the aggregate, would be
materially adverse to the Parent and its Subsidiaries taken as a whole.  None of
the Credit Parties knows of any basis for the assertion against it of any
material liability or obligation of any nature that is not fairly disclosed
(including, without limitation, as to the amount thereof) in the financial
statements and the notes related thereto delivered to the Lender.

 

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(c)           Since December 31, 2010, there have been no events, circumstances,
developments or other changes in facts that would, individually or in the
aggregate, or could reasonably be expected to have, a Material Adverse Effect on
the Parent and its Subsidiaries, taken as a whole.

 

(d)           The projections delivered by the Parent to the Lenders prior to
the Closing Date have been prepared in good faith and are based on GAAP and
reasonable assumptions, and there are no statements or conclusions in such
Projections which are based upon or include information known to the Parent on
the Closing Date to be misleading in any material respect or which fail to take
into account material information known to the Parent on the Closing Date
regarding the matters reported therein.  On the Closing Date, the Parent
believes that such projections are reasonable and attainable, it being
recognized by the Lenders, however, that projections as to future events are not
to be viewed as facts and that the actual results during the period or periods
covered by the projections may differ from the projected results included in
such projections, which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on the Parent and its Subsidiaries
taken as a whole.

 

7.06         Litigation.  There are no actions, suits, investigations (conducted
by any governmental or other regulatory body of competent jurisdiction) or
proceedings pending or, to the knowledge of the Parent, Arlington or the
Borrowers threatened against any Credit Party that could reasonably be expected
to have a Material Adverse Effect.

 

7.07         True and Complete Disclosure.  (a) All factual information, taken
individually or as a whole, furnished by or on behalf of the Parent, Arlington
or the Borrower, in writing to the Administrative Agent or any Lender
(including, without limitation, all information contained in the Documents and
any financial statement) for purposes of or in connection with this Agreement,
the other Credit Documents or any transaction contemplated herein or therein is,
and all other such factual information, taken individually or as a whole,
hereafter furnished by or on behalf of the Parent, Arlington or Borrower, in
writing to the Administrative Agent or any Lender will be, true and accurate in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein, in light of the circumstances when made, not misleading.  All
projections that are part of such information (including those set forth in any
projections delivered subsequent to the Closing Date) are based upon good faith
estimates and stated assumptions believed to be reasonable and fair as of the
date made in light of conditions and facts then known and, as of such date,
reflect good faith, reasonable and fair estimates of the information projected
for the periods set forth therein; it is recognized by each Lender and the
Administrative Agent that such projections and determinations provided by the
Parent or Borrower, although reflecting the Parent’s or Borrower’s good faith
projections and determinations, are not to be viewed as facts and that actual
results covered by any such determination may differ from the projected results.

 

(b)           The Parent has provided to each Lender a true and correct copy of
each agreement, document or other instrument or information (including a true,
correct and complete description of any event, circumstance or arrangement) that
would be required by Item 601 of Reg. S-K to be included as an exhibit to the
Parent’s Annual Report on Form 10-K for the year ended December 31, 2010 or that
would be required to be filed by the Parent on Form 8-K, in each case except as
included in the Filed SEC Documents (with respect to any such matters

 

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arising prior to the date of this Agreement) or in the SEC Documents filed after
the date hereof and no later than five (5) Business Days prior to the Closing
Date (with respect to any such matters arising after the date of this
Agreement), in each case including any and all amendments, supplements and
modifications thereto, regardless of whether any such amendments, supplements or
modifications would be required to be filed in any SEC Document.

 

7.08         Use of Proceeds; Margin Regulations.  (a) All proceeds of the Loans
may be used only to pay down the 2008 Credit Agreement in accordance with
Section 5.13, pay down the 2010 Credit Agreement in accordance with
Section 5.13, pay fees incurred in connection with the 2010 Credit Agreement and
an amount not to exceed the amount of the payment by the Borrower on April 26,
2011 under the 2008 Credit Agreement to be used for working capital purposes by
the Borrower and the Guarantors in light of the making of that payment from
working capital before the Closing Date.

 

(b)           No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.  Neither the making of any Loan nor the use of the
proceeds thereof will violate or be inconsistent with the Margin Regulations
except to purchase or carry or extend credit for the purpose of purchasing or
carrying such Margin Stock as may be permitted hereunder to be purchased or
carried.

 

7.09         Tax Returns and Payments.  The Parent and each of its Subsidiaries
has timely filed all U.S. federal income tax returns, statements, forms and
reports for taxes and all other material U.S. and non-U.S. tax returns,
statements, forms and reports for taxes required to be filed by or with respect
to the income, properties or operations of the Parent and/or any of its
Subsidiaries (the “Returns”).  The Returns accurately reflect in all material
respects all liability for taxes of the Parent and its Subsidiaries as a whole
for the periods covered thereby.  The Parent and each of its Subsidiaries have
at all times paid, or have provided adequate reserves (in accordance with GAAP)
for the payment of, all taxes shown as due on the Returns and all other material
U.S. federal, state and non-U.S. taxes payable by them.  All taxes required to
have been withheld or collected by the Parent or any of its Subsidiaries from
amounts paid or owing to any employee, shareholder, member, creditor or other
third party have been duly withheld or collected and have been paid over to the
applicable taxing authority.  There is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the Parent or
any of its Subsidiaries, threatened by any authority regarding any taxes
relating to the Parent or any of its Subsidiaries.  Neither the Parent nor any
of its Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of taxes of the Parent or any of its Subsidiaries,
or is aware of any circumstances that would cause the taxable years or other
taxable periods of the Parent or any of its Subsidiaries not to be subject to
the normally applicable statute of limitations.  Neither the Parent nor any of
its Subsidiaries (i) has engaged in any “listed transaction” within the meaning
of Section 6011 of the Code or (ii) has any actual or potential liability for
the taxes of any Person (other than the Parent or any of its present or former
Subsidiaries) under Treasury regulation Section 1.1502-6 (or any similar
provision of state, local, foreign or provincial law).

 

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7.10         Compliance with ERISA.  (a) Schedule VII sets forth, as of the
Closing Date, each Plan; with respect to each Plan, other than any Multiemployer
Plan (and each related trust, insurance contract or fund), there has been no
failure to be in substantial compliance with its terms and with all applicable
laws, including without limitation ERISA and the Code, that could reasonably be
expected to give rise to a Material Adverse Effect; each Plan, other than any
Multiemployer Plan (and each related trust, if any), which is intended to be
qualified under Section 401(a) of the Code has received a determination letter
(or an opinion letter) from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; to the best knowledge of the Parent or any of its
Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer Plan is
insolvent or in reorganization; no Plan has an Unfunded Current Liability in an
amount material to Borrower’s operation; no Plan (other than a Multiemployer
Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has
failed to satisfy minimum funding standards, or has applied for or received a
waiver of the minimum funding standards or an extension of any amortization
period, within the meaning of Section 412 or 430 of the Code or Section 302 or
303 of ERISA; with respect to each Plan (other than a Multiemployer Plan) its
actuary has certified that such Plan is not an at-risk plan within the meaning
of Section 430 of the Code or Section 303 of ERISA; all contributions required
to be made with respect to a Plan have been or will be timely made (except as
disclosed on Schedule VII); neither the Parent nor any of its Subsidiaries nor
any ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 436(f), 4971 or 4975 of the Code or expects to incur any such
liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to the Parent or any of its
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of
a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted by the PBGC to terminate or appoint a trustee
to administer any Plan (in the case of a Multiemployer Plan, to the best
knowledge of the Parent or any of its Subsidiaries or ERISA Affiliates) which is
subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, or, to
the best knowledge of the Parent or any of its Subsidiaries, expected or
threatened which could reasonably be expected to have a Material Adverse Effect;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the Parent and its Subsidiaries and ERISA
Affiliates would have no liabilities to any Plans which are Multiemployer Plans
in the event of a complete withdrawal therefrom in an amount which could
reasonably be expected to have a Material Adverse Effect; neither the Borrower
nor any of its Subsidiaries nor any ERISA Affiliate has received any notice that
a Plan which is a Multiemployer Plan is in endangered or critical status under
Section 305 of ERISA; each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees
or former employees of the Parent, any of its Subsidiaries, or any ERISA
Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of the Parent or any
of its Subsidiaries or any ERISA Affiliate exists nor has any event occurred
which could reasonably be expected to give rise to any such lien on account of
any Plan; and the Parent and its Subsidiaries do not maintain or contribute to
any employee welfare plan (as defined in Section 3(1) of ERISA) which

 

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provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan the obligations with respect to
which could reasonably be expected to have a Material Adverse Effect.

 

(b)           Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities.  All
contributions required to be made with respect to a Foreign Pension Plan have
been or will be timely made.  Neither the Parent nor any of its Subsidiaries has
incurred any obligation in connection with the termination of or withdrawal from
any Foreign Pension Plan that could reasonably be expected to have a Material
Adverse Effect.  Neither the Parent nor any of its Subsidiaries maintains or
contributes to any Foreign Pension Plan the obligations with respect to which
could in the aggregate reasonably be expected to have a Material Adverse Effect.

 

7.11         The Security Documents.  After the execution and delivery thereof
and upon the taking of the actions mentioned in the second immediately
succeeding sentence, each of the Security Documents creates in favor of the
Collateral Agent for the benefit of the Secured Creditors a legal, valid and
enforceable fully perfected security interest in and Lien on all right, title
and interest of the Credit Parties party thereto in the Collateral described
therein, subject to no other Liens except for Permitted Liens and subject to the
terms of the Intercreditor Agreements.  No filings or recordings are required in
order to perfect the security interests created under any Security Document
except for filings or recordings which shall have been made on or prior to the
tenth day after the Closing Date in the case of all Collateral.

 

7.12         Capitalization.

 

(a)           As of the Closing Date and after giving effect to the conditions
precedent related thereto (and except as otherwise contemplated by the proxy
statement currently on file with the SEC) the authorized capital stock of the
Parent shall consist of 140,000,000 shares of common stock and 10,000,000 shares
of preferred stock, par value $0.01 per share, of the Parent (“Preferred
Stock”).  As of the date hereof, 116,039,252 (after giving effect to the
transactions contemplated hereby) shares of common stock, and zero (0) shares of
Preferred Stock, shall be issued and outstanding.

 

(b)           Except as set forth in Schedule X, as of the date hereof, there
are (i) no other shares of capital stock or other Equity Interests or voting
securities of the Parent, (ii) no securities of the Parent convertible into or
exchangeable for capital stock or other Equity Interests or voting securities of
the Parent, (iii) no options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights or other similar contracts or commitments
that could require the Parent to issue, sell or otherwise cause to become
outstanding any of its Equity Interests and (iv) no stock appreciation, phantom
stock, profit participation or similar rights with respect to the Parent or any
repurchase, redemption or other obligation to acquire for value any capital
stock of the Parent.

 

(c)           All outstanding shares of the Parent’s capital stock are duly
authorized, validly issued, fully paid and nonassessable and (except as set
forth in Schedule IX) not subject

 

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to or issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under any
provision of the Business Corporations Act of the Republic of the Marshall
Islands 1990, the articles of incorporation of the Parent, the bylaws of the
Parent or any agreement to which the Parent is a party or otherwise bound.  None
of the shares of the capital stock of the Parent have been issued in violation
of any securities laws.  There are no accrued and unpaid dividends with respect
to any outstanding shares of capital stock of the Parent.

 

7.13         Subsidiaries.  The Parent has no Subsidiaries other than those
Subsidiaries listed on Schedule VIII (which Schedule identifies the correct
legal name, direct owner, percentage ownership and jurisdiction of organization
of each such Subsidiary on the date hereof).  All outstanding capital stock,
membership interests, partnership interests, units or other form of equity, of
each class outstanding, of each of the Subsidiaries listed on Schedule VIII has
been validly issued, is fully paid and non-assessable (to the extent applicable)
and, except in the case of the Parent, is owned beneficially and of record by a
Credit Party free and clear of all Liens other than the security interests
created by the Documents and the Senior Credit Facilities and Permitted Liens.

 

7.14         Compliance with Statutes, etc.  The Parent and each of its
Subsidiaries is in compliance in all material respects with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such non-compliances that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

7.15         Investment Company Act.  Neither the Parent, 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.

 

7.16         Solvency.  After giving effect to (a) the Loans, (b) the
consummation of each of the transactions contemplated herein and (c) the payment
and accrual of all transaction costs in connection with the foregoing, both the
Credit Parties taken as a whole, and Borrowers, Arlington and the Subsidiary
Guarantors together, are solvent.

 

7.17         Pollution and Other Regulations.  (a) Each of the Parent and its
Subsidiaries is in compliance in all material respects with all applicable
Environmental Laws governing its business, except for such failures to comply as
are not reasonably likely to have a Material Adverse Effect, and neither the
Parent nor any of its Subsidiaries is liable for any penalties, fines or
forfeitures for failure to comply with any of the foregoing except for such
penalties, fines or forfeitures that are not reasonably likely to have a
Material Adverse Effect.  All licenses, permits, registrations or approvals
required for the business of the Parent and each of its Subsidiaries, as
conducted as of the date hereof, under any Environmental Law have been secured
and the Parent and each of its Subsidiaries is in substantial compliance
therewith, except for such failures to secure or comply as are not reasonably
likely to have a Material Adverse Effect.  Neither the Parent nor any of its
Subsidiaries is in any respect in noncompliance with, breach of or default under
any applicable writ, order, judgment, injunction, or decree to which the Parent
or such Subsidiary is a party or which would affect the ability of the Parent or
such Subsidiary to operate

 

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any Vessel, Real Property or other facility and no event has occurred and is
continuing which, with the passage of time or the giving of notice or both,
would constitute noncompliance, breach of or default thereunder, except in each
case, such noncompliance, breaches or defaults as are not likely to,
individually or in the aggregate, have a Material Adverse Effect.  There are no
Environmental Claims pending or, to the knowledge of the Parent, Arlington or
the Borrowers, threatened, against the Parent or any of its Subsidiaries in
respect of which an unfavorable decision, ruling or finding would be reasonably
likely to have a Material Adverse Effect.  There are no facts, circumstances,
conditions or occurrences on any Vessel, Real Property or other facility owned
or operated by the Parent or any of its Subsidiaries that is reasonably likely
(i) to form the basis of an Environmental Claim against the Parent, any of its
Subsidiaries or any Vessel, Real Property or other facility owned by the Parent
or any of its Subsidiaries, or (ii) to cause such Vessel, Real Property or other
facility to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law, except in each such case, such
Environmental Claims or restrictions that individually or in the aggregate are
not reasonably likely to have a Material Adverse Effect.

 

(b)           Hazardous Materials have not, at any time prior to the date of
this Agreement or the Closing Date, been (i) generated, used, treated or stored
on, or transported to or from, any Vessel, Real Property or other facility at
any time owned or operated by the Parent or any of its Subsidiaries or
(ii) released on or from any such Vessel, Real Property or other facility, in
each case where such occurrence or event, either individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect.

 

7.18         Labor Relations.  Neither the Parent nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect and there is (i) no unfair labor practice complaint
pending against the Parent or any of its Subsidiaries or, to the Parent’s
knowledge, threatened against any of them before the National Labor Relations
Board, and no material grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Parent or
any of its Subsidiaries or, to the Parent’s knowledge, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Parent or any of its Subsidiaries or, to the Parent’s knowledge, threatened
against the Parent or any of its Subsidiaries and (iii) no union representation
proceeding pending with respect to the employees of the Parent or any of its
Subsidiaries, except (with respect to the matters specified in clauses (i),
(ii) and (iii) above) as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

7.19         Patents, Licenses, Franchises and Formulas.  The Parent and each of
its Subsidiaries owns or has the right to use, and has the right to enforce and
prevent any third party from using, all material patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, and
has obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others, except for such failures and conflicts which could
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

7.20         Indebtedness.  Schedule V sets forth a true and complete list of
all Indebtedness, other than Indebtedness under the Senior Debt Documents, of
the Parent and its

 

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Subsidiaries and which is to remain outstanding after the Closing Date (the
“Existing Indebtedness”), in each case showing the aggregate principal amount
thereof and the name of borrower and any other entity which directly or
indirectly guarantees such debt.

 

7.21         Insurance.  Schedule VI sets forth a true and complete listing of
all insurance maintained by each Credit Party on the Closing Date, with the
amounts insured (and any deductibles) set forth therein (the “Required
Insurance”).

 

7.22         Concerning the Vessels.  The name, registered owner (which shall be
a Subsidiary Guarantor), official number, and jurisdiction of registration and
flag (which shall be in an Acceptable Flag Jurisdiction) of each Mortgaged
Vessel is set forth on Schedule III.  Each Mortgaged Vessel is and will be
operated in compliance with all applicable law, rules and regulations, except
such noncompliance as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

7.23         Citizenship.  The Parent, Borrower and each other Credit Party
which owns or operates, or will own or operate, one or more Vessels is, or will
be, qualified to own and operate such Vessels under the laws of the Republic of
the Marshall Islands and the Republic of Liberia, as may be applicable, or such
other jurisdiction in which any such Vessels are permitted, or will be
permitted, to be flagged in accordance with the terms of the respective Vessel
Mortgages.

 

7.24         Mortgaged Vessel Classification; Flag.  Each Mortgaged Vessel is
(i) or will be, classified in the highest class available for Vessels of its age
and type with a classification society listed on Schedule X hereto or another
internationally recognized classification society acceptable to the Lenders,
free of any conditions or recommendations, other than as permitted, or will be
permitted, under the Vessel Mortgage and (ii) flagged in an Acceptable Flag
Jurisdiction.

 

7.25         No Immunity.  The Parent does not, nor does any other Credit Party
or any of their respective properties, have any right of immunity on the grounds
of sovereignty or otherwise from the jurisdiction of any court or from setoff or
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) under the laws
of any jurisdiction.  The execution and delivery of the Credit Documents by the
Credit Parties and the performance by them of their respective obligations
thereunder constitute commercial transactions.

 

7.26         Fees and Enforcement.  No fees or Taxes, including, without
limitation, stamp, transaction, registration or similar taxes, are required to
be paid to ensure the legality, validity, or enforceability of this Agreement or
any of the other Credit Documents other than recording taxes and, if applicable,
the payment of stamp tax in Singapore with respect of this Agreement which have
been, or will be, paid by the Parent or its Subsidiaries as and to the extent
due.  Under the laws of the Republic of the Marshall Islands, the United
Kingdom, the Bahamas, Bermuda, the Republic of Malta, the United States or the
Republic of Liberia (or any other Acceptable Flag Jurisdiction), as applicable,
the choice of the laws of the State of New York as set forth in the Credit
Documents which are stated to be governed by the laws of the State of New York
is a valid choice of law, and the irrevocable submission by each Credit Party to
jurisdiction and consent to service of process and, where necessary, appointment
by such Credit

 

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Party of an agent for service of process, in each case as set forth in such
Credit Documents, is legal, valid, binding and effective.

 

7.27         Form of Documentation.  As of March 29, 2011, the Investment
Agreement and the Side Letter, and, as of the Closing Date, the Credit Documents
and the Registration Rights Agreement, are in proper legal form under the laws
of the United States of America, the Bahamas, the Republic of Malta, the United
Kingdom, the Republic of the Marshall Islands, Britain, Bermuda or the Republic
of Liberia (or any other Acceptable Flag Jurisdiction), as applicable, for the
enforcement thereof under such laws, subject only to such matters which may
affect enforceability arising under the law of the State of New York.  To ensure
the legality, validity, enforceability or admissibility in evidence of each such
Credit Document in the United States of America, the Republic of the Marshall
Islands, the United Kingdom, the Bahamas, the Republic of Malta, the Republic of
Liberia or Bermuda (or any other Acceptable Flag Jurisdiction), as applicable,
it is not necessary that any Credit Document or any other document be filed or
recorded with any court or other authority in the United States of America, the
Bahamas, the Republic of Malta, the United Kingdom. the Republic of the Marshall
Islands, Bermuda or the Republic of Liberia (or any other Acceptable Flag
Jurisdiction), or notarized or executed under seal, or physically executed in
any such jurisdiction, except as have been made, or will be made, in accordance
with Section 5.

 

7.28         PATRIOT Act.  No Credit Party (and, to the knowledge of each Credit
Party, no joint venture or Subsidiary thereof) is in violation of any United
States law relating to terrorism, sanctions or money laundering, including the
United States Executive Order No. 13224 on Terrorist Financing and the PATRIOT
Act.

 

7.29         Certain Business Practices.  To the knowledge of the Parent,
neither the Parent nor any of its Subsidiaries (nor any of their respective
officers, directors or employees) (a) has made or agreed to make any
contribution, payment, gift or entertainment to, or accepted or received any
contributions, payments, gifts or entertainment from, any government official,
employee, political party or agent or any candidate for any federal, state,
local or foreign public office, where either the contribution, payment or gift
or the purpose thereof was illegal under the laws of any federal, state, local
or foreign jurisdiction; or (b) has engaged in or otherwise participated in,
assisted or facilitated any transaction that is prohibited by any applicable
embargo or related trade restriction imposed by the United States Office of
Foreign Assets Control or any other agency of the United States government.

 

7.30         Brokers and Other Advisors.  No broker, investment banker,
financial advisor or other person, other than Jefferies & Company and Allen &
Co., the fees and expenses of which will be paid by the Credit Parties, is
entitled to any broker’s, finder’s or financial advisor’s fee or commission in
connection with the transactions contemplated herein based upon arrangements
made by or on behalf of the Credit Parties.  Either of the Parent or Borrower
has provided each Lender with a true and correct schedule setting forth the
maximum aggregate fees (including the Parent’s or Borrower’s good faith estimate
of reimbursement for expenses) that may become payable to Jefferies & Company
and Allen & Co. pursuant to any engagement or fee letters between any Credit
Party and Jefferies & Company and Allen & Co. with respect to the transactions
contemplated herein.

 

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7.31         Money Laundering. (a)  To the extent applicable, each Credit Party
is in compliance, in all material respects, with the (i) Trading and Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and
any other enabling legislation or executive order relating thereto, and (ii) the
PATRIOT Act.  No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

 

(b)           None of the Credit Parties nor, to the best knowledge of the
Parent, Arlington and the Borrowers after due inquiry, any Affiliate of any
Credit Party, is, or will be after consummation of the Transaction and
application of the proceeds of the Loans, by reason of being a “national” of a
“designated foreign country” or a “specially designated national” within the
meaning of the Regulations of the Office of Foreign Assets Control, United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other
reason, in violation of, any United States Federal Statute or Presidential
Executive Order concerning trade or other relations with any foreign country or
any citizen or national thereof.

 

SECTION 8 - AFFIRMATIVE COVENANTS.  Each of the Parent, Arlington and Borrower
hereby covenants and agrees that on and after the Closing Date and until the
Loans, together with interest, and all other obligations incurred hereunder and
thereunder, are paid in full:

 

8.01         Information Covenants.  The Parent will furnish to the
Administrative Agent, with sufficient copies for each of the Lenders:

 

(a)           Quarterly Financial Statements.  Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the Parent,
(i) the consolidated balance sheets of the Parent and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated statements
of income and cash flows, in each case for such quarterly accounting period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, and in each case, setting forth comparative figures
for the related periods in the prior fiscal year, all of which shall be
certified by the senior financial officer of the Parent, subject to normal
year-end audit adjustments and (ii) management’s discussion and analysis of the
important operational and financial developments during the fiscal quarter and
year-to-date periods.

 

(b)           Annual Financial Statements.  Within 90 days after the close of
each fiscal year of the Parent, (i) the consolidated balance sheets of the
Parent and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal year
and certified by Deloitte & Touche LLP or such other independent certified
public accountants of recognized national standing reasonably acceptable to the
Required Lenders, together with a report of such accounting firm stating that in
the course of its regular audit of the financial statements of the Parent and
its Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge of any
Default or Event of Default pursuant to the Financial Covenants, inclusive,
which has occurred

 

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and is continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to the nature
thereof and (ii) management’s discussion and analysis of the important
operational and financial developments during such fiscal year.

 

(c)           Appraisal Reports.  Together with delivery of the financial
statements described in (x) Section 8.01(a) required in connection with the
second fiscal quarter of each fiscal year and (y) Section 8.01(b) for each
fiscal year, and at any other time within 33 days of the written request of the
Administrative Agent (acting at the written direction of the Required Lenders),
appraisal reports dated within 30 days prior to the date of delivery of such
compliance certificate or such request, as applicable, in form and substance
reasonably satisfactory to the Required Lenders and from two Approved
Appraisers, stating the then current Fair Market Value of each of the Mortgaged
Vessels.  All such appraisals shall be conducted by, and made at the expense of,
the Parent (it being understood that the Administrative Agent may and, at the
request of the Required Lenders, shall, upon notice to the Parent, obtain such
appraisals and that the cost of all such appraisals will be for the account of
the Parent); provided that, unless an Event of Default shall then be continuing,
in no event shall the Parent be required to pay for more than three appraisal
reports obtained pursuant to this Section 8.01(c) in any single fiscal year of
the Parent, with the cost of any such reports in excess thereof to be paid by
the Lenders on a pro rata basis.

 

(d)           Projections, Budget, etc.  As soon as available but not more than
45 days after the commencement of each fiscal year of the Parent beginning with
its fiscal year commencing on January 1, 2012, (i) a budget of the Parent and
its Subsidiaries in reasonable detail for each of the twelve months and four
fiscal quarters of such fiscal year and (ii) the Projections referred to in
Section 7.05(d) in reasonable detail for the subsequent three fiscal years
including the fiscal year in which such Projections are being delivered.  It is
recognized by each Lender and the Administrative Agent that such projections and
determinations provided by the Parent, although reflecting the Parent’s good
faith projections and determinations, are not to be viewed as facts and that
actual results covered by any such determination may differ from the projected
results.

 

(e)           Officer’s Compliance Certificates.  (i) At the time of the
delivery of the financial statements provided for in Sections 8.01(a) and (b), a
certificate of the senior financial officer of the Parent substantially in the
form of Exhibit M to the effect that, to the best of such officer’s knowledge,
no Default or Event of Default has occurred and is continuing or, if any Default
or Event of Default has occurred and is continuing, specifying the nature and
extent thereof (in reasonable detail), which certificate shall, (A) set forth
the calculations required to establish whether the Parent was in compliance with
the Financial Covenants, at the end of such fiscal quarter or year, as the case
may be and (B) certify that there have been no changes to any of Schedule VIII
and Annexes A through F of the Pledge Agreement or, if later, since the date of
the most recent certificate delivered pursuant to this Section 8.01(e)(i), or if
there have been any such changes, a list in reasonable detail of such changes
(but, in each case with respect to this clause (B), only to the extent that such
changes are required to be reported to the Collateral Agent pursuant to the
terms of such Security Documents) and whether the Parent and the other Credit
Parties have otherwise taken all actions required to be taken by them pursuant
to such Security Documents in connection with any such changes.

 

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(ii)           At the time of a Collateral Disposition or Vessel Exchange in
respect of any Mortgaged Vessel, a certificate of a senior financial officer of
the Parent which certificate shall (x) certify on behalf of the Parent the last
appraisal report received pursuant to Section 8.01(c) determining the Aggregate
Mortgaged Vessel Value after giving effect to such disposition or exchange, as
the case may be, and/or showing the individual Fair Market Value of all
Mortgaged Vessels owned by the Subsidiary Guarantors which have not been sold,
transferred, lost or otherwise disposed of at such time and (y) set forth the
calculations required to establish whether the Parent is in compliance with the
provisions of Section 9.09 after giving effect to such disposition or exchange,
as the case may be.

 

(f)            Notice of Default, Litigation or Event of Loss.  Promptly, and in
any event within three Business Days after the Parent obtains knowledge thereof,
notice of (i) the occurrence of any event which constitutes a Default or Event
of Default which notice shall specify the nature thereof, the period of
existence thereof and what action the Parent proposes to take with respect
thereto, (ii) any litigation or governmental investigation or proceeding pending
or threatened in writing against the Parent or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect or any Document and (iii) any Event of Loss in respect of any Mortgaged
Vessel.

 

(g)           Other Reports and Filings.  Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
the Parent or any of its Subsidiaries shall file with the SEC (or any successor
thereto) or deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).

 

(h)           Material Breach; Senior Debt Documents. Promptly upon, and in any
event within five Business Days after, without duplication of any other
reporting requirements herein, receipt of any notices of default, financial
reporting, collateral reporting and other material correspondence with the
holders of Indebtedness under the Senior Debt Documents, and copies of all
proposed and effectuated additions, amendments, restatements, supplements or
other modifications in respect of the Senior Debt Documents.

 

(i)            Environmental Matters.  Promptly upon, and in any event within
five Business Days after, the Parent obtains knowledge thereof, written notice
of any of the following environmental matters occurring after the date hereof,
except to the extent that such environmental matters could not, individually or
in the aggregate, be reasonably expected to have a Material Adverse Effect:

 

(i)            any Environmental Claim pending or threatened in writing against
the Parent or any of its Subsidiaries or any Mortgaged Vessel or property owned
or operated or occupied by the Parent or any of its Subsidiaries;

 

(ii)           any condition or occurrence on or arising from any Mortgaged
Vessel or property owned or operated or occupied by the Parent or any of its
Subsidiaries that (a) results in noncompliance by the Parent or such Subsidiary
with any applicable Environmental Law or (b) could reasonably be expected to
form the basis of an

 

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Environmental Claim against the Parent or any of its Subsidiaries or any such
Vessel or property;

 

(iii)          any condition or occurrence on any Mortgaged Vessel or property
owned or operated or occupied by the Parent or any of its Subsidiaries that
could reasonably be expected to cause such Mortgaged Vessel or property to be
subject to any restrictions on the ownership, occupancy, use or transferability
by the Parent or such Subsidiary of such Mortgaged Vessel or property under any
Environmental Law; and

 

(iv)          the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Mortgaged Vessel or
property owned or operated or occupied by the Parent or any of its Subsidiaries
as required by any Environmental Law or any governmental or other administrative
agency; provided that in any event the Parent shall deliver to the
Administrative Agent all material notices received by the Parent or any of its
Subsidiaries from any government or governmental agency under, or pursuant to,
CERCLA or OPA.

 

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Parent’s or such Subsidiary’s response thereto.  In addition, the Parent will
provide the Administrative Agent with copies of all material communications with
any government or governmental agency and all material communications with any
Person relating to any Environmental Claim of which notice is required to be
given pursuant to this Section 8.01(i), and such detailed reports of any such
Environmental Claim as may reasonably be requested by the Administrative Agent
or the Required Lenders.

 

(j)            Management Letters.  Promptly after Parent’s or any of its
Subsidiaries’ receipt thereof, a copy of any “management letter” received from
its certified public accountants and management’s response thereto.

 

(k)           Cash Flow Projections.  On the first Business Day of each calendar
month after the Closing Date to and including the later of (x) the later of
(1) the reduction of the amortization shortfall amount under the 2008 Credit
Agreement to zero and (2) the second anniversary of the Closing Date and (y) the
date on which the Total Leverage Ratio shall be no greater than .60 to 1.00 for
the most recently added Test Period for which financial statements are due under
Section 8.01(a) or (b), cash flow projections for the Parent and its
Subsidiaries (the “Cash Flow Projection”) for the 13-week period beginning on
the Business Day on which such Cash Flow Projections are due, which Cash Flow
Projections shall (i) be based on information available, and projections made,
as of the last Business Day of the immediately preceding calendar month and
(ii) include a variance report describing in reasonable detail the
variance(s) in actual cash flow from projected cash flow for the month ended on
such Business Day.

 

(l)            Other Information.  From time to time, such other information or
documents (financial or otherwise) with respect to the Parent or its
Subsidiaries as the Administrative Agent or the Required Lenders may reasonably
request in writing.

 

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8.02         Books, Records and Inspections.  The Parent will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries, in conformity in all material respects with GAAP
and all requirements of law, shall be made of all dealings and transactions in
relation to its business.  The Parent will, and will cause each of its
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent and the Lenders as a group to visit and inspect, during
regular business hours and under guidance of officers of the Parent or any of
its Subsidiaries, any of the properties of the Parent or its Subsidiaries, and
to examine the books of account of the Parent or such Subsidiaries and discuss
the affairs, finances and accounts of the Parent or such Subsidiaries with, and
be advised as to the same by, its and their officers and, in the presence of the
Parent, independent accountants, all upon reasonable advance notice and at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may request; provided that, unless
an Event of Default exists and is continuing at such time, the Administrative
Agent and the Lenders shall not be entitled to request more than two such
visitations and/or examinations in any fiscal year of the Parent.

 

8.03         Maintenance of Property; Insurance.  The Parent will, and will
cause Borrower, Arlington and each Subsidiary Guarantor to, (i) keep all
material property necessary in its business in good working order and condition
(ordinary wear and tear and loss or damage by casualty or condemnation
excepted), (ii) maintain insurance on the Mortgaged Vessels in at least such
amounts and against at least such risks as are in accordance with (a) normal
industry practice for similarly situated insureds and (b) the requirements set
forth in Section 8.06 and (iii) furnish to the Administrative Agent, at the
written request of the Administrative Agent or any Lender, a complete
description of the material terms of insurance carried.  In addition to the
requirements of the immediately preceding sentence, the Parent will at all times
cause the Required Insurance to (x) be maintained on the Mortgaged Vessels (with
the same scope of coverage as that described in Schedule VI) at levels which are
at least as great as the respective amount described on Schedule VI or
(y) comply with the insurance requirements of the Vessel Mortgages.

 

8.04         Corporate Franchises.  The Parent will, and will cause Borrower,
Arlington and each Subsidiary Guarantor to do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents (if any) used in its business
except any which could not reasonably be expected to have a Material Adverse
Effect; provided, however, that nothing in this Section 8.04 shall prevent
(i) sales or other dispositions of assets, consolidations or mergers by or
involving the Parent or any of its Subsidiaries which are permitted in
accordance with Section 9.02, (ii) Arlington or any Subsidiary Guarantor from
changing the jurisdiction of its organization to the extent permitted by
Section 9.12.

 

8.05         Compliance with Statutes, etc.  The Parent will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions (including all laws and
regulations relating to money laundering) imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such non-compliances as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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8.06         Compliance with Environmental Laws.  (a) The Parent will, and will
cause Arlington, Borrower and each Subsidiary Guarantor to, comply in all
material respects with all Environmental Laws applicable to the ownership or use
of any Mortgaged Vessel or property now or hereafter owned or operated by the
Parent or Borrower, Arlington or any Subsidiary Guarantor, will within a
reasonable time period pay or cause to be paid all costs and expenses incurred
in connection with such compliance (except to the extent being contested in good
faith), and will keep or cause to be kept all such Mortgaged Vessels or property
free and clear of any Liens imposed pursuant to such Environmental Laws, in each
of the foregoing cases, except to the extent any failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Neither the Parent, Borrower, Arlington nor any Subsidiary
Guarantor will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous Materials
on any Mortgaged Vessel or property now or hereafter owned or operated or
occupied by the Parent, Borrower, Arlington or any Subsidiary Guarantor, or
transport or permit the transportation of Hazardous Materials to or from any
ports or property except in material compliance with all applicable
Environmental Laws and as reasonably required by the trade in connection with
the operation, use and maintenance of any such property or otherwise in
connection with their businesses or except to the extent the same could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  The Parent will, and will cause Borrower, Arlington and each
Subsidiary Guarantor, to maintain insurance on the Mortgaged Vessels in at least
such amounts as are in accordance with normal industry practice for similarly
situated insureds, against losses from oil spills and other environmental
pollution.

 

(b)           At the written request of the Required Lenders, which request
shall specify in reasonable detail the basis therefor, at any time and from time
to time, the Parent or the Borrower will provide, at Borrower’s sole cost and
expense, an environmental assessment of any Mortgaged Vessel by such Mortgaged
Vessel’s classification society (to the extent such classification society is
listed on Schedule X hereto) or another internationally recognized
classification society acceptable to the Required Lenders.  If said
classification society, in its assessment, indicates that such Mortgaged Vessel
is not in compliance with the Environmental Laws, said society shall set forth
potential costs of the remediation of such non-compliance; provided that such
request may be made only if (i) there has occurred and is continuing an Event of
Default, (ii) the Required Lenders reasonably and in good faith believe that the
Parent, Borrower, Arlington or any Subsidiary Guarantor or any such Mortgaged
Vessel is not in compliance with Environmental Law and such non-compliance could
reasonably be expected to have a Material Adverse Effect, or (iii) circumstances
exist that reasonably could be expected to form the basis of a material
Environmental Claim against the Parent, Borrower, Arlington or any Subsidiary
Guarantor or any such Mortgaged Vessel.  If the Parent or the Borrower fails to
provide the same within 90 days after such request was made, the Administrative
Agent may order the same and the Parent shall grant and hereby grants to the
Administrative Agent and the Lenders and their agents access to such Mortgaged
Vessel and specifically grants the Administrative Agent and the Lenders an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Parent or the Borrower’s expense.

 

8.07         ERISA.  As soon as reasonably possible and, in any event, within
ten (10) days after the Parent or any of its Subsidiaries or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Parent will deliver to the Administrative

 

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Agent, with sufficient copies for each of the Lenders, a certificate of the
senior financial officer of the Parent setting forth the full details as to such
occurrence and the action, if any, that the Parent, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Parent, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto:  that a Reportable Event has occurred
(except to the extent that the Parent has previously delivered to the
Administrative Agent a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that a failure to satisfy minimum funding requirements, within the meaning
of Section 412 of the Code or Section 302 of ERISA, has occurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 or 430 of the Code or Section 302
or 303 of ERISA with respect to a Plan; that the actuary of a Plan (other than a
Multiemployer Plan) has or will certify that the Plan is an at-risk plan within
the meaning of Section 430 of the Code or Section 303 of ERISA; that a Plan
which is a Multiemployer Plan is in endangered or critical status under
Section 305 of ERISA; that any contribution required to be made with respect to
a Plan or Foreign Pension Plan has not been timely made and such failure could
result in a material liability for the Parent or any of its Subsidiaries; that a
Plan has been or may be reasonably expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA with a material amount
of unfunded benefit liabilities; that a Plan (in the case of a Multiemployer
Plan, to the best knowledge of the Parent or any of its Subsidiaries or ERISA
Affiliates) has a material Unfunded Current Liability; that proceedings may be
reasonably expected to be or have been instituted by the PBGC to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a material delinquent contribution to a Plan; that the Parent, any of
its Subsidiaries or any ERISA Affiliate will or may reasonably expect to incur
any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 436(f), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that the Parent, or any of its Subsidiaries may
incur any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
Plan or any Foreign Pension Plan.  Upon request, the Parent will deliver to the
Administrative Agent with sufficient copies to the Lenders (i) a complete copy
of the annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA.  In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence hereof, copies

 

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of annual reports and any records, documents or other information required to be
furnished to the PBGC, and any notices received by the Parent, any of its
Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign Pension
Plan with respect to any circumstances or event that could reasonably be
expected to result in a material liability shall be delivered to the Lenders no
later than ten (10) days after the date such annual report has been filed with
the Internal Revenue Service or such records, documents and/or information has
been furnished to the PBGC or such notice has been received by the Parent, such
Subsidiary or such ERISA Affiliate, as applicable.

 

8.08         End of Fiscal Years; Fiscal Quarters.  The Parent shall cause
(i) each of its, and each of its Subsidiaries’, fiscal years to end on
December 31 of each year and (ii) each of its and its Subsidiaries’ fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.

 

8.09         Performance of Obligations.  The Parent will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument (including,
without limitation, the Documents) by which it is bound, except to the extent
waived by the parties thereto and except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

8.10         Payment of Taxes.  The Parent will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all material Taxes imposed
upon it or upon its income or profits, or upon any properties belonging to it,
prior to the date on which penalties attach thereto, and all lawful claims for
sums that have become due and payable which, if unpaid, might become a Lien not
otherwise permitted under Section 9.01(a), provided that neither the Parent nor
any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.

 

8.11         Intentionally Omitted.

 

8.12         Further Assurances.  (a) The Parent will, and will cause each of
its Subsidiaries to, cause each Collateral and Guaranty Requirement to be
satisfied at all times.

 

(b)           The Parent, Borrower, and each other Credit Party, each agree that
at any time and from time to time, at the expense of the Parent or such other
Credit Party, it will promptly execute and deliver all further instruments and
documents, and take all further action that may be reasonably necessary, or that
the Administrative Agent or the Lenders may reasonably require, to perfect and
protect any Lien granted or purported to be granted hereby or by the other
Credit Documents, or to enable the Collateral Agent to exercise and enforce its
rights and remedies with respect to any Collateral.  Without limiting the
generality of the foregoing, the Parent will, and will cause each Credit Party
to, execute and file, or cause to be filed, such financing or continuation
statements under the UCC (or any non-U.S. equivalent thereto), or amendments
thereto, such amendments or supplements to the Vessel Mortgages (including any
amendments required to maintain Liens granted by such Vessel Mortgages pursuant
to the effectiveness of this Agreement), and such other instruments or notices,
as may be reasonably necessary, or that the Administrative Agent or the Lenders
may reasonably

 

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require, to protect and preserve the Liens granted or purported to be granted
hereby and by the other Credit Documents (including, without limitation, the
consent of the Bermuda Monetary Authority for the grant of a charge over shares
of any Bermuda registered Subsidiary Guarantor if at any time the Administrative
Agent and/or Collateral Agent resigns and is replaced by another Administrative
Agent and/or Collateral Agent (“Replacement Agent”) and the Bermuda Monetary
Authority requires such consent in connection with the engagement of the
Replacement Agent; provided that, such consent shall be received prior to the
Administrative Agent and/or Collateral Agent resigning and being replaced by the
Replacement Agent).

 

(c)           Each Credit Party hereby authorize the Collateral Agent to file
one or more financing or continuation statements under the UCC (or any non-U.S.
equivalent thereto), and amendments thereto, relative to all or any part of the
Collateral without the signature of the Parent or any other Credit Party, where
permitted by law.  The Collateral Agent will promptly send the Parent and
Borrower a copy of any financing or continuation statements which it may file
without the signature of the Parent, Borrower or any other Credit Party and the
filing or recordation information with respect thereto.

 

(d)           If at any time any Subsidiary of the Parent owns a Mortgaged
Vessel or owns, directly or indirectly, an interest in any Subsidiary which owns
a Mortgaged Vessel and such Subsidiary has not otherwise satisfied the
Collateral and Guaranty Requirements, the Parent will cause such Subsidiary (and
any Subsidiary which directly or indirectly owns the Equity Interests of such
Subsidiary to the extent not a Credit Party) to satisfy the Collateral and
Guaranty Requirements with respect to each relevant Mortgaged Vessel as such
Subsidiary would have been required to satisfy pursuant to Sections 5 of this
Agreement had such Subsidiary been a Credit Party on the Closing Date.

 

8.13         Deposit of Earnings.  Each Credit Party shall cause the earnings
derived from each of the respective Mortgaged Vessels, to the extent
constituting Earnings and Insurance Collateral, to be deposited by the
respective account debtor in respect of such earnings into one or more of the
Concentration Accounts maintained for such Credit Party from time to time. 
Without limiting any Credit Party’s obligations in respect of this Section 8.13,
each Credit Party agrees that, in the event it receives any earnings
constituting Earnings and Insurance Collateral, or any such earnings are
deposited other than in one of the Concentration Accounts, it shall promptly
deposit all such proceeds into one of the Concentration Accounts maintained for
such Credit Party from time to time.

 

8.14         Ownership of Subsidiaries.  (a) Other than “director qualifying
shares”, the Parent shall at all times directly or indirectly own 100% of the
Equity Interests of Borrowers, Arlington and each of the Subsidiary Guarantors.

 

(b)           The Parent shall cause each Subsidiary Guarantor to at all times
be directly owned by one or more Credit Parties, subject to Section 9.02.

 

(c)           The Parent will cause each Mortgaged Vessel to be owned at all
times by a single Subsidiary Guarantor that owns no other Mortgaged Vessels.

 

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8.15               Flag of Mortgaged Vessels; Citizenship; Mortgaged Vessel
Classifications.  (a)  The Parent shall, and shall cause each Subsidiary
Guarantor which owns a Mortgaged Vessel, to cause each Mortgaged Vessel to be
registered under the laws and flag of (t) the Bahamas, (u) the Republic of
Malta, (v) the Republic of Liberia, (w) the Republic of the Marshall Islands,
(x) Bermuda, (y) the United Kingdom or (z) such other jurisdiction as is
acceptable to the Collateral Agent and Required Lenders (each jurisdiction in
clauses (t) through and including (z), an “Acceptable Flag Jurisdiction”). 
Notwithstanding the foregoing, any Credit Party may transfer a Mortgaged Vessel
to another Acceptable Flag Jurisdiction pursuant to a Flag Jurisdiction
Transfer.

 

(b)           The Parent will, and will cause each Subsidiary Guarantor which
owns or operates a Mortgaged Vessel to, cause each Mortgaged Vessel to be
classified in the highest class available for Vessels of its age and type with a
classification society listed on Schedule X or another internationally
recognized classification society acceptable to the Required Lenders, free of
any material conditions or recommendations.

 

8.16         Guarantees; Additional Collateral.  The Parent will cause each of
its Subsidiaries that guarantees the Senior Credit Facilities and each of its
Subsidiaries that is a “Restricted Subsidiary” under and as defined in the
Senior Unsecured Note Indenture to guarantee the Obligations, provided that such
guarantees may be delivered within 90 days of the date that such Restricted
Subsidiary is required to be a guarantor of the Senior Unsecured Note Indenture
and, provided further that, no “Restricted Subsidiary” under and as defined in
the Senior Unsecured Note Indenture that owns assets in an amount less than
$20,000 shall be required to become a Subsidiary Guarantor hereunder.  The
Parent will, and will cause each of its Subsidiaries, to grant Liens on
unencumbered assets in favor of the Collateral Agent for the benefit of the
Lenders if Parent and such Subsidiaries grant Liens on such unencumbered assets
in favor of the agents and lenders under the Senior Credit Facilities.

 

8.17         Lenders Meetings.  The Credit Parties will, upon the request of
Required Lenders, participate in a meeting of Lenders once during each Fiscal
Year to be held at Parent’s corporate offices (or at such other location
(including telephonically) as may be agreed to by Parent and Required Lenders)
at such time as may be agreed to by Parent and Required Lenders; provided that
no Credit Party shall be obligated to reimburse any expenses of any Lender
relating to such Lender’s attendance of such meeting.

 

8.18         Consent of the Bermuda Monetary Authority.  Within 60 days from the
Closing Date, the relevant Credit Party shall have received the consent of the
Bermuda Monetary Authority for the grant of a charge over shares of any Bermuda
registered Subsidiary Guarantor.

 

SECTION 9 - NEGATIVE COVENANTS.  Each of the Parent and Borrower hereby
covenants and agrees that on and after the Closing Date and until the Loans,
together with interest, and all other obligations (other than contingent
obligations) incurred hereunder or thereunder, are paid in full:

 

9.01         Liens.  The Parent and Borrower will not, and will not permit any
of their Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any Collateral, whether now owned or hereafter acquired, or
sell any such Collateral subject to an

 

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understanding or agreement, contingent or otherwise, to repurchase such
Collateral (including sales of accounts receivable with recourse to the Parent
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
“Permitted Liens”):

 

(a)           inchoate Liens for Taxes not yet due and payable or Liens for
Taxes being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP;

 

(b)           Liens imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar
Liens arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the Collateral and do not
materially impair the use thereof in the operation of the business of the Parent
or such Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale of the
Collateral subject to any such Lien;

 

(c)           Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule IV, without giving effect to any
renewals or extensions of such Liens, provided that the aggregate principal
amount of the Indebtedness, if any, secured by such Liens does not increase from
that amount outstanding on the Closing Date, less any repayments of principal
thereof;

 

(d)           Permitted Encumbrances;

 

(e)           Liens created pursuant to the Security Documents;

 

(f)            Liens arising out of judgments, awards, decrees or attachments
with respect to which the Parent or any of its Subsidiaries shall in good faith
be prosecuting an appeal or proceedings for review, provided that the aggregate
amount of all such judgments, awards, decrees or attachments shall not
constitute an Event of Default under Section 10.09;

 

(g)           Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security, Liens
to secure the performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases,
government contracts, trade contracts, performance and return of money bonds and
other similar obligations in each case incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money) and Liens
arising by virtue of deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers; provided that the aggregate value
of all cash and property at any time encumbered pursuant to this clause
(g) shall not exceed $5,000,000;

 

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(h)           Liens in respect of seamen’s wages which are not past due and
other maritime Liens for amounts not past due arising in the ordinary course of
business and not yet required to be removed or discharged under the terms of the
respective Vessel Mortgages;

 

(i)            Liens securing the Senior Credit Facilities and subject to the
Intercreditor Agreements; and

 

(j)            Liens securing Interest Rate Protection Agreements or Other
Hedging Agreement, in each case, entered into in the ordinary course of business
and consistent with past practices.

 

In connection with the granting of Liens described above in this Section 9.01 by
the Parent or any of its Subsidiaries, the Administrative Agent and the
Collateral Agent shall be authorized to take any actions requested by the
Borrowers in connection therewith (including, without limitation, by executing
appropriate lien subordination agreements in favor of the holder or holders of
such Liens, in respect of the item or items of equipment or other assets subject
to such Liens) without the consent of any Lender.

 

9.02         Consolidation, Merger, Sale of Assets, etc.  The Parent, Arlington
and Borrower will not, and will not permit any of their Subsidiaries to wind up,
liquidate or dissolve its affairs or enter into any transaction of merger,
consolidation or amalgamation, or convey, sell, lease or otherwise dispose of
(or agree to do any of the foregoing at any future time) all or substantially
all of its assets or any of the Collateral, or enter into any sale-leaseback
transactions involving any of the Collateral (or agree to do so at any future
time), except that:

 

(a)           the Parent, Arlington, Borrower and each of their Subsidiaries may
sell, lease or otherwise dispose of any Mortgaged Vessels, provided that, unless
otherwise consented to by the Required Lenders, (x)(A) such sale is made at Fair
Market Value (as determined in accordance with the appraisal report most
recently delivered to the Administrative Agent and the Lenders (or obtained by
the Administrative Agent or the Lenders) pursuant to Section 8.01(c) or
delivered at the time of such sale to the Administrative Agent by the Parent),
(B) 100% of the consideration in respect of such sale shall consist of cash or
Cash Equivalents (unless the Mortgaged Vessel is being sold to the Parent or a
Subsidiary of the Parent, in which case the sale shall consist of cash only)
received by Borrower or the Subsidiary Guarantor which owned such Mortgaged
Vessel, on the date of consummation of such sale, lease or other disposition,
(C) the Net Cash Proceeds of such sale, lease or other disposition shall be
applied as required by Section 4.02, or (y) so long as no Default or Event of
Default has occurred and is continuing (or would arise after giving effect
thereto) and so long as all representations and warranties made by the Parent
and Borrower pursuant to Section 7 of this Agreement are true and correct both
before and after any such exchange, such Mortgaged Vessel is exchanged for an
Acceptable Replacement Vessel pursuant to a Vessel Exchange; provided, further,
that in the case of both clauses (x) and (y) above, the Parent shall have
delivered to the Administrative Agent (I) an officer’s certificate, certified by
the senior financial officer of the Parent, demonstrating on pro forma
compliance (giving effect to such Collateral Disposition and, in the case of
calculations involving the appraised value of Mortgaged Vessels, using
valuations consistent with the appraisal report most recently delivered to the
Administrative Agent (or obtained by the Administrative Agent) pursuant to
Section 8.01(c)) compliance with each of the Financial

 

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Covenants for which financial statements under Section 8.01(a) or 8.01(b) are
due, for the most recently ended Test Period, provided that, with respect to any
Test Period ending on December 31, the Parent shall deliver unaudited financial
statements as at the end of such Test Period at the time of such sale but only
if such sale occurs more than 45 days (and less than 90 days) after the end of
such Test Period (or at the time of such sale, as applicable) setting forth the
calculations required to make such determination in reasonable detail and
(II) at least five Business Days (or such other period as shall be agreed by the
Parent and the Required Lenders) prior written notice of the proposed sale,
lease or other disposition of a Mortgaged Vessel, which notice shall set forth
the expected closing date of such sale, lease or other disposition and the date
of the corresponding repayment of Loans and/or reduction of Commitments;

 

(b)           the Parent and its Subsidiaries may sell or discount, in each case
without recourse and in the ordinary course of business, overdue accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof consistent with customary industry
practice (and not as part of any bulk sale);

 

(c)           (x) Borrower, Arlington and any Subsidiary Guarantor may transfer
assets or lease to or acquire or lease assets from Borrower, Arlington or any
other Subsidiary Guarantor, or any Subsidiary Guarantor may be merged into
Borrower, Arlington or any other Subsidiary Guarantor,  provided that Borrower,
Arlington or such Subsidiary Guarantor, as the case may be, will be a successor
in interest to all rights, titles and interest of such merged Subsidiary
Guarantor and, in each case so long as all actions necessary or desirable to
preserve, protect and maintain the security interest and Lien of the Collateral
Agent in any Collateral held by any Person involved in any such transaction are
taken to the satisfaction of the Collateral Agent and (y) any other Subsidiary
of the Parent may transfer assets or lease to or acquire or lease assets from
any other Subsidiary of the Parent, or any other Subsidiary of the Parent (other
than the Borrowers, Arlington and any Subsidiary Guarantor) may be merged into
any other Subsidiary of the Parent, in each case so long as all actions
necessary or desirable to preserve, protect and maintain the security interest
and Lien of the Collateral Agent in any Collateral held by any Person involved
in any such transaction are taken; and

 

(d)           following a Collateral Disposition permitted by this Agreement,
the Subsidiary Guarantor which owned the Mortgaged Vessel that is the subject of
such Collateral Disposition may dissolve, provided, that (x) all Net Cash
Proceeds from such Collateral Disposition shall have been applied to pay
outstanding principal amounts under the applicable Senior Credit Facility and
thereafter as required in Section 4.02 of this Agreement, (y) all of the
proceeds of such dissolution shall be paid only to a Credit Party and (z) no
Default or Event of Default is continuing unremedied at the time of such
dissolution.

 

To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, such Collateral shall be sold free and clear of
the Liens created by the Security Documents, and the Administrative Agent and
Collateral Agent shall be authorized to take any actions deemed appropriate in
order to effect the foregoing; provided that if such Collateral is sold to the
Parent or a Subsidiary of the Parent, the Liens created by the Security
Documents shall not be released unless both (x) such sale is in accordance with
Section 9.02 and (y) the Liens on such Collateral created by the Senior Credit
Facilities Documents are released.  Notwithstanding anything to the

 

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contrary contained above, the foregoing covenant shall not be violated as a
result of sales of Margin Stock for cash at fair market value (as determined in
good faith by Parent at the time of the respective sale).

 

9.03         Shareholder Payments.  The Parent shall not, and shall not permit
any of its Subsidiaries to, authorize, declare or pay any Shareholder Payments
with respect to the Parent or any of its Subsidiaries, except that:

 

(a)           (x) any Wholly-Owned Subsidiary of the Parent may pay Dividends to
the Parent or any Wholly-Owned Subsidiary of the Parent, (y) any Subsidiary
Guarantor may pay Dividends to the Borrower or any Subsidiary Guarantor and
(z) if the respective Subsidiary is not a Wholly-Owned Subsidiary of the Parent,
such Subsidiary may pay Dividends to its shareholders generally so long as the
Parent and/or its respective Subsidiaries which own Equity Interests in the
Subsidiary paying such Dividends receive at least their proportionate share
thereof (based upon their relative holdings of the Equity Interests in the
Subsidiary paying such cash Dividends and taking into account the relative
preferences, if any, of the various classes of Equity Interests of such
Subsidiary);

 

(b)           so long as no Default or Event of Default (both before and after
giving effect to the payment thereof) has occurred and is continuing, the Parent
may repurchase its outstanding Equity Interests (or options to purchase such
equity) theretofore held by its or any of its Subsidiaries’ employees, officers
or directors following the death, disability, retirement or termination of
employment of employees, officers or directors of the Parent or any of its
Subsidiaries, provided that the aggregate amount expended to so repurchase
equity of the Parent shall not exceed $2,000,000 in any fiscal year of the
Parent; and

 

(c)           after the later of (x) the reduction of the amortization shortfall
amount under the 2008 Credit Agreement to zero and (y) the second anniversary of
the Closing Date, the Parent may make Shareholder Payments provided that for
Dividends paid pursuant to this clause (c):

 

(i)            no Default or Event of Default has occurred and is continuing (or
would arise after giving effect thereto) at the time of declaration of such
Dividends;

 

(ii)           no Significant Default has occurred and is continuing (or would
arise after giving effect thereto) at the time of payment of such Dividends;

 

(iii)          if dividends, such Dividends in respect of a fiscal quarter shall
only be paid, and if a share repurchase, such repurchase in respect of a fiscal
quarter shall only be made, in each case, after the date of delivery of
quarterly or annual financial statements for such fiscal quarter, pursuant to
Sections 8.01(a) and 8.02(b), as the case may be, and on or prior to 45 days
after the immediately succeeding fiscal quarter;

 

(iv)          the aggregate amount of cash Dividends paid after the later of
(x) the reduction of the amortization shortfall amount under the 2008 Credit
Agreement to zero and (y) the second anniversary of the Closing Date does not
exceed 50% of the Parent’s Consolidated Net Income for the period (taken as one
accounting period) commencing on July 1, 2013 and ending on the last day of the
last fiscal quarter for which financial

 

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statements have been provided to the Lenders pursuant to Section 8.01(a) or
8.01(b) plus the Available Equity Proceeds Amount; less the aggregate amount of
Investments made pursuant to Section 9.05(k) since the later of (x) the
reduction of the amortization shortfall amount under the 2008 Credit Agreement
to zero and (y) the second anniversary of the Closing Date;

 

(v)           the Total Leverage Ratio on a pro forma basis after giving effect
to the payment of such Dividend should be no greater than 0.60 : 1.00 for the
most recently ended Test Period for which financial statements are due under
Section 8.01(a) or 8.01(b); and

 

(vi)          on or prior to the payment of such Dividends, the Parent shall
deliver to the Administrative Agent an officer’s certificate signed by the chief
financial officer of the Parent, certifying that the requirements set forth in
clauses (i) through (v) are satisfied.

 

For the avoidance of doubt, nothing herein shall prohibit the Parent from
issuing or distributing to its shareholders rights to acquire common stock or
Qualified Preferred Stock or redeeming any such rights.

 

9.04         Indebtedness.  The Parent and Borrower will not, and will not
permit any of their Subsidiaries to, contract, create, incur, assume or suffer
to exist any Indebtedness (other than Indebtedness incurred pursuant to (i) this
Agreement and the other Credit Documents, (ii) the 2010 Credit Agreement and the
Senior Credit Facilities Documents related thereto, in an aggregate principal
amount not to exceed $328,210,250 minus Principal Reduction thereunder incurred
after the Closing Date at any time outstanding, (iii) the 2008 Credit Agreement
and the Senior Credit Facilities Documents related thereto, in an aggregate
principal amount not to exceed $550,000,000 minus Principal Reduction thereunder
incurred after the Closing Date at any time outstanding, (iv) the Senior
Unsecured Notes in an amount not to exceed $300,000,000 at any time outstanding
less any repayment, redemption or repurchase thereof, (v) Interest Rate
Protection Agreements or Other Hedging Agreements entered into in the ordinary
course of business and consistent with past practices, (vi) intercompany
indebtedness permitted pursuant to Section 9.05(c), (g) and (h) and
(vii) additional Indebtedness issued under the Senior Credit Facilities in an
aggregate principal amount not to exceed the Permitted Amount, which
Indebtedness may be senior in priority to Indebtedness incurred under the Senior
Credit Facilities, provided that, prior to incurring Indebtedness pursuant to
this sub-paragraph 9.04(vii), (a) the Parent must give the Administrative Agent
and the Lenders 10 Business Days written notice, (b) the Borrower will enter
into an intercreditor agreement in conjunction with such Indebtedness on terms
reasonably satisfactory to the Lenders or such Indebtedness shall be governed by
the Intercreditor Agreement or the Secondary Intercreditor Agreement, (c) the
terms of such Indebtedness would be substantially similar to the 2008 Credit
Agreement as is permitted to be amended by the Intercreditor Agreements) which
would cause any Default or Event of Default, either on a pro forma basis for the
most recently ended Test Period for which financial statements are due under
8.01(a) or 8.01(b) and the Credit Parties shall be in compliance with the
Financial Covenants, provided that, with respect to any Test Period ending on
December 31, the Parent shall deliver unaudited financial statements as at the
end of such Test Period at the time of such incurrence but only if such
incurrence occurs more than 45 days (and less than 90 days)

 

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after the end of such Test Period (or at the time of such incurrence, as
applicable), or on a projected basis for the one year period following such
incurrence, with each of the covenants set forth in Sections 9.07 through 9.09,
inclusive; provided further that in the event any Indebtedness to be incurred by
the Parent or any of its Subsidiaries in a single issuance or transaction or
series of related issuances or transactions will exceed $10,000,000, the Parent
shall have delivered to the Administrative Agent an officer’s certificate,
certified by the senior financial officer of the Parent, demonstrating
compliance with the preceding provisions of this Section 9.04 and setting forth
the calculations required to make such determination in reasonable detail for
the most recently ended Test Period for which financial statements are due under
8.01(a) or 8.01(b), provided further that, with respect to any Test Period
ending on December 31, the Parent shall deliver unaudited financial statements
as at the end of such Test Period at the time of such incurrence but only if
such incurrence occurs more than 45 days (and less than 90 days) after the end
of such Test Period.

 

9.05         Advances, Investments and Loans.  The Parent and Borrower will not,
and will not permit any of their Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
Margin Stock (or other Equity Interests) (other than Parent Stock to the extent
permitted by Section 9.03), or make any capital contribution to any other Person
(each of the foregoing an “Investment” and, collectively, “Investments”) except
that the following shall be permitted:

 

(a)           the Parent and its Subsidiaries may acquire and hold accounts
receivable owing to any of them and Cash Equivalents;

 

(b)           so long as no Event of Default exists or would result therefrom,
the Parent and its Subsidiaries may make loans and advances in the ordinary
course of business to their employees so long as the aggregate principal amount
thereof at any time outstanding which are made on or after the date hereof
(determined without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $2,000,000;

 

(c)           the Credit Parties may make intercompany loans and advances among
one another; provided that any loans or advances to a Credit Party pursuant to
this clause will be unsecured and subordinated to the Obligations of the
respective Credit Party pursuant to written subordination provisions in the form
of Exhibit N;

 

(d)           the Parent and its Subsidiaries may sell or transfer assets to the
extent permitted by Section 9.02;

 

(e)           the Credit Parties may make Investments in one another;

 

(f)            Investments existing on the date hereof and described on Schedule
XI, without giving effect to any additions thereto or replacement thereof;

 

(g)           Parent and its Subsidiaries (other than Borrower, Arlington or any
Subsidiary Guarantor) may make loans and advances to the Credit Parties, so long
as such loans or advances are unsecured and subordinated to the Loans pursuant
to written subordination provisions in the form of Exhibit N;

 

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(h)           Subsidiaries of the Parent (other than Borrower, Arlington or any
Subsidiary Guarantors) may make loans, advances and investments in other
Subsidiaries of Parent (other than Credit Parties and Non-Recourse
Subsidiaries);

 

(i)            Parent and its Subsidiaries may make Investments in amounts to
fund charter costs and actual expenses relating to operating Vessels leased or
chartered as of the date hereof by General Maritime NSF Corporation, GMR Concord
LLC, GMR Contest LLC and GMR Concept LLC, provided that, such Investments may
only be made in good faith and only to the extent necessary to fund such costs
and expenses after taking into account the cash and Cash Equivalents held by
such Subsidiary;

 

(j)            From and after the later of (x) the reduction of the amortization
shortfall amount under the 2008 Credit Agreement to zero and (y) the second
anniversary of the Closing Date, so long as no Event of Default exists or would
result therefrom, the Parent, Borrower and Arlington may make Investments in its
non-Wholly-Owned Subsidiaries; provided that (a) the aggregate amount of all
Investments under this clause (j) shall not exceed $100,000,000, (b) if a
Non-Recourse Default has occurred and is continuing at any time, then neither
the Parent, Arlington nor the Borrower may make any Investments in such
Non-Recourse Subsidiary at such time and (c) the Total Leverage Ratio on a pro
forma basis after giving effect to such Investments shall be no greater than
0.60 to 1.00 for the most recently ended Test Period for which financial
statements are due under Section 8.01(a) or (b); provided that, prior to making
any Investment pursuant to this clause (j), Parent, Borrower and Arlington shall
obtain consent from the Required Lenders;

 

(k)           So long as no Event of Default is continuing, the Parent and its
Subsidiaries (other than a Subsidiary Guarantor which owns a Mortgaged Vessel)
may make Investments in their Subsidiaries that are not Subsidiary Guarantors
hereunder and which are “Restricted Subsidiaries” under and as defined in the
Senior Unsecured Note Indenture (it being acknowledged and agreed that, subject
to Section 8.16 hereof, all “Restricted Subsidiaries” under the Senior Unsecured
Note Indenture are required to be Subsidiary Guarantors hereunder); and

 

(l)            After the later of (x) the reduction of the amortization
shortfall amount under the 2008 Credit Agreement to zero and (y) the second
anniversary of the Closing Date, the Parent may make Investments provided that
for all Investments made pursuant to this clause (k):

 

(i)            no Default or Event of Default has occurred and is continuing (or
would arise after giving effect thereto) at the time such Investments are made;

 

(ii)           the aggregate amount of Investments made after the later of
(x) the reduction of the amortization shortfall amount under the 2008 Credit
Agreement to zero and (y) the second anniversary of the Closing Date does not
exceed 50% of the Parent’s Consolidated Net Income for the period (taken as one
accounting period) commencing on July 1, 2013 and ending on the last day of the
last fiscal quarter for which financial statements have been provided to the
Lenders pursuant to Section 8.01(a) or 8.01(b) plus the Available Equity
Proceeds Amount; less the aggregate amount of Dividends made, paid or declared
(in each case, without duplication) pursuant to Section 9.03(c) since the

 

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later of (x) the reduction of the amortization shortfall amount under the 2008
Credit Agreement to zero and (y) the second anniversary of the Closing Date;

 

(iii)          the Total Leverage Ratio on a pro forma basis after giving effect
to such Investments should be no greater than 0.60 : 1.00 for the most recently
ended Test Period for which financial statements are due under
Section 8.01(a) or 8.01(b); and

 

(iv)          on or prior to the date on which such Investments are made, the
Parent shall deliver to the Administrative Agent an officer’s certificate signed
by the chief financial officer of the Parent, certifying that the requirements
set forth in clauses (i) through (iii) are satisfied.

 

Notwithstanding anything herein to the contrary, no Collateral Disposition may
be effectuated pursuant to this Section 9.05 and shall only be permitted to the
extent in compliance with Section 9.02(a).

 

9.06         Transactions with Affiliates.  The Parent and Borrower will not,
and will not permit any of their Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of such Person, unless on terms and conditions no
less favorable to such Person as would be obtained by such Person at that time
in a comparable arm’s-length transaction with a Person other than an Affiliate,
except that:

 

(a)           Shareholder Payments may be paid to the extent provided in
Section 9.03;

 

(b)           loans and Investments may be made and other transactions may be
entered into between the Parent and its Subsidiaries to the extent permitted by
Sections 9.04 and 9.05;

 

(c)           the Parent may pay customary director’s fees as determined by the
Parent’s independent compensation committee;

 

(d)           the Parent and its Subsidiaries may enter into employment
agreements or arrangements with their respective officers and employees in the
ordinary course of business;

 

(e)           the Parent and its Subsidiaries may pay management fees to
Wholly-Owned Subsidiaries of the Parent in the ordinary course of business or
consistent with past practices; and

 

(f)            the Parent and its Subsidiaries may enter into the transactions
on Schedule IX.

 

9.07         Minimum Cash Balance.  The Parent will not permit the sum of the
following to be less than $45,000,000 at any time (x) the Unrestricted Cash and
Cash Equivalents held by the Parent and its Subsidiaries and (y) the lesser of
(i) the available unutilized commitments under the 2008 Credit Agreement and the
2010 Credit Agreement, provided that the maturity date for the available
unutilized commitments under the 2008 Credit Agreement and the 2010 Credit
Agreement is at least six months from the date of determination, and
(ii) $25,000,000; provided that, in addition to the covenant set forth above, in
the event that a Non-Recourse

 

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Default has occurred and is continuing, the Non-Recourse Subsidiary that is
subject to such Non-Recourse Default shall also be deemed not to be a Subsidiary
for the purpose hereof.

 

9.08         Total Leverage Ratio.  The Parent will not permit the Total
Leverage Ratio on the last day of any fiscal quarter to be greater than the
ratio set forth below opposite such fiscal quarter; provided that in the event
that a Non-Recourse Default has occurred and is continuing, this Section 9.08
shall be complied with both (x) including such Non-Recourse Subsidiary as a
Subsidiary of the Parent and (y) excluding such Non-Recourse Subsidiary as a
Subsidiary of the Parent:

 

FISCAL QUARTER ENDING

 

TOTAL LEVERAGE RATIO

On the last day of each fiscal quarter from the Closing Date to and including
March 31, 2013

 

0.935 to 1.00

June 30, 2013 and on the last day of each fiscal quarter to and including
March 31, 2014

 

0.88 to 1.00

On the last day of each fiscal quarter thereafter

 

0.77 to 1.00

 

9.09         Collateral Maintenance.  Neither the Parent nor Borrower will
permit the aggregate Fair Market Value of all Mortgaged Vessels owned by the
Parent, Borrower and the Subsidiary Guarantors which have not been sold,
transferred, lost or otherwise disposed of, on an individual charter-free basis,
at any time (such value, the “Aggregate Mortgaged Vessel Value”), as determined
by the most recent appraisal delivered by either of the Parent or Borrower to
the Administrative Agent or obtained by the Administrative Agent in accordance
with Section 8.01(c) to equal less than 110% of the Aggregate Commitment at such
time; provided that, so long as any default in respect of this Section 9.09 is
not caused by any voluntary Collateral Disposition, such default shall not
constitute an Event of Default (but shall constitute a Default) so long as
within 45 days of the occurrence of such default, the Parent shall either
(i) post additional collateral satisfactory to the Required Lenders, pursuant to
security documentation reasonably satisfactory in form and substance to the
Collateral Agent and the Required Lenders (such additional collateral and
security documentation shall be satisfactory to the Collateral Agent so long as
(a) the Obligations are secured thereby, (b) such documentation is satisfactory
under the Senior Credit Facilities and (c) such documentation is substantially
in the form of the Security Documents), sufficient to cure such default (and
shall at all times during such period and prior to satisfactory completion
thereof, be diligently carrying out such actions) or (ii) make such reductions
of the total commitment under the 2008 Credit Agreement in an amount sufficient
to cure such default and repay the loans under the 2008 Credit Agreement and/or
2010 Credit Agreement (it being understood that any action taken in respect of
this proviso shall only be effective to cure such default pursuant to this
Section 9.09 to the extent that no Default or Event of Default exists hereunder
immediately after giving effect thereto).

 

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9.10         Interest Expense Coverage Ratio.  The Parent will not permit the
Interest Expense Coverage Ratio for any Test Period ending on or after June 30,
2014 to be less than 1.35:1.00; provided that in the event that a Non-Recourse
Default has occurred and is continuing, this Section 9.10 shall be complied with
both (x) including such Non-Recourse Subsidiary as a Subsidiary of the Parent
and (y) excluding such Non-Recourse Subsidiary as a Subsidiary of the Parent.

 

9.11               Capital Expenditures.  The Parent will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures at any time
prior to the later of (x) the reduction of the amortization shortfall amount
under the 2008 Credit Agreement to zero and (y) the second anniversary of the
Closing Date, other than (i) maintenance Capital Expenditures incurred in the
ordinary course of business or consistent with past practice, (ii) acquisitions
of new Vessels and (iii) other Capital Expenditures not in the ordinary course
of business, in the case of clauses (ii) and (iii) to the extent funded (and
only to the extent funded) with the Available Equity Proceeds Amount of the
Parent since the Closing Date.

 

9.12         Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. The Parent and Borrower will not, and
will not permit any of Subsidiary Guarantor to amend, modify or change its
Certificate of Incorporation, Certificate of Formation (including, without
limitation, by the filing or modification of any certificate of designation),
By-Laws, limited liability company agreement, partnership agreement (or
equivalent organizational documents) or any agreement entered into by it with
respect to its Equity Interests (including any Shareholders’ Agreement), or
enter into any new agreement with respect to its capital stock or membership
interests (or equivalent interests), other than any amendments, modifications or
changes or any such new agreements which are not in any way materially adverse
to the interests of the Lenders.  Notwithstanding the foregoing, upon not less
than 30 days prior written notice to the Administrative Agent and the Lenders
and so long as no Default or Event of Default exists and is continuing, any
Subsidiary Guarantor may change its jurisdiction of organization to another
jurisdiction reasonably satisfactory to the Required Lenders, provided that any
Subsidiary Guarantor that has entered into the Security Documents hereunder
shall promptly take all actions reasonably deemed necessary by the Lenders to
preserve, protect and maintain, without interruption, the security interest and
Lien of the Collateral Agent in any Collateral owned by such Subsidiary
Guarantor, and such Subsidiary Guarantor shall have provided to the
Administrative Agent and the Lenders customary opinions of counsel assuring that
the conditions of this proviso have been satisfied.

 

9.13         Limitation on Certain Restrictions on Subsidiaries.  The Parent and
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Parent or any Subsidiary
of the Parent, or pay any Indebtedness owed to the Parent or a Subsidiary of the
Parent, (b) make loans or advances to the Parent or any of the Parent’s
Subsidiaries or (c) transfer any of its properties or assets to the Parent or
any of the Parent’s Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) the 2008 Credit Agreement and the 2010 Credit
Agreement as in effect on the Closing Date, (iv) customary provisions
restricting subletting or assignment of any lease

 

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governing a leasehold interest of the Parent or a Subsidiary of the Parent,
(v) customary provisions restricting assignment of any agreement entered into by
the Parent or a Subsidiary of the Parent in the ordinary course of business,
(vi) any holder of a Permitted Lien may restrict the transfer of the asset or
assets subject thereto, (vii) restrictions which are not more restrictive than
those contained in this Agreement contained in any documents governing any
Indebtedness incurred after the date hereof in accordance with the provisions of
this Agreement and (viii) Non-Recourse Indebtedness.

 

9.14         Limitation on Issuance of Equity Interests  (a) The Parent,
Arlington and Borrower will not issue, and will not permit any of their
Subsidiaries (other than a Non-Recourse Subsidiary), to issue any preferred
stock (or equivalent Equity Interests) other than Qualified Preferred Stock.

 

(b)           The Parent will not permit Borrower, Arlington or any Subsidiary
Guarantor to issue any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of the Parent or any of
its Subsidiaries in any class of the capital stock of such Subsidiary and
(iii) to qualify directors to the extent required by applicable law.  Subject to
the terms of the Intercreditor Agreement, all capital stock of any Subsidiary
Guarantor that has entered into the Security Documents issued in accordance with
this Section 9.14(b) shall be delivered to the Collateral Agent pursuant to the
Pledge Agreement.

 

9.15         Business. The Parent and its Subsidiaries will not engage in any
business other than the businesses in which they are engaged in as of the date
hereof and activities directly related thereto, and similar or related
business.  It being understood that no Subsidiary Guarantor which owns a
Mortgaged Vessel will engage directly or indirectly in any business other than
the business of owning and operating Mortgaged Vessels and business ancillary or
complimentary thereto.

 

9.16         Anti-Layering. The Parent and Borrower will not, and will not
permit any of their Subsidiaries to, create, incur, assume, suffer or permit to
exist, guaranty, or in any other manner become liable with respect to, any
Indebtedness that is contractually  subordinated in any way (either in respect
of liens or payment or any combination thereof) to the Senior Credit Facilities
(including, but not limited, to any amendment or modification to any Senior
Credit Facility effectuated for the purpose of making certain principal
obligations “last out” or a separate class of Indebtedness or otherwise to
establish intercreditor rights among tranches of debt other than pursuant to the
Intercreditor Agreements) unless such Indebtedness is permitted by the terms of
this Agreement or is Indebtedness that is subordinate in all respects to the
Loans and the Obligations related to the Loans pursuant to provisions
satisfactory to the Required Lenders, provided however, that Indebtedness
incurred under Section 9.04(vii) shall be permitted as a “first-out” tranche or
on a pari passu or senior basis with the Senior Credit Facilities.  The Parent
and Borrower will not, and will not permit any of their Subsidiaries to, issue
any equity interest other than common stock or Qualified Preferred Stock.

 

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9.17         Restrictions on Modifications to Senior Credit Facilities.  The
Parent and its Subsidiaries shall not amend or otherwise modify or waive any
provisions of the Senior Credit Facilities except to the extent permitted by the
Intercreditor Agreements.

 

9.18               Limitations on Voluntary Payments, Etc. of Senior Unsecured
Notes; Modifications of Senior Unsecured Documents.  (a) The Parent will not,
and will not permit any of its Subsidiaries to, directly or indirectly,
voluntarily prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner the Senior Unsecured Notes.

 

(b)           The Parent will not, and will not permit any of its Subsidiaries
to, directly or indirectly, amend, modify or waive any term or condition of the
Senior Unsecured Notes, including, but not limited to the Senior Unsecured Note
Documents (other than any such amendment, modification, waiver or other change
to any of the terms of the Senior Unsecured Note Documents that does not require
the consent of the noteholders and is not adverse to the interests of the
Lenders).

 

9.19         Bank Accounts.  Parent will not permit any Subsidiary Guarantor to
maintain any deposit, savings, investment or other similar accounts other than
(i) the Concentration Accounts and (ii) any other account or accounts opened and
maintained by a Credit Party at any time if the aggregate amount of cash
deposited in such other account(s) is less than $5,000,000 at such time.

 

SECTION 10 - EVENTS OF DEFAULT.  Upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

10.01       Payments.  Borrower shall (i) default in the payment when due of any
principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note or any other fees or amounts owing hereunder or
thereunder; or

 

10.02       Representations, etc.  Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or

 

10.03       Covenants.  Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(f)(i), 8.08, 8.12(a), 8.14 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and, in the case of this clause (ii), such default
shall continue unremedied for a period of 30 days after written notice to
Borrower by the Administrative Agent or any of the Lenders; or

 

10.04       Default Under Other Agreements.  (i)  The Parent or any of its
Subsidiaries shall default in any payment of any Indebtedness (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) the Parent or any of
its Subsidiaries shall default in the observance or performance of any agreement
or condition relating to any Indebtedness (other than the Obligations) or

 

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contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is required),
any such Indebtedness to become due prior to its stated maturity or (iii) any
Indebtedness (other than the Obligations) of the Parent or any of its
Subsidiaries shall be declared to be due and payable, or required to be prepaid,
redeemed, defeased or repurchased other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof, provided that it shall not be
a Default or Event of Default under this Section 10.04 if a Non-Recourse Default
shall occur or be continuing or unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii), inclusive,
exceeds $10,000,000; or

 

10.05       Bankruptcy, etc.  The Parent or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor
thereto (the “Bankruptcy Code”); or an involuntary case is commenced against the
Parent or any of its Subsidiaries and the petition is not controverted within 20
days after service of summons, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Parent or any of its Subsidiaries or the Parent or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Parent or any of its Subsidiaries or there is commenced against the Parent or
any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or the Parent or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Parent or any of its Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
the Parent or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Parent or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or

 

10.06       ERISA.  Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof under Section 412 of the Code or
Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 or 430 of the Code or
Section 302 or 303 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is reasonably likely to have a
trustee appointed to administer such Plan, any Plan which is subject to Title IV
of ERISA is, shall have been or is reasonably likely to be terminated or to be
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, its actuary has certified that a determination has
been made that a Plan (other than a Multiemployer Plan) is an at-risk plan
within the meaning of Section 430 of the Code or Section 303 of ERISA, a Plan
which is a Multiemployer Plan is in endangered or critical status under
Section 305 of ERISA, a

 

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contribution required to be made with respect to a Plan or a Foreign Pension
Plan is not timely made, the Parent or any of its Subsidiaries or any ERISA
Affiliate has incurred or events have happened, or reasonably expected to
happen, that will cause it to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or on account of a
group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the Parent,
or any of its Subsidiaries, has incurred or is reasonably likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or Plans or
Foreign Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the reasonable opinion of
the Required Lenders, has had, or could reasonably be expected to have, a
Material Adverse Effect; or

 

10.07       Security Documents.  At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease in any material respect to give the Collateral Agent for
the benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except in connection with Permitted Liens), and subject to no other Liens
(except Permitted Liens), or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any of the Security Documents and such default
shall continue beyond any grace period (if any) specifically applicable thereto
pursuant to the terms of such Security Document, or any “event of default” (as
defined in any Vessel Mortgage) shall occur in respect of any Vessel Mortgage;
or

 

10.08       Guaranties.  After the execution and delivery thereof, any Guaranty,
or any provision thereof, shall cease to be in full force or effect as to any
Guarantor (unless such Guarantor is no longer a Subsidiary by virtue of a
liquidation, sale, merger or consolidation permitted by Section 9.02) or any
Guarantor (or Person acting by or on behalf of such Guarantor) shall deny or
disaffirm such Guarantor’s obligations under the Guaranty to which it is a party
or any Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Guaranty to which it is a party beyond any grace period (if any) provided
therefor; or

 

10.09       Judgments.  One or more judgments, orders or decrees shall be
entered against the Parent or any of its Subsidiaries involving in the aggregate
for the Parent and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments, orders and decrees
either shall be final and non-appealable or shall not be vacated, discharged or
stayed or bonded pending appeal for any period of 60 consecutive days, and the
aggregate amount of all such judgments, to the extent not covered by insurance,
exceeds $10,000,000; or

 

10.10       Change of Control.  A Change of Control shall occur;

 

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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written direction
of the Required Lenders, shall by written notice to Borrower, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 10.05
shall occur, the result which would occur upon the giving of written notice by
the Administrative Agent to Borrower as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such notice):  (i) declare
the principal of and any accrued interest in respect of all Loans and the Notes
and all Obligations owing hereunder and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Credit Party;
and (ii) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Security Documents. THE PARTIES HERETO AGREE THAT,
PURSUANT TO SECTION 4.01(f), ANY PAYMENT PRIOR TO THE SECOND ANNIVERSARY OF THE
CLOSING DATE, WHETHER ARISING OUT OF ACCELERATION, BY VIRTUE OF PAYMENT PURSUANT
TO ANY PLAN OF REORGANIZATION OR OTHERWISE, SHALL RESULT IN DAMAGES TO LENDERS
WHICH THE PARTIES HERETO AGREE SHALL EQUAL 10% OF THE PRINCIPAL AMOUNT TO BE
REPAID.  THE PARENT, BORROWER AND THE OTHER CREDIT PARTIES FURTHER AGREE THAT,
WITHOUT DUPLICATION OF ANY PENALTY PAID PURSUANT TO SECTION 4.01(f), LIQUIDATED
DAMAGES IN AN AMOUNT EQUAL TO SUCH 10% OF THE PRINCIPAL AMOUNT OF OBLIGATIONS
WILL BE PAYABLE BY BORROWER TO LENDERS IN THE EVENT THAT ANY PAYMENT IS MADE
ARISING OUT OF EVENTS THAT OCCURRED PRIOR TO THE SECOND ANNIVERSARY OF THE
CLOSING DATE UPON THE EARLIEST OF (A) ACCELERATION OF THE OBLIGATIONS, (B) AN
EVENT OF DEFAULT PURSUANT TO SECTION 10.05, AND (C) PAYMENT PURSUANT TO ANY PLAN
OF REORGANIZATION, LIQUIDATION, REFINANCING, REINSTATEMENT OR PAYMENT OF ANY
OTHER CONSIDERATION.

 

SECTION 11 - DEFINITIONS AND ACCOUNTING TERMS.

 

11.01       Defined Terms.  As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

 

“2008 Agent” means Nordea Bank Finland plc, New York Branch, as administrative
agent and collateral agent under the 2008 Credit Agreement.

 

“2008 Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of the date hereof, by and among the Parent, General
Maritime Subsidiary Corporation (f/k/a General Maritime Corporation), a Marshall
Islands corporation, as borrower, General Maritime Subsidiary II Corporation and
Arlington, as guarantors, the lenders party thereto from time to time, and
Nordea Bank Finland plc, New York Branch, as administrative agent and as
collateral agent, as may be amended, restated, supplemented and otherwise
modified to the extent permitted herein and in the Intercreditor Agreements.

 

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“2010 Agent” means Nordea Bank Finland plc, New York Branch, as administrative
agent and collateral agent under the 2010 Credit Agreement.

 

“2010 Credit Agreement” means that certain Credit Agreement, dated as of the
date hereof, by and among the Parent, General Maritime Subsidiary II
Corporation, a Marshall Islands corporation, as borrower, General Maritime
Subsidiary Corporation and Arlington as guarantors, the lenders party thereto
from time to time, and Nordea Bank Finland plc, New York Branch, as
administrative agent and as collateral agent, as may be amended, restated,
supplemented and otherwise modified to the extent permitted herein and in the
Intercreditor Agreements.

 

“2010 Mortgaged Vessel” means “Primary Collateral Vessel” under and as defined
in the 2010 Credit Agreement.

 

“Acceptable Flag Jurisdiction” shall have the meaning provided in Section 8.15.

 

“Acceptable Replacement Vessel” shall mean, with respect to a 2010 Mortgaged
Vessel, any Vessel with an equal or greater Fair Market Value than such 2010
Mortgaged Vessel (as determined in accordance with the appraisal report most
recently delivered to the Administrative Agent (or obtained by the
Administrative Agent or the Lenders) pursuant to Section 8.01(c) or delivered
pursuant to a Vessel Exchange to the Administrative Agent by Borrower); provided
that such Vessel must (i) constitute a double hull Vessel, (ii) be of at least
80,000 dead-weight tons (“dwt”) and be of equal or greater dwt as such 2010
Mortgaged Vessel, (iii) have been built after such 2010 Mortgaged Vessel it
replaces, (iv) have a class certificate reasonably acceptable to the Required
Lenders and (v) be registered and flagged in the same jurisdiction as such 2010
Mortgaged Vessel.

 

“Adjustment Event and/or Issuance” means (i) any adjustment to the number of
Warrant Exercise Shares into which the Warrants are exercisable pursuant to the
terms of the Warrants, (ii) any issuance of additional Warrants, rights or
securities pursuant to the terms of the Warrants, or (iii) the issuance to
Lender or its affiliates of any securities upon the exercise of preemptive
rights.

 

“Administrative Agent” shall have the meaning provided in the first paragraph of
this Agreement, and shall include any successor thereto.

 

“Affiliate” shall mean, with respect to any Person, any other Person (including,
for purposes of Section 9.06 only, all directors, officers and partners of such
Person) directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person; provided, however, that for purposes
of Section 9.06, an Affiliate of the Parent shall include any Person that
directly or indirectly owns more than 5% of any class of the capital stock of
the Parent and any officer or director of the Parent or any of its
Subsidiaries.  A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.  Notwithstanding anything to the
contrary contained above, for purposes of Section 9.06, neither the
Administrative Agent, nor the Collateral Agent, nor any Lender (or any of their
respective affiliates) shall be deemed to

 

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constitute an Affiliate of the Parent or its Subsidiaries in connection with the
Credit Documents or its dealings or arrangements relating thereto.

 

“Agents” shall mean, collectively, the Administrative Agent and the Collateral
Agent.

 

“Aggregate Commitment” shall mean the sum of $200,000,000 and the aggregate
commitments and principal amounts outstanding (without duplication) under the
Senior Credit Facilities.

 

“Aggregate Mortgaged Vessel Value” shall have the meaning provided in
Section 9.09.

 

“Agreement” shall mean this Credit Agreement, as modified, supplemented, amended
or restated from time to time.

 

“Approved Appraiser” shall mean H. Clarksons & Company Limited, Fearnleys Ltd.,
R.S. Platou Shipbrokers a.s., Lorentzen & Stemoco, Simpson Spence & Young Ltd.
or such other independent appraisal firm as may be acceptable to the Required
Lenders.

 

“Arlington” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Assignment and Assumption Agreement” shall mean the Assignment and Assumption
Agreement substantially in the form of Exhibit L (appropriately completed).

 

“Assignments of Earnings” shall have the meaning provided in Section 5.14.

 

“Assignments of Insurances” shall have the meaning provided in Section 5.14.

 

“Available Equity Proceeds Amount” shall mean, on any date, the amount of Net
Cash Proceeds received by the Parent from the issuance of its common stock after
the Closing Date and prior to such date of determination less the cash amount
expended by the Parent and its Subsidiaries, in each case since the Closing Date
and prior to such date of determination, to (i) acquire new Vessels, make any
other Investments under Section 9.05(j) and Section 9.05(l), (ii) make any
Capital Expenditures (other than maintenance Capital Expenditures), (iii) make
any other cash expenditures not in the ordinary course of business and (iv) pay
Dividends pursuant to Section 9.03(c) from the Available Equity Proceeds Amount,
in each case without duplication and since the Closing Date with the proceeds of
any such equity offering.

 

“Bankruptcy Code” shall have the meaning provided in Section 10.05.

 

“Base Rate” shall mean for any day, the greater of (a) a rate of interest per
annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
the Federal Funds Rate for such day plus ½ of 1% per annum and (b) 4.00% per
annum.

 

“Borrower” shall have the meaning provided in the first paragraph of this
Agreement.

 

“Borrowing” shall mean the borrowing of Loans from all the Lenders.

 

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“Business Day” shall mean any day except Saturday, Sunday and any day which
shall be in California, New York City or London a legal holiday or a day on
which banking institutions are authorized or required by law or other government
action to close.

 

“Capital Expenditures” shall mean, with respect to any Person, all expenditures
by such Person which should be capitalized in accordance with GAAP and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.

 

“Capitalized Lease Obligations” of any Person shall mean all rental obligations
which, under GAAP, are or will be required to be capitalized on the books of
such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.

 

“Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than one year from the date of
acquisition, (ii) time deposits and certificates of deposit of any commercial
bank having, or which is the principal banking subsidiary of a bank holding
company having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody’s and in each case maturing not
more than one year after the date of acquisition by such Person, and
(v) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through
(iv) above.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C.
§ 9601 et seq.

 

“Change of Control” shall mean (i) the Parent shall at any time and for any
reason fail to own, directly or indirectly, 100% of the Equity Interests of the
Borrower and each Subsidiary Guarantor which owns a Mortgaged Vessel, except in
the case of a non-U.S. Subsidiary Guarantor, any such other ownership as
required by applicable law, (ii) the sale, lease or transfer of all or
substantially all of the Parent’s assets to any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act), (iii) the liquidation or
dissolution of the Parent or Borrower, (iv) any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) other than one or more of the
Permitted Holders shall at any time become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 30% of the
outstanding voting or economic Equity Interests of the Parent, (vi) the
replacement of a majority of the directors on the board of directors of the
Parent over a two-year period from the directors who constituted the board of
directors of the Parent at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the board of
directors of the Parent then still in office who either were members of such
board of directors at the beginning of such period or whose election as a member
of such board of directors was previously so approved or (vi) a “change of
control” or similar event shall occur as provided in any outstanding
Indebtedness (excluding Indebtedness with an aggregate principal amount of

 

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less than $20,000,000) of Parent or any of its Subsidiaries (or the
documentation governing the same).

 

“Clarksons’ Historical Average Spot Rate” shall mean the 10-year monthly average
of the daily historical spot rates published by Clarksons PLC.

 

“Closing Date” means the first Business Day upon which the conditions set forth
in Section 5 have been satisfied (as determined by the Lenders) prior to
12:00 p.m. (New York time) and the initial Borrowing of Loans hereunder occurs.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.  Except as
described in the definition of FACTA, section references to the Code are to the
Code, as in effect at the date of this Agreement and any subsequent provisions
of the Code, amendatory thereof, supplemental thereto or substituted therefor.

 

“Collateral” shall mean all property (whether real or personal) with respect to
which any security interests have been granted (or purported to be granted)
pursuant to any Security Document, including, without limitation, all Pledge
Agreement Collateral, all Earnings and Insurance Collateral, all Mortgaged
Vessels and all cash and Cash Equivalents at any time delivered as collateral
thereunder or as required hereunder.

 

“Collateral Agent” shall mean the Administrative Agent acting as mortgagee,
security trustee or collateral agent for the Secured Creditors pursuant to the
Security Documents.

 

“Collateral and Guaranty Requirements” shall mean with respect to a Mortgaged
Vessel, the requirement that:

 

(i)            each Subsidiary defined as a Subsidiary Guarantor shall have duly
authorized, executed and delivered to the Administrative Agent the Subsidiaries
Guaranty, substantially in the form of Exhibit E (as modified, supplemented or
amended from time to time, together with any Joinder Agreement (the
“Subsidiaries Guaranty”)), or a joinder thereto substantially in the form of
Exhibit Q (as modified, supplemented or amended from time to time, the “Joinder
Agreement”), and the Subsidiaries Guaranty shall be in full force and effect;

 

(ii)           the Parent, Arlington, the Borrower and each Subsidiary Guarantor
described in clause (x) of the definition thereof shall have (x) duly
authorized, executed and delivered the Pledge Agreement substantially in the
form of Exhibit F (as modified, supplemented or amended from time to time (the
“Pledge Agreement”)) or a joinder thereto, and shall have (A) delivered to the
Collateral Agent, as pledgee, all the Pledged Securities referred to therein,
together with executed and undated transfer powers, including, without
limitation and to the extent applicable, a charge over shares of any Bermuda
registered Subsidiary Guarantor taken by way of a Bermuda-law governed charge
over shares, and (B) otherwise complied with all of the requirements set forth
in the Pledge Agreement, and (y) duly authorized, executed and delivered any
other related documentation necessary or advisable to perfect the Lien on the
Pledge Agreement Collateral in the respective jurisdictions of formation of the
respective Subsidiary Guarantor, the Parent or the Borrower, as the case may be;

 

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(iii)          each Subsidiary Guarantor that owns a Mortgaged Vessel, the
Collateral Agent and Nordea Bank Finland plc, New York Branch, as depositary
bank, shall have duly executed and delivered a control agreement substantially
in the form attached to the Pledge Agreement with respect to any Concentration
Account owned by such Subsidiary Guarantor;

 

(iv)          each Credit Party that owns a Mortgaged Vessel shall (A) have duly
authorized, executed and delivered (x) an Assignment of Earnings substantially
in the form of Exhibit G (as modified, supplemented or amended from time to
time, the “Assignment of Earnings”) and (y) an Assignment of Insurances
substantially in the form of Exhibit H (as modified, supplemented or amended
from time to time, the “Assignment of Insurances”), together covering all of
such Credit Party’s present and future Earnings and Insurance Collateral on such
Mortgaged Vessels, and (B) use its commercially reasonably efforts to obtain an
Assignment of Charters substantially in the form of Exhibit B to the Assignment
of Earnings (as modified, supplemented or amended from time to time, the
“Assignment of Charters”) for any charter or similar contract that has as of the
execution date of such charter or similar contract a remaining term of 12 months
or greater, and shall use commercially reasonable efforts to provide appropriate
notices and consents related thereto, together covering all of such Credit
Party’s present and future Earnings and Insurance Collateral on such Mortgaged
Vessels, in each case together with:

 

(a)           proper Financing Statements (Form UCC-1) in form for filing under
the UCC or in other appropriate filing offices of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Pledge Agreement, the deposit account control agreements, the Assignment of
Earnings, Assignment of Charters and the Assignment of Insurances; and

 

(b)           certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as debtor and that are filed in Washington, D.C. and
any other relevant jurisdiction, together with copies of such other financing
statements (none of which shall cover the Collateral, other than as set forth in
the Intercreditor Agreements, unless the Collateral Agent shall have received
Form UCC-3 Termination Statements (or such other termination statements as shall
be required by local law) fully executed for filing if required by applicable
laws in respect thereof);

 

(v)           each Credit Party that owns a Mortgaged Vessel shall have duly
authorized, executed and delivered, and caused to be recorded in the appropriate
Vessel registry a Vessel Mortgage with respect to such Mortgaged Vessel and such
Vessel Mortgage shall be effective to create in favor of the Collateral Agent
and/or the Lenders a legal, valid and enforceable security interest, in and lien
upon such Mortgaged Vessel subject only to Permitted Liens (which Liens on
(i) the Mortgaged Vessels flagged in the Republic of the Marshall Islands and
(ii) the Pledged Securities in entities incorporated in the Republic of the
Marshall Islands securing the obligations under the 2010 Credit Agreement and
the 2008 Credit Agreement shall have been consented to in writing by the
collateral agent under the 2008 Credit Agreement and the collateral agent under
the 2010 Credit Agreement, a copy of which consent shall have been filed with
the Deputy Commissioner of Maritime Affairs of the Republic of Marshall
Islands);

 

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(vi)          all filings, deliveries of instruments and other actions necessary
to perfect and preserve the security interests described in clauses (ii) through
and including (v) above shall have been duly effected and the Collateral Agent
shall have received evidence thereof in form and substance reasonably
satisfactory to the Collateral Agent and the Required Lenders;

 

(vii)         the Administrative Agent shall have received appraisal reports of
recent date (and in no event dated earlier than 60 days prior to the Closing
Date) in form and substance and from two Approved Appraisers, stating the then
current Fair Market Value of such Mortgaged Vessel;

 

(viii)        the Administrative Agent shall have received each of the
following:

 

(a)           certificates of ownership from appropriate authorities showing (or
confirmation updating previously reviewed certificates and indicating) the
registered ownership of such Mortgaged Vessel by the relevant Subsidiary
Guarantor;

 

(b)           the results of maritime registry searches with respect to such
Mortgaged Vessel, indicating no record liens other than Liens in favor of the
Collateral Agent and/or the Lenders and Permitted Liens;

 

(c)           class certificates from a classification society listed on
Schedule X or another classification society reasonably acceptable to the
Lenders, indicating that such Mortgaged Vessel meets the criteria specified in
Section 8.15;

 

(d)           certified copies of all agreements related to the technical and
commercial management of each Mortgaged Vessel;

 

(e)           certified copies of all ISM and ISPS Code documentation for each
Mortgaged Vessel; and

 

(f)            a report, in form and scope reasonably satisfactory to the
Required Lenders, from a firm of independent marine insurance brokers reasonably
acceptable to the Required Lenders (it being understood that Leeds and Leeds,
AON and Marsh are acceptable) with respect to the insurance maintained by the
Credit Parties in respect of such Mortgaged Vessel, together with a certificate
from such broker certifying that such insurances (i) are placed with such
insurance companies and/or underwriters and/or clubs, in such amounts, against
such risks, and in such form, as are customarily insured against by similarly
situated insureds for the protection of the Administrative Agent, the Collateral
Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance
requirements of each respective Vessel Mortgage and (iii) comply with the
Required Insurance;

 

(ix)           the Administrative Agent and the Lenders shall have received from
(a) special New York counsel to each of the Credit Parties (which shall be
Kramer Levin Naftalis & Frankel LLP or other counsel to each of the Credit
Parties qualified in such jurisdiction and reasonably satisfactory to the
Required Lenders), an opinion addressed to the Administrative

 

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Agent and each of the Lenders and dated as of the date that such Collateral and
Guaranty Requirements are required to be satisfied under this Agreement covering
the matters set forth in Exhibit C-1, including, without limitation, that this
Credit Agreement, the 2010 Credit Agreement and the 2008 Credit Agreement do not
conflict with or violate any provisions of the Senior Unsecured Note Indenture,
(b) special New York maritime counsel to each of the Credit Parties (which shall
be Constantine P. Georgiopoulos or other counsel to each of the Credit Parties
qualified in such jurisdiction and reasonably satisfactory to the Required
Lenders), an opinion addressed to the Administrative Agent and each of the
Lenders and dated as of the date that such Collateral and Guaranty Requirements
are required to be satisfied under this Agreement covering the matters set forth
in Exhibit C-2, (c) special Marshall Islands counsel to each of the Credit
Parties (which shall be Dennis J. Reeder, Esq. or other counsel to each of the
Credit Parties qualified in such jurisdiction and reasonably satisfactory to the
Required Lenders), an opinion addressed to the Administrative Agent and each of
the Lenders and dated as of the date that such Collateral and Guaranty
Requirements are required to be satisfied under this Agreement covering the
matters set forth in Exhibit C-4, (d) special Liberian counsel to each of the
Credit Parties (which shall be George E. Henries, Esq. or other counsel to each
of the Credit Parties qualified in such jurisdiction and reasonably satisfactory
to the Required Lenders), an opinion addressed to the Administrative Agent and
each of the Lenders and dated as of the date that such Collateral and Guaranty
Requirements are required to be satisfied under this Agreement covering the
matters set forth in Exhibit C-3 , (f) special Russian counsel to each of the
Credit Parties (which shall be Golsblat BLP or other counsel to each of the
Credit Parties qualified in such jurisdiction and reasonably satisfactory to the
Required Lenders), an opinion addressed to the Administrative Agent and each of
the Lenders and dated as of the date that such Collateral and Guaranty
Requirements are required to be satisfied under this Agreement covering the
matters set forth in Exhibit C-5, (g) special Portuguese counsel to each of the
Credit Parties (which shall be Albuquerque & Associados or other counsel to each
of the Credit Parties qualified in such jurisdiction and reasonably satisfactory
to the Required Lenders), an opinion addressed to the Administrative Agent and
each of the Lenders and dated as of the date that such Collateral and Guaranty
Requirements are required to be satisfied under this Agreement covering the
matters set forth in Exhibit C-6, (h) special Singaporean counsel to each of the
Credit Parties (which shall be Allen & Gledhill LLP or other counsel to each of
the Credit Parties qualified in such jurisdiction and reasonably satisfactory to
the Required Lenders), an opinion addressed to the Administrative Agent and each
of the Lenders and dated as of the date that such Collateral and Guaranty
Requirements are required to be satisfied under this Agreement covering the
matters set forth in Exhibit C-7, (i) special Bermuda counsel to each of the
Credit Parties (which shall be Conyers, Dill & Pearman Limited or other counsel
to each of the Credit Parties qualified in such jurisdiction and reasonably
satisfactory to the Required Lenders), an opinion addressed to the
Administrative Agent and each of the Lenders and dated as of the date that such
Collateral and Guaranty Requirements are required to be satisfied under this
Agreement covering the matters set forth in Exhibit C-8 and (i) counsel to each
of the Credit Parties in the jurisdiction of the flag of each Mortgaged Vessel,
an opinion addressed to the Administrative Agent and each of the Lenders and
dated as of the date that such Collateral and Guaranty Requirements are required
to be satisfied under this Agreement covering such matters as shall be required
by the Lenders, in each case which shall (x) be in form and substance reasonably
acceptable to the Administrative Agent and the Required Lenders and (y) cover
the matters set forth in the relevant Exhibit, including the perfection of the
security interests (other than those to be covered by opinions

 

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delivered pursuant to the other opinions above) granted pursuant to the Security
Documents, and such other matters incidental to the transactions contemplated
herein as the Administrative Agent or the Required Lenders may reasonably
request; and

 

(x)            (a) the Administrative Agent shall have received a certificate,
dated the Closing Date and reasonably acceptable to the Lenders, signed by the
Chairman of the Board, the President, any Vice President, the Treasurer or an
authorized manager, member or general partner of each Credit Party, and attested
to by the Secretary or any Assistant Secretary (or, to the extent such Credit
Party does not have a Secretary or Assistant Secretary, the analogous Person
within such Credit Party) of such Credit Party, as the case may be,
substantially in the form of Exhibit D, with appropriate insertions, together
with copies of the Certificate of Incorporation and By-Laws (or equivalent
organizational documents) of such Credit Party and the resolutions of such
Credit Party referred to in such certificate authorizing the consummation of the
Transaction; and (b) the Administrative Agent shall have received copies of
governmental approvals, good standing certificates and bring-down telegrams or
facsimiles, if any, which the Required Lenders may have reasonably requested in
connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.

 

“Collateral Disposition” shall mean (i) the sale, lease, transfer or other
disposition by the Parent or any of its Subsidiaries to any Person other than
Borrower or a Subsidiary Guarantor which owns a Mortgaged Vessel of any
Mortgaged Vessel or (ii) any Event of Loss of any Mortgaged Vessel; provided
that (a) the charter of any Mortgaged Vessel shall not be considered a
Collateral Disposition and (b) a Vessel Exchange in accordance with this
Agreement shall not constitute a Collateral Disposition for purposes of
Section 4.02 of this Agreement.

 

“Commitment” shall mean, for each Lender, the amount set forth opposite such
Lender’s name in Schedule I hereto as the same may be (x) reduced from time to
time pursuant to Sections 4.01, 4.02 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such Lender pursuant to Section or
13.04(b).

 

“Concentration Account” shall have the meaning provided in the Pledge Agreement.

 

“Consolidated Cash Interest Expense” shall mean, for any period, (i) the total
consolidated interest expense paid or payable of the Parent and its Subsidiaries
(including, without limitation, to the extent included under GAAP, all
commission, discounts and other commitment fees and charges) for such period
(calculated without regard to any limitations on payment thereof), adjusted to
exclude (to the extent same would otherwise be included in the calculation above
in this clause (i)), the amortization of any deferred financing costs for such
period and any interest expense actually “paid in kind” or accreted during such
period, plus (ii) without duplication, that portion of Capitalized Lease
Obligations of the Parent and its Subsidiaries on a consolidated basis
representing the interest factor for such period.

 

“Consolidated EBIT” shall mean, for any period, the Consolidated Net Income for
such period, before interest expense of the Parent and its Subsidiaries and
provision for taxes based on income and without giving effect to any
extraordinary gains or losses or gains or losses from sales of assets other than
inventory sold in the ordinary course of business.

 

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“Consolidated EBITDA” shall mean, for any period, Consolidated EBIT for such
period, adjusted by adding thereto the amount of all amortization of intangibles
and depreciation and any non-cash management incentive compensation that was
deducted in arriving at Consolidated EBIT for such period.

 

“Consolidated Indebtedness” shall mean, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness (but including in any
event the then outstanding principal amount of all Loans, all Capitalized Lease
Obligations and all letters of credit outstanding) of the Parent and its
Subsidiaries on a consolidated basis as determined in accordance with GAAP;
provided that (i) Indebtedness outstanding pursuant to trade payables and
accrued expenses incurred in the ordinary course of business, and
(ii) guarantees of operating leases assigned to any of the Parent or any
Wholly-Owned Subsidiary of the Parent to the extent such lease is permitted
hereunder and such obligation does not exceed that which would otherwise be
attributed to such Person under such operating lease, shall be excluded in
determining Consolidated Indebtedness.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net after
tax income of the Parent and its Subsidiaries determined in accordance with
GAAP.

 

“Consolidated Net Indebtedness” shall mean, with respect to any Person, as at
any relevant date, (x) the Consolidated Indebtedness of such Person as at such
date less (y) an amount equal to the Unrestricted Cash and Cash Equivalents of
the Parent and its Subsidiaries as at such date.

 

“Consolidated Net Worth” shall mean, with respect to any Person, the Net Worth
of such Person and its Subsidiaries determined on a consolidated basis in
accordance with GAAP after appropriate deduction for any minority interests in
Subsidiaries.

 

“Consolidated Total Capitalization” shall mean, at any time of determination for
any Person, the sum of Consolidated Indebtedness of such Person at such time and
Consolidated Net Worth of such Person at such time.

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business and any products warranties extended in the ordinary
course of business.  The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which

 

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such Contingent Obligation is made (or, if the less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

 

“Control” shall mean to be the “beneficial owner” (as such term is used in
Rules 13d-3 and 13d-5 of the Securities Exchange Act of 1934) of more than 20%
of the voting power of a corporation or other entity.

 

“Credit Documents” shall mean this Agreement, each Note, each Security Document,
the Subsidiaries Guaranty, each Intercreditor Agreement, the Investment
Agreement, the Side Letter, the Warrant, the Registration Rights Agreement,
after the execution and delivery thereof, each additional guaranty or additional
security document executed pursuant to Section 8.12 and all documents,
agreement, or instruments executed by any of the Credit Parties in favor of the
Agents or Lenders delivered in connection with any of the foregoing.

 

“Credit Party” shall mean the Parent, Arlington, each Borrower, each Subsidiary
Guarantor, and any other Subsidiary of the Parent which at any time executes and
delivers any Credit Document.

 

“Debt Agreements” shall have the meaning provided in Section 5.05.

 

“Default” shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

 

“Dilutive Issuance” shall mean the consummation by the Parent of any issuance or
other transaction that would require any Adjustment Event and/or Issuance, prior
to (i) receipt of the Shareholder Approval (to the extent required, including
pursuant to stock exchange rules) and (ii) consummation of the applicable
Adjustment Event and/or Issuance.

 

“Dividend” shall mean, with respect to any Person, a dividend, distribution or
return of any equity capital to its stockholders, partners or members, any other
distribution, payment or delivery of property or cash to its stockholders,
partners or members in their capacity as such (other than common stock,
Qualified Preferred Stock and the right to purchase any of such stock of such
Person), the redemption, retirement, purchase or acquisition, directly or
indirectly, for a consideration of any shares of any class of its capital stock
or any other Equity Interests outstanding on or after the Closing Date (or any
options or warrants issued by such Person with respect to its capital stock or
other Equity Interests), or the setting aside of any funds for any of the
foregoing purposes, or the granting of permission to any of its Subsidiaries to
purchase or otherwise acquire for a consideration (other than common stock,
Qualified Preferred Stock and the right to purchase any of such stock of such
Person) any shares of any class of the capital stock or any other Equity
Interests of such Person outstanding on or after the Closing Date (or any
options or warrants issued by such Person with respect to its capital stock or
other Equity Interests).  Without limiting the foregoing, “Dividends” with
respect to any Person shall also include all payments made or required to be
made by such Person with respect to any stock appreciation rights, equity
incentive or achievement plans or any similar plans or setting aside of

 

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any funds for the foregoing purposes. For the avoidance of doubt, any
non-dilution adjustments under the warrants listed on Schedule XII shall not
constitute a Dividend.

 

“Documents” shall mean the Credit Documents.

 

“Dollars” and the sign “$” shall each mean lawful money of the United States.

 

“Earnings and Insurance Collateral” shall mean all “Earnings Collateral” and
“Insurance Collateral”, as the case may be, as defined in the respective
Assignment of Earnings and the Assignment of Insurances.

 

“Eligible Transferee” shall mean and include a commercial bank, insurance
company, financial institution, fund or other Person which regularly purchases
interests in loans or extensions of credit of the types made pursuant to this
Agreement, any other Person which would constitute a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act as in effect on
the Effective Date or other “accredited investor” (as defined in Regulation D of
the Securities Act); provided that neither the Parent, the Borrower nor any of
their respective Affiliates shall be an Eligible Transferee at any time.

 

“Employment Agreements” shall have the meaning provided in Section 5.05.

 

“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, “Claims”), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.

 

“Environmental Law” shall mean any applicable federal, state, foreign,
international or local statute, law, treaty, protocol, rule, regulation,
ordinance, code, binding and enforceable guideline, binding and enforceable
written policy, or rule of common law, now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on the Parent or any of its Subsidiaries, relating to the
environment or to Hazardous Materials, including, without limitation, CERCLA;
OPA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); any applicable state,
foreign, international or local counterparts or equivalents thereof, in each
case as amended from time to time; and any applicable rules, regulations or
requirements of a classification society in respect of any Mortgaged Vessel.

 

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“Environmental Release” shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.

 

“Equity Interests” shall mean (i) in the case of a corporation, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents of corporate stock and (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited).

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.  Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with the Parent or a Subsidiary of the Parent would be deemed to
be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of
the Code.

 

“Eurodollar Rate” shall mean with respect to each Interest Period for a Loan,
the greater of (a) a rate per annum equal to (i) the offered rate (rounded
upward to the nearest 1/16 of one percent) for deposits of Dollars for a period
equivalent to such period at or about 11:00 A.M. (London time) on the second
Business Day before the first day of such period as is displayed on Reuters
LIBOR 01 Page (or any successor or substitute page of such service, or any
successor or substitute for such service, as determined by the Administrative
Agent from time to time for purposes of providing quotation of interest rates
applicable to Dollar deposits in the London inter-bank market), provided that if
on such date no such rate is so displayed, the Eurodollar Rate for such period
shall be the rate quoted to the Administrative Agent as the offered rate for
deposits of Dollars in an amount approximately equal to the amount in relation
to which the Eurodollar Rate is to be determined for a period equivalent to such
applicable Interest Period by the prime banks in the London interbank Eurodollar
market at or about 11:00 A.M. (London time) on the second Business Day before
the first day of such period, in each case divided (and rounded upward to the
nearest 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D) and (b) 3.00% per
annum.

 

“Event of Default” shall have the meaning provided in Section 10.

 

“Event of Loss” shall mean any of the following events: (x) the actual or
constructive total loss of a Mortgaged Vessel or the agreed or compromised total
loss of a Mortgaged Vessel; or (y) the capture, condemnation, confiscation,
requisition, purchase, seizure or forfeiture of, or any taking of title to, a
Mortgaged Vessel.  An Event of Loss shall be deemed to have occurred: (i) in the
event of an actual loss of a Mortgaged Vessel, at the time and on the date of
such loss

 

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or if that is not known at noon Greenwich Mean Time on the date which such
Mortgaged Vessel was last heard from; (ii) in the event of damage which results
in a constructive or compromised or arranged total loss of a Mortgaged Vessel,
at the time and on the date of the event giving rise to such damage; or (iii) in
the case of an event referred to in clause (y) above, at the time and on the
date on which such event is expressed to take effect by the Person making the
same.  Notwithstanding the foregoing, if such Mortgaged Vessel shall have been
returned to Borrower following any event referred to in clause (y) above prior
to the date upon which payment is required to be made under
Section 4.02(c) hereof, no Event of Loss shall be deemed to have occurred by
reason of such event.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.

 

“Existing Indebtedness” shall have the meaning provided in Section 7.20.

 

“Fair Market Value” of any Mortgaged Vessel at any time shall mean the average
of the fair market value of such Mortgaged Vessel on the basis of an individual
charter-free arm’s-length transaction between a willing and able buyer and
seller not under duress as set forth in the appraisals of at least two Approved
Appraisers most recently delivered to, or obtained by, the Administrative Agent
prior to such time pursuant to Sections 8.01(c).

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as in existence on
the Closing Date (and any amended or successor version that is substantively
identical, provided that any such amended or successor version imposes criteria
that are no more onerous than those contained in such Sections as in existence
on the Closing Date) and the regulations promulgated thereunder or published
administrative guidance implementing such Sections.

 

“Federal Funds Rate” shall mean, for any day, an 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 the Administrative Agent in its
sole discretion.

 

“Filed SEC Document” means any SEC Document filed with, or furnished to, the SEC
by the Parent, or incorporated by reference into such document, within the two
(2) year period preceding the date hereof and publicly available prior to the
date of this Agreement.

 

“Financial Covenants” shall mean the covenants set forth in Sections 9.07
through 9.11, inclusive.

 

“Flag Jurisdiction Transfer” shall mean the transfer of the registration and
flag of a Mortgaged Vessel from one Acceptable Flag Jurisdiction to another
Acceptable Flag Jurisdiction, provided that the following conditions are
satisfied with respect to such exchange:

 

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(i)                                     On each Flag Jurisdiction Transfer Date,
the Credit Party which is consummating a Flag Jurisdiction Transfer on such date
shall have duly authorized, executed and delivered, and caused to be recorded in
the appropriate Mortgaged Vessel registry a Vessel Mortgage, substantially in
the form of Exhibit I-1 through I-3, as the case may be (with such modifications
as are required by or appropriate for the Acceptable Flag Jurisdiction, with
respect to the Mortgaged Vessel being transferred (the “Transferred Vessel”) and
the Vessel Mortgage shall be effective to create in favor of the Collateral
Agent and/or the Lenders a legal, valid and enforceable security interest, in
and lien upon such Transferred Vessel, subject only to Permitted Liens.  All
filings, deliveries of instruments and other actions necessary to perfect and
preserve such security interests shall have been duly effected and the
Collateral Agent shall have received evidence thereof in form and substance
reasonably satisfactory to the Required Lenders.

 

(ii)                                  On each Flag Jurisdiction Transfer Date,
the Administrative Agent shall have received from (A) Constantine P.
Georgiopoulos, special New York maritime counsel to each Credit Party (or other
counsel to Borrower and such Credit Parties reasonably satisfactory to the
Required Lenders), an opinion addressed to the Administrative Agent and each of
the Lenders and dated such Flag Jurisdiction Transfer Date, which shall (x) be
substantially in form and substance reasonably acceptable to the Administrative
Agent and the Required Lenders, and (y) cover the recordation of the security
interests granted pursuant to the Vessel Mortgage(s) to be delivered on such
date and such other matters incident thereto as the Administrative Agent or the
Required Lenders may reasonably request and (B) local counsel to the Credit
Parties consummating the relevant Flag Jurisdiction Transfer reasonably
satisfactory to the Required Lenders practicing in those jurisdictions in which
the Transferred Vessel is registered and/or the Credit Party owning such
Transferred Vessel is organized, which opinions shall be addressed to the
Administrative Agent and each of the Lenders and dated such Flag Jurisdiction
Transfer Date, which shall (x) be in form and substance reasonably acceptable to
the Administrative Agent and the Required Lenders and (y) cover the perfection
of the security interests granted pursuant to the Vessel Mortgage(s) and such
other matters incident thereto as the Administrative Agent or the Required
Lenders may reasonably request.

 

(iii)                               On each Flag Jurisdiction Transfer Date:

 

(A)                              The Administrative Agent shall have received
(x) certificates of ownership from appropriate authorities showing (or
confirmation updating previously reviewed certificates and indicating) the
registered ownership of the Transferred Vessel transferred on such date by the
relevant Subsidiary Guarantor and (y) the results of maritime registry searches
with respect to the Transferred Vessel transferred on such date, indicating no
record liens other than Liens in favor of the Collateral Agent and/or the
Lenders and Permitted Liens.

 

(B)                                The Administrative Agent shall have received
a report, in form and scope reasonably satisfactory to the Lenders, from a firm
of independent marine insurance brokers reasonably acceptable to the Required
Lenders with respect to the insurance maintained by the Credit Party in respect
of the Transferred Vessel

 

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transferred on such date, together with a certificate from such broker
certifying that such insurances (x) are placed with such insurance companies
and/or underwriters and/or clubs, in such amounts, against such risks, and in
such form, as are customarily insured against by similarly situated insureds for
the protection of the Administrative Agent and/or the Required Lenders as
mortgagee and (y) conform with the insurance requirements of the respective
Vessel Mortgages.

 

(iv)                              On or prior to each Flag Jurisdiction Transfer
Date, the Administrative Agent shall have received a certificate, dated the Flag
Jurisdiction Transfer Date, signed by the Chairman of the Board, the President,
any Vice President, the Treasurer or an authorized manager, member or general
partner of the Credit Party commencing such Flag Jurisdiction Transfer,
certifying that (A) all necessary governmental (domestic and foreign) and third
party approvals and/or consents in connection with the Flag Jurisdiction
Transfer being consummated on such date and otherwise referred to herein shall
have been obtained and remain in effect, (B) there exists no judgment, order,
injunction or other restraint prohibiting or imposing materially adverse
conditions upon such Flag Jurisdiction Transfer or the other transactions
contemplated by this Agreement and (C) copies of resolutions approving the Flag
Jurisdiction Transfer of such Credit Party and any other matters the
Administrative Agent or the Lenders may reasonably request.

 

“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag
Jurisdiction Transfer occurs.

 

“Foreign Pension Plan” shall mean any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States of America by the Parent or any one or more of its
Subsidiaries primarily for the benefit of employees of the Parent or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

“GAAP” shall have the meaning provided in Section 13.07(a).

 

“Guaranteed Obligations” shall mean the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of, premium, if any, and interest on the Notes issued by, and the
Loans made to, the Borrower under this Agreement, and (y) all other obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness owing by
the Borrower to the Lender Creditors (in the capacities referred to in the
definition of Lender Creditors) under this Agreement and each other Credit
Document to which the Borrower is a party (including, without limitation,
indemnities, fees and interest thereon (including any interest accruing after
the commencement of any bankruptcy, insolvency, receivership or similar
proceeding at the rate provided for in this Agreement, whether or not such
interest is an allowed claim in any such proceeding)), whether now existing or
hereafter incurred under, arising out of or in connection with this Agreement
and any such other Credit Document and the due performance and compliance by the
Borrower with all of the terms, conditions and agreements

 

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contained in all such Credit Documents (all such principal, premium, interest,
liabilities, indebtedness and obligations being herein collectively called the
“Credit Document Obligations”).

 

“Guarantors” shall mean the Parent, Arlington and each Subsidiary Guarantor.

 

“Guaranty” shall mean collectively the Holdings Guaranty and the Subsidiaries
Guaranty.

 

“Hazardous Materials” shall mean: (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous waste,” “hazardous materials,”
“extremely hazardous substances,” “restricted hazardous waste,” “toxic
substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.

 

“Holdings Guaranty” shall mean the guaranty of the Parent and Arlington pursuant
to Section 14.

 

“Indebtedness” shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect of such
letters of credit, (iii) all Indebtedness of the types described in clause (i),
(ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (to the extent of the value of the respective property), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person, and (vii) all obligations under any Interest Rate Protection Agreement,
Other Hedging Agreements or under any similar type of agreement; provided that
Indebtedness shall in any event not include trade payables and expenses accrued
in the ordinary course of business.

 

“Indemnified Taxes” shall have the meaning provided in Section 4.04(a).

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of
the date hereof, by and among the Parent, Arlington, the Borrowers, as borrowers
under this Credit Agreement, General Maritime Subsidiary Corporation II, as
borrower under the 2010 Credit Agreement, General Maritime Subsidiary
Corporation, as borrower under the 2008 Credit Agreement, the Administrative
Agent (for and on behalf of the Secured Creditors), each Subsidiary Guarantor,
the Collateral Agent, the 2010 Agent (for and on behalf of the Secured Creditors
under and as defined in the 2010 Credit Agreement) and the 2008 Agent (for and
on behalf of the Secured Creditors under and as defined in the 2008 Credit
Agreement), which

 

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Intercreditor Agreement (i) shall be substantially in the form of Exhibit P-1
(as amended, modified and/or otherwise supplemented from time to time) and
(ii) shall set forth the priority of the security interests in such portion of
Collateral granted on a first lien basis to the 2010 Agent.

 

“Intercreditor Agreements” shall mean the Intercreditor Agreement and the
Secondary Intercreditor Agreement.

 

“Interest Determination Date” shall mean, with respect to any Loan, the second
Business Day prior to the commencement of any Interest Period relating to such
Loan.

 

“Interest Expense Coverage Ratio” shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest
Expense for such period.

 

“Interest Payment Date” means each March 31, June 30, September 30 and
December 31.  If such Interest Payment Date does not fall on a Business Day,
such Interest Payment Date shall be the immediately succeeding Business Day.

 

“Interest Period” shall mean the period from the Closing Date to, but excluding,
the first Interest Payment Date and thereafter the period from each Interest
Payment Date to, but excluding, the next succeeding Interest Payment Date.

 

“Interest Rate Adjustment Event” shall have the meaning provided in
Section 1.07(c).

 

“Interest Rate Protection Agreement” shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.

 

“Investment Agreement” means that certain Investment Agreement by and between
OCM Marine Investments CTB, Ltd. and Parent, dated as of March 29, 2011, as the
same may be amended, restated, supplemented, waived and/or otherwise modified
from time to time in accordance with the terms thereof.

 

“Investments” shall have the meaning provided in Section 9.05.

 

“Joinder Agreement” shall have the meaning provided in the definition of
“Collateral and Guaranty Requirements.”

 

“Judgment Currency” shall have the meaning provided in Section 14.09(a).

 

“Judgment Currency Conversion Date” shall have the meaning provided in
Section 14.09(a).

 

“Leaseholds” of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

 

“Lender” shall mean each financial institution listed on Schedule I, as well as
any Person which becomes a “Lender” hereunder pursuant to 13.04(b).

 

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“Lender Creditors” shall mean the Lenders, the Collateral Agent and the
Administrative Agent.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).

 

“Loan” shall have the meaning provided in Section 1.01.

 

“Management Agreements” shall have the meaning provided in Section 5.05.

 

“Margin Regulations” shall mean the provisions of Regulations T, U and X of the
Board of Governors of the Federal Reserve System.

 

“Margin Stock” shall have the meaning provided in Regulation U.

 

“Material Adverse Effect” shall mean a material adverse effect on (i) the
business, property, assets, liabilities or condition (financial or otherwise) or
prospects (x) of the Mortgaged Vessels taken as a whole, (y) Borrower, Arlington
and the Subsidiary Guarantors taken as a whole, or (z) the Parent and its
Subsidiaries taken as a whole, (ii) the rights and remedies of the Lenders or
the Administrative Agent or (iii) the ability of the Borrower or the Borrower
and their Subsidiaries, taken as a whole, to perform its or their Obligations.

 

“Maturity Date” shall mean May 6, 2018. If the Maturity Date does not fall on a
Business Day, the Maturity Date shall be the immediately preceding Business Day.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.

 

“Mortgaged Vessels” shall have the meaning provided in Section 5.15.

 

“Multiemployer Plan” shall mean a Plan which is defined in Section 3(37) of
ERISA.

 

“NAIC” shall mean the National Association of Insurance Commissioners (and its
successors from time to time).

 

“Net Cash Proceeds” shall mean, (x) with respect to any Collateral Disposition,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Collateral
Disposition, other than the portion of such deferred payment constituting
interest, but only as and when received) received by the Parent or the Borrower
or any of their respective Subsidiaries from such Collateral Disposition net of
(i) reasonable transaction costs (including, without limitation, reasonable
attorney’s fees) and sales commissions and (ii) the estimated marginal increase
in income taxes and any stamp tax payable by the Parent, the Borrower or any of
its Subsidiaries as a result of such Collateral Disposition and (y) with respect
to the issuance of any Equity Interests, the aggregate cash

 

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proceeds received by the Parent from such equity issuance net of reasonable
transaction costs related thereto (including, without limitation, reasonable
attorney’s fees).

 

“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital
in excess of par or stated value of shares of its capital stock, retained
earnings and any other account which, in accordance with GAAP, constitutes
stockholders’ equity, but excluding treasury stock, any Vessel impairments
treated as “Asset Impairments” under GAAP and the effect of any impairment of
goodwill incurred in the fourth fiscal quarter of the Parent in 2010.

 

“Non-Recourse Default” shall mean (i) a default by such Non-Recourse Subsidiary
in any payment of any Non-Recourse Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Non-Recourse
Indebtedness was created or (ii) a Non-Recourse Subsidiary shall default in the
observance or performance of any agreement or condition relating to any
Non-Recourse Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Non-Recourse Indebtedness (or
a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Non-Recourse
Indebtedness to become due prior to its stated maturity or (iii) any
Non-Recourse Indebtedness 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.

 

“Non-Recourse Indebtedness” shall mean any Indebtedness of a Non-Recourse
Subsidiary that is non-recourse to any Credit Party and for which no Credit
Party provides any credit support; provided such Indebtedness may be full
recourse to the Non-Recourse Subsidiary.

 

“Non-Recourse Subsidiary” shall mean any Subsidiary of the Parent which has been
designated by the Parent as an “Unrestricted Subsidiary” under, as defined in
and in accordance with the Senior Unsecured Note Documents and in an officer’s
certificate delivered to the Administrative Agent; provided that (i) neither the
Parent nor any subsidiary of the Parent shall have any liability or recourse
with respect to any Non-Recourse Indebtedness of such Non-Recourse Subsidiary,
(ii) any such designation of a Subsidiary as a “Non-Recourse Subsidiary” shall
be deemed to be a permanent “Investment” in such Subsidiary in an amount
(proportionate to the Parent’s Equity Interest (directly or through a Subsidiary
thereof) in such Subsidiary) equal to the fair market value of the net assets of
such Subsidiary at the time such Subsidiary is designated a Non-Recourse
Subsidiary and (iii) for the avoidance of doubt, Investments in Non-Recourse
Subsidiaries may only be made pursuant to Section 9.05(k).

 

“Note” shall have the meaning provided in Section 1.05(a).

 

“Notice of Borrowing” shall have the meaning provided in Section 1.03.

 

“Notice Office” shall mean the office of the Administrative Agent located at 333
South Grand Ave., 28th Floor, Los Angeles, CA 90071, c/o Oaktree Capital
Management, L.P., Attn: Amy Rice, facsimile: (213) 830-6394, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.

 

“Obligation Currency” shall have the meaning provided in Section 14.09(a).

 

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“Obligations” shall mean all amounts owing to the Administrative Agent, the
Collateral Agent or any Lender pursuant to the terms of this Agreement or any
other Credit Document.

 

“OPA” shall mean the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et
seq.

 

“Other Hedging Agreement” shall mean any foreign exchange contracts, currency
swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.

 

“Parent” shall have the meaning provided in the preamble.

 

“Parent Stock” shall mean any shares of any class of the capital stock or
membership interests (including, without limitation, common stock) of the Parent
outstanding on or after the Closing Date or any options or warrants issued with
respect to the foregoing.

 

“PATRIOT Act” shall have the meaning provided in Section 13.21.

 

“Payment Office” shall mean the office of the Administrative Agent located at
333 South Grand Ave., 28th Floor, Los Angeles, CA 90071, c/o Oaktree Capital
Management, L.P., Attn: Amy Rice, or such other office as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Amount” shall mean $75,000,000 minus (i) all Net Cash Proceeds from
Collateral Dispositions of Collateral Vessels that (x) are not required to be
applied to the repayment of the Senior Credit Facilities pursuant to
Section 5.02(d) of the 2008 Credit Agreement and/or Section 4.02(c) of the 2010
Credit Agreement but are required to be applied to repay and reduce the Loan
pursuant to Section 4.02(a) but for the application of clause (I) to the first
proviso to said Section 4.02(a) (it being acknowledged that any reduction in
amounts otherwise required to be applied to repay and reduce the Loan pursuant
to Section 4.02(a) pursuant to clause (I) to the first proviso to said
Section 4.02(a) may only be made (1) if an Event of Default has occurred and is
continuing but the Parent and the Borrowers are in compliance with Section 9.09
hereof or (2) if no Event of Default has occurred and is continuing), and (ii)
the aggregate principal amount of Indebtedness incurred under Section 9.04(vii).

 

“Permitted Encumbrance” shall mean easements, rights-of-way, restrictions,
encroachments, exceptions to title and other similar charges or encumbrances on
any Mortgaged Vessel or any other property of the Parent or any of its
Subsidiaries arising in the ordinary course of business which do not materially
detract from the value of such Mortgaged Vessel or the property subject thereto.

 

“Permitted Holders” shall mean (i) Peter Georgiopoulos (including his immediate
family members and trusts for his benefit and/or the benefit of his immediate
family members) and any corporation or other entity directly Controlled by Peter
Georgiopoulos and (ii) funds and segregated accounts managed by Oaktree Capital
Management, L.P. and any corporation or other

 

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entity directly or indirectly controlled or managed by Oaktree Capital
Management, L.P. or its managed funds.

 

“Permitted Liens” shall have the meaning provided in Section 9.01.

 

“Person” shall mean any individual, partnership, limited liability company,
joint venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

 

“Plan” shall mean any pension plan as defined in Section 3(2) of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of) the Parent or a Subsidiary of the Parent or any ERISA Affiliate,
and each such plan for the five-year period immediately following the latest
date on which the Parent, or a Subsidiary of the Parent or any ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.

 

“Pledge Agreement” shall have the meaning provided in the definition of
“Collateral and Guaranty Requirements.”

 

“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the
Pledge Agreement.

 

“Pledged Securities” shall mean “Securities” as defined in the Pledge Agreement
pledged (or required to be pledged) pursuant thereto.

 

“Prime Rate” shall mean the Federal bank prime rate announced from time to time
on Bloomberg, the Prime Rate to change when and as such rate changes.  The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.

 

“Principal Reduction” shall mean permanent reductions of the outstanding
principal amount and commitments whether by virtue of voluntary, scheduled or
mandatory reductions.

 

“Projections” shall mean the Parent’s forecasted consolidated and
consolidating:  (a) balance sheets; (b) profit and loss statements; (c) cash
flow statements and (d) capitalization statements, all prepared on a Subsidiary
by Subsidiary basis and based upon good faith estimates and assumptions believed
by the Parent to be reasonable at the time made, together with appropriate
supporting details and a statement of underlying assumptions.

 

“Qualified Preferred Stock” shall mean any preferred stock so long as the terms
of any such preferred stock (i) are not convertible or exchangeable into
Indebtedness, (ii) do not provide any collateral security, (iii) do not provide
any guaranty or other support by the Parent or any Subsidiary, (iv) do not
contain any mandatory put, redemption, repayment, sinking fund or other similar
provision occurring prior to one year after the Maturity Date, (v) do not
require the cash payment of dividends, (vi) do not contain any covenants other
than periodic reporting requirements, (vii) do not grant the holder thereof any
voting rights except for voting rights on fundamental matters such as mergers,
consolidations, sales of all or substantially all of the assets of the issuer
thereof, or liquidations involving the issuer thereof and other voting rights
which

 

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holders of common stock may have and (ix) any other preferred stock that
satisfies (i) and (vi) of this definition of Qualified Preferred Stock and that
is otherwise issuable or may be distributed pursuant to a shareholders’ rights
plan of the Parent; provided however, any Dividend or similar feature of such
Qualified Preferred Stock shall only be declared and paid in accordance with
Section 9.03 of this Agreement.

 

“Qualified Stock Issuance” means one or more issuances by Parent of common stock
and/or preferred stock convertible into common stock (i) consummated, in the
case of issuances of common stock, during the period commencing immediately
after March 17, 2011, and in the case of preferred stock, during the period
commencing immediately after the Closing Date, and in each case, ending on the
second anniversary of the Closing Date, (ii) at least $50,000,000 of the
aggregate proceeds from which are used to pay amounts outstanding under the
Senior Credit Facilities, (iii) with respect to which Shareholder Approval, if
necessary, is obtained, (iv) concurrently with which (for transactions after the
Closing Date) the related additional Warrants, if any, have been issued in
accordance with the terms of the Warrant, and (v) in the case of preferred
stock, which constitutes Qualified Preferred Stock which has a maximum yield no
greater than eight percent (8%), compounded annually, on the unreturned capital
(including accrued but unpaid yield) with respect thereto.

 

“Real Property” of any Person shall mean all the right, title and interest of
such Person in and to land, improvements and fixtures, including Leaseholds.

 

“Refinancing” shall have the meaning provided in Section 5.13.

 

“Register” shall have the meaning provided in Section 13.17.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the Closing Date, by and among the Parent and Peter C. Georgiopoulos,
among others.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

 

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .22, .23,
.25, .27 or .28 of PBGC Regulation Section 4043.

 

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“Required Lenders” shall mean Lenders holding an amount greater than 50% of the
outstanding principal amount of the Loans.

 

“Returns” shall have the meaning provided in Section 7.09.

 

“S&P” shall mean Standard & Poor’s Financial Services LLC and its successors.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” shall mean all material reports, schedules, forms, statements
and other documents with the SEC required to be filed by the Parent pursuant to
the Securities Act or the Exchange Act since January 1, 2008.

 

“Secondary Intercreditor Agreement” shall mean the Intercreditor Agreement,
dated as of the date hereof, by and among the Parent, the Borrowers, as
borrowers under this Credit Agreement, General Maritime Subsidiary II
Corporation, as borrower under the 2010 Credit Agreement, the General Maritime
Subsidiary, as borrower under the 2008 Credit Agreement, the Administrative
Agent (for and on behalf of the Secured Creditors), the Collateral Agent, the
2010 Agent (for and on behalf of the Secured Creditors under and as defined in
the 2010 Credit Agreement) and 2008 Agent (for and on behalf of the Secured
Creditors under and as defined in the 2008 Credit Agreement), which
Intercreditor Agreement (i) shall be substantially in the form of Exhibit P-2
(as amended, modified and/or otherwise supplemented from time to time) and
(ii) shall set forth the priority of the security interests in such portion of
the Collateral granted on a first lien basis to the 2008 Agent.

 

“Secured Creditors” shall mean the “Secured Creditors” as defined in the
Security Documents.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Security Documents” shall mean each Pledge Agreement, each Assignment of
Earnings, each Assignment of Insurances, each Vessel Mortgage and, after the
execution and delivery thereof, each additional security document executed
pursuant to Section 8.12.

 

“Senior Credit Facilities” shall mean the credit facilities evidenced by the
Senior Credit Facilities Documents.

 

“Senior Credit Facilities Documents” shall mean (a) the 2010 Credit Agreement
and all “Credit Documents” as defined therein and all other security agreements,
mortgages and other documents related thereto, (b) the 2008 Credit Agreement and
all “Credit Documents” as defined therein and all other security agreements,
mortgages and other documents related thereto and (c) any credit agreement that
refinances Indebtedness under the 2010 Credit Agreement or the 2008 Credit
Agreement.

 

“Senior Debt Documents” shall mean Senior Credit Facilities Documents and Senior
Unsecured Note Documents.

 

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“Senior Unsecured Note Documents” shall mean the Senior Unsecured Note
Indenture, the Senior Unsecured Notes and the guarantees delivered in connection
with the Senior Unsecured Notes, as the same may be amended, restated,
supplemented, waived and/or otherwise modified from time to time in accordance
with the terms thereof and of this Agreement.

 

“Senior Unsecured Note Indenture” shall mean the indenture entered into by the
Parent, certain of its Subsidiaries and The Bank of New York Mellon, as trustee,
in connection with the issuance of the Senior Unsecured Notes, as the same may
be amended, restated, supplemented, waived and/or otherwise modified from time
to time in accordance the terms thereof and of this Agreement.

 

“Senior Unsecured Notes” shall mean the 12% senior unsecured notes of the Parent
due 2017 issued pursuant to the Senior Unsecured Note Indenture.

 

“Shareholder Approval” shall mean approval from the stockholders of the Parent
for an Adjustment Event and/or Issuance.

 

“Shareholder Payment” shall mean, with respect to any Person any Dividends with
respect to such Person.

 

“Side Letter” shall mean the Side Letter, dated as of March 29, 2011, by and
among the Parent, OCM Marine Investments CTB, Ltd. and others.

 

“Significant Default” shall mean any Event of Default pursuant to Section 9.03
with respect to any failure to comply with the Financial Covenants, any Default
or Event of Default pursuant to Section 10.01 or 10.05 or any event of default
under Section 11.01 of the 2008 Credit Agreement or Section 10.01 of the 2010
Credit Agreement, regardless of whether such default was waived or amended.

 

“Specified Requirements” shall mean the requirements set forth in clauses (i),
(ii), (iii), (vi), (viii)(a), (viii)(b), (viii)(c) and (viii)(f) of the
definition of “Collateral and Guaranty Requirements.”

 

“Standstill Period” shall mean the periods described in Sections 3(i)(I)(y),
3(i)(I)(x), 3(i)(II)(x) or 3(i)(II)(z) of the Intercreditor Agreements, as the
context may require.

 

“Stock Buy-Back” shall mean, with respect to any Person, that such Person or any
Subsidiary of such Person shall have redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration (other than common stock,
Qualified Preferred Stock or the right to purchase any such stock of such
Person), any shares of any class of its capital stock or membership interests
outstanding on or after the Closing Date (or any options or warrants issued by
such Persons with respect to its capital stock) (including Parent Stock).

 

“Subsidiaries Guaranty” shall have the meaning provided in the definition of
“Collateral and Guaranty Requirements”.

 

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a

 

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majority of the directors of such corporation (irrespective of whether or not at
the time stock of any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
owned by such Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person has
more than a 50% equity interest at the time.

 

“Subsidiary Guarantor” shall mean (other than Borrower and Arlington) (x) each
direct and indirect Subsidiary of the Parent that owns a Mortgaged Vessel or
which owns, directly or indirectly, any of the capital stock of such direct or
indirect Subsidiary, (y) to the extent not otherwise captured in clause
(x) hereof, (i) each “Restricted Subsidiary” under and as defined in the Senior
Unsecured Note Indenture, subject to Section 8.16 hereof and (ii) each other
subsidiary of the Parent that guarantees the Senior Unsecured Notes, and
(z) each guarantor under the Senior Credit Facilities.  The Subsidiary
Guarantors as of the Effective Date are listed on Schedule VIII.

 

“Tax Benefit” shall have the meaning provided in Section 4.04(c)

 

“Taxes” shall have the meaning provided in Section 4.04(a).

 

“Test Period” shall mean each period of four consecutive fiscal quarters then
last ended, in each case taken as one accounting period.

 

“Total Leverage Ratio” shall mean, at any date of determination, the ratio of
Consolidated Net Indebtedness of the Parent and its Subsidiaries on such date to
Consolidated Total Capitalization of the Parent and its Subsidiaries on such
date.

 

“Transaction” shall mean, collectively, (i) the entering into of this Agreement
and the other Credit Documents, as applicable, on the Closing Date and the
incurrence of Loans hereunder, (ii) the repayment of loans and reduction of the
total commitments under, and the amendment and restatement of, the 2010 Credit
Agreement and the other credit documents related thereto, as applicable, on the
Closing Date, (iii) the repayment of loans and reduction of the total
commitments under, and the amendment and restatement of, the 2008 Credit
Agreement and the other credit documents related thereto, as applicable, on the
Closing Date and (iv) the payment of all fees and expenses in connection with
the foregoing.

 

“Transaction Expenses” means all fees, costs and expenses incurred by or on
behalf of a party in anticipation of, in connection with, or otherwise related
to, the transaction contemplated herein (including all of the fees, expenses and
other costs of legal counsel, investment bankers, brokers, accountants and other
representatives and consultants and any amounts paid in connection with
obtaining any consents of governmental authorities or third parties).

 

“Transferred Vessel” shall have the meaning provided in the definition of “Flag
Jurisdiction Transfer” in this Section 11.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.

 

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“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the value of the accumulated plan benefits under the Plan determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

 

“United States” and “U.S.” shall each mean the United States of America.

 

“Unrestricted Cash and Cash Equivalents” shall mean, when referring to cash or
Cash Equivalents of the Parent or any of its Subsidiaries, that such cash or
Cash Equivalents (i) does not appear (or would not be required to appear) as
“restricted” on a consolidated balance sheet of the Parent or of any such
Subsidiary, (ii) are not subject to any Lien in favor of any Person other than
the Collateral Agent for the benefit of the Secured Creditors, the 2010 Agent
for the benefit of the Secured Creditors under and as defined in the 2010 Credit
Agreement and the 2008 Agent for the benefit of the Secured Creditors under and
as defined in the 2008 Credit Agreement or (iii) are otherwise generally
available for use by the Parent or such Subsidiary.

 

“Vessel” shall mean, collectively, all sea going vessels and tankers at any time
owned by the Parent and its Subsidiaries, and, individually, any of such
vessels.

 

“Vessel Exchange” shall mean the exchange of a 2010 Mortgaged Vessel for a
Vessel which Vessel shall constitute an Acceptable Replacement Vessel; provided
that, in each case, the following conditions are satisfied with respect to such
exchange:

 

(i)                                 On the Vessel Exchange Date, if the
Subsidiary owning the Acceptable Replacement Vessel is not a Credit Party,
(A) such Subsidiary shall (1) grant to the Collateral Agent a Lien (subject only
to Permitted Liens) on all property of such Subsidiary by executing and
delivering a counterpart of the Pledge Agreement, taking all actions required
pursuant to the applicable section of the Pledge Agreement to become a Pledgor
thereunder, and taking any other action reasonably requested by the
Administrative Agent and (2) execute and deliver a counterpart of the
Subsidiaries Guaranty and (B) the Parent shall pledge and deliver, or cause to
be pledged and delivered, all of the capital stock of such Subsidiary owned by
any Credit Party to the Collateral Agent.

 

(ii)                                  On the applicable Vessel Exchange Date,
the Administrative Agent shall have received from (A) Constantine P.
Georgiopoulos, special New York maritime counsel to Borrower and each Credit
Party (or other counsel to Borrower and such Credit Parties reasonably
satisfactory to the Required Lenders), an opinion addressed to the
Administrative Agent and each of the Lenders and dated such Vessel Exchange
Date, which shall (x) be in form and substance reasonably acceptable to the
Administrative Agent and the Required Lenders and (y) cover the recordation of
the security interests granted pursuant to the Vessel Mortgage(s) to be
delivered on such date and such other matters incident thereto as the
Administrative Agent or the Lenders may reasonably request and (B) local counsel
to the Credit Parties consummating the relevant Vessel Exchange reasonably
satisfactory to the Lenders practicing in those jurisdictions in which

 

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the Acceptable Replacement Vessel is registered and/or the Credit Party owning
such Acceptable Replacement Vessel is organized, which opinions shall be
addressed to the Administrative Agent and each of the Lenders and dated such
Vessel Exchange Date, which shall (x) be in form and substance reasonably
acceptable to the Administrative Agent and the Required Lenders and (y) cover
the perfection of the security interests granted pursuant to the Vessel
Mortgage(s) and such other matters incident thereto as the Administrative Agent
or the Lenders may reasonably request.

 

(iii)                               On or prior to the Vessel Exchange Date, the
Credit Party which is consummating a Vessel Exchange on such date shall have
satisfied the Collateral and Guaranty Requirements with respect to such Vessel;

 

(iv)                              On or prior to the Vessel Exchange Date,
Schedule III shall be updated with the name, registered owner (which shall be a
Subsidiary Guarantor), official number, and jurisdiction of registration and
flag (which shall be an Acceptable Flag Jurisdiction) of the Acceptable
Replacement Vessel; and

 

(v)                                 All filings, deliveries of instruments and
other actions necessary or desirable in the reasonable opinion of the Collateral
Agent to perfect and preserve such security interests shall have been duly
effected and the Collateral Agent shall have received evidence thereof in form
and substance reasonably satisfactory to the Lenders.

 

“Vessel Exchange Date” shall mean each date on which a Vessel Exchange occurs.

 

“Vessel Mortgages” shall have the meaning set forth in Section 5.15.

 

“Warrant Exercise Shares” means shares of common stock issued upon the exercise
of the Warrants.

 

“Warrants” has the meaning set forth on the Investment Agreement.

 

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any corporation 100%
of whose capital stock (other than director’s qualifying shares) is at the time
owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person
and (ii) any partnership, limited liability company, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.

 

SECTION 12 - AGENCY AND SECURITY TRUSTEE PROVISIONS.

 

12.01                     Appointment.  (a) The Lenders hereby designate OCM
Administrative Agent, LLC, as Administrative Agent to act as specified herein
and in the other Credit Documents (for the avoidance of doubt, for purposes of
this Section 12, the term “Administrative Agent” shall include OCM
Administrative Agent, LLC (and/or any of its affiliates) in its capacity as
Collateral Agent pursuant to the Security Documents and as security trustee
pursuant to the Vessel Mortgages).  Each Lender hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Agents to take such action on its behalf under the
provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers

 

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and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agents by the terms hereof and thereof and such
other powers as are reasonably incidental thereto.  The Agents may perform any
of its duties hereunder by or through its respective officers, directors,
agents, employees or affiliates and, may assign from time to time any or all of
its rights, duties and obligations hereunder and under the Security Documents to
any of its banking affiliates. Notwithstanding anything else contained herein,
(i) any notice provided to the Administrative Agent pursuant to this Agreement
shall also be provided to the Lenders at the address set forth in the definition
of “Notice Office” and (ii) any provision herein that must be “reasonably
satisfactory” (or any derivation thereof) to the Administrative Agent will also
be deemed to mean that such provision must also be “reasonably satisfactory” (or
any derivation thereof) to the Required Lenders (but any provision herein that
must be satisfactory to the Administrative Agent on the Closing Date will be
deemed to mean such provision must also be reasonably satisfactory to the
Lenders on the Closing Date).

 

(b)                                 The Lenders hereby irrevocably appoint OCM
Administrative Agent, LLC as security trustee solely for the purpose of holding
legal title to the Vessel Mortgages on each of the flag vessels of Acceptable
Flag Jurisdiction on behalf of the applicable Lenders, from time to time, with
regard to the (i) security, powers, rights, titles, benefits and interests (both
present and future) constituted by and conferred on the Lenders or any of them
or for the benefit thereof under or pursuant to the Vessel Mortgages (including,
without limitation, the benefit of all covenants, undertakings, representations,
warranties and obligations given, made or undertaken by any Lender in the Vessel
Mortgages), (ii) all money, property and other assets paid or transferred to or
vested in any Lender or any agent of any Lender or received or recovered by any
Lender or any agent of any Lender pursuant to, or in connection with the Vessel
Mortgages, whether from Borrower or any Subsidiary Guarantor or any other person
and (iii) all money, investments, property and other assets at any time
representing or deriving from any of the foregoing, including all interest,
income and other sums at any time received or receivable by any Lender or any
agent of any Lender in respect of the same (or any part thereof).  OCM
Administrative Agent, LLC accepts such appointment as security trustee.

 

12.02                     Nature of Duties.  The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents.  None of the Agents nor any of their respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by such Person’s gross
negligence or willful misconduct (any such liability limited to the applicable
Agent to whom such Person relates).  The duties of each of the Agents shall be
mechanical and administrative in nature; none of the Agents shall have by reason
of this Agreement or any other Credit Document any fiduciary relationship in
respect of any Lender or the holder of any Note; and nothing in this Agreement
or any other Credit Document, expressed or implied, is intended to or shall be
so construed as to impose upon any Agents any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein.

 

12.03                     Lack of Reliance on the Agents.  Independently and
without reliance upon the Agents, each Lender and the holder of each Note, to
the extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Parent
and its Subsidiaries in connection with the making and the continuance

 

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of the Loans and the taking or not taking of any action in connection herewith
and (ii) its own appraisal of the creditworthiness of the Parent and its
Subsidiaries and, except as expressly provided in this Agreement, none of the
Agents shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter. 
None of the Agents shall be responsible to any Lender or the holder of any Note
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the Parent
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of the Parent
and its Subsidiaries or the existence or possible existence of any Default or
Event of Default.

 

12.04                     Certain Rights of the Agents.  If any of the Agents
shall request instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Agents shall be entitled to refrain from such act or taking
such action unless and until the Agents shall have received instructions from
the Required Lenders; and the Agents shall not incur liability to any Person by
reason of so refraining.  Without limiting the foregoing, no Lender or the
holder of any Note shall have any right of action whatsoever against the Agents
as a result of any of the Agents acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Lenders.

 

12.05                     Reliance.  Each of the Agents shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the applicable Agent believed to be the
proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Administrative Agent.

 

12.06                     Indemnification.  To the extent any of the Agents is
not reimbursed and indemnified by Borrower, the Lenders will reimburse and
indemnify the applicable Agents and their respective officers, directors,
employers and agents, in proportion to their respective “percentages” as used in
determining the Required Lenders, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agents in performing their respective
duties hereunder or under any other Credit Document, in any way relating to or
arising out of this Agreement or any other Credit Document (including, but not
limited to, reasonable attorneys’ fees and expenses); provided that no Lender
shall be liable in respect to an Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a final
non-appealable order.

 

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12.07                     The Administrative Agent in its Individual Capacity. 
With respect to its obligation to make Loans under this Agreement, each of the
Agents shall have the rights and powers specified herein for a “Lender” and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term “Lenders,” “Secured Creditors”, “Required
Lenders”, “holders of Notes” or any similar terms shall, unless the context
clearly otherwise indicates, include each of the Agents in their respective
individual capacity.  Each of the Agents may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
any Credit Party or any Affiliate of any Credit Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Borrower or any other Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Lenders.

 

12.08                     Holders.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent.  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, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.

 

12.09                     Resignation by the Administrative Agent.  (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days’ prior written notice to Borrower and the Lenders.  Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.

 

(b)                                 Upon any such notice of resignation by the
Administrative Agent, the Required Lenders shall appoint a successor
Administrative Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to Borrower.

 

(c)                                  If a successor Administrative Agent shall
not have been so appointed within such 15 Business Day period, the
Administrative Agent, with the consent of Borrower, shall then appoint a
commercial bank or trust company with capital and surplus of not less than
$500,000,000 as successor Administrative Agent who shall serve as Administrative
Agent hereunder or thereunder until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above with the consent of
the Borrower; provided that any consent of Borrower under this
Section 12.09(c) shall not be unreasonably withheld or delayed and shall not be
required if an Event of Default has occurred and is continuing at such time.

 

(d)                                 If no successor Administrative Agent has
been appointed pursuant to clause (b) or (c) above by the 25th Business Day
after the date such notice of resignation was given by the Administrative Agent,
the Administrative Agent’s resignation shall become effective and the Required
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.

 

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12.10                     Exculpation.  (a) Neither Agents nor any of their
respective directors, officers, employees or agents shall be liable to any
Secured Creditor for any action taken or omitted to be taken by it under any
Credit Document, or in connection therewith, except for its own willful
misconduct or gross negligence as determined by a court of competent
jurisdiction in a final, non-appealable order, nor responsible for any recitals
or warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of any Credit Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Credit
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by any Credit Party of its Obligations.  Any such inquiry which may
be made by any Agent shall not obligate it to make any further inquiry or to
take any action.  The Agents shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement or
writing which the such Agent believes to be genuine and to have been presented
by a proper Person.

 

(b)                                 To the fullest extent permitted by
applicable law, no Credit Party or Lender shall assert, and each Credit Party
and Lender hereby waives, any claim against any Agent, its sub-agents and their
respective Affiliates in respect of any actions taken or omitted to be taken by
any of them, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Credit Document or
any agreement or instrument contemplated herby or thereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

 

(c)                                  No provision of this Agreement or any other
Credit Document or any agreement or instrument contemplated hereby or thereby or
the transactions contemplated hereby or thereby, shall require any Agent to:
(i) expend or risk its own funds or provide indemnities in the performance of
any of its duties hereunder or the exercise of any of its rights or power or
(ii) otherwise incur any financial liability in the performance of its duties or
the exercise of any of its rights or powers unless it is indemnified to its
satisfaction and the Agent shall have no liability to any person for any loss
occasioned by any delay in taking or failure to take any action while it is
awaiting an indemnity satisfactory to it.

 

(d)                                 No Agent shall be responsible for
(i) perfecting, maintaining, monitoring, preserving or protecting the security
interest or lien granted under this Agreement, any other Credit Document or any
agreement or instrument contemplated hereby or thereby, (ii) the filing,
re-filing, recording, re-recording or continuing or any document, financing
statement, mortgage, assignment, notice, instrument of further assurance or
other instrument in any public office at any time or times or (iii) providing,
maintaining, monitoring or preserving insurance on or the payment of taxes with
respect to any of the Collateral.

 

(e)                                  No Agent shall be required to qualify in
any jurisdiction in which it is not presently qualified to perform its
obligations as Administrative Agent or Collateral Agent, as applicable.

 

(f)                                    Each Agent has accepted and is bound by
the Credit Documents executed by such Agent as of the date of this Agreement
and, as directed in writing by the Required Lenders, each Agent shall execute
additional Credit Documents delivered to it after the date of

 

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this Agreement; provided, however, that such additional Credit Documents do not
adversely affect the rights, privileges, benefits and immunities of such Agent.
Each Agent will not otherwise be bound by, or be held obligated by, the
provisions of any credit agreement, indenture or other agreement governing the
Obligations (other than this Agreement and the other Credit Documents to which
such Agent is a party).

 

(g)                                 No written direction given to any Agent by
the Required Lenders or the Borrower that in the sole reasonable judgment of
such Agent imposes, purports to impose or might reasonably be expected to impose
upon such Agent any obligation or liability not set forth in or arising under
this Agreement and the other Credit Documents will be binding upon such Agent
unless such Agent elects, at its sole option, to accept such direction.

 

(h)                                 No Agent shall be responsible or liable for
any failure or delay in the performance of its obligations under this Agreement
or the other Credit Documents arising out of or caused, directly or indirectly,
by circumstances beyond its reasonable control, including, without limitation,
acts of God; earthquakes; fire; flood; terrorism; wars and other military
disturbances; sabotage; epidemics; riots; business interruptions; loss or
malfunctions of utilities, computer (hardware or software) or communication
services; accidents; labor disputes; acts of civil or military authority and
governmental action.

 

(i)                                     No Agent shall be under any obligation
to exercise any of its rights or powers vested in it by this Agreement or the
other Credit Documents, at the request, order or direction of the Required
Lenders unless the same is given pursuant to the express provisions of this
Agreement or the other Credit Documents and the Required Lenders shall have
offered to such Agent security or indemnity reasonably satisfactory to such
Agent against the costs, expenses and liabilities (including, without
limitation, attorneys’ fees and expenses) which might be incurred therein or
thereby.

 

(j)                                     Each Agent may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, accountants, appraisers or other experts or advisors
selected by it in good faith as it may reasonably require and will not be
responsible for any misconduct or negligence on the part of any of them.

 

(k)                                  Beyond the exercise of reasonable care in
the custody of the Collateral in its possession, no Agent will have any duty as
to any Collateral in its possession or control or in the possession or control
of any agent or bailee or any income thereon or as to preservation of rights
against prior parties or any other rights pertaining thereto. Each Agent will be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and no Agent will be liable or responsible
for any loss or diminution in the value of any of the Collateral by reason of
the act or omission of any carrier, forwarding agency or other agent or bailee
selected by such Agent in good faith without gross negligence or willful
misconduct.

 

(l)                                     No Agent will be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross

 

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negligence or willful misconduct on the part of such Agent, as determined by a
court of competent jurisdiction in a final, nonappealable order, for the
validity or sufficiency of the Collateral or any agreement or assignment
contained therein, for the validity of the title of any grantor to the
Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of
the Collateral. Each Agent hereby disclaims any representation or warranty to
the present and future Secured Creditors concerning the perfection of the Liens
granted hereunder or in the value of any of the Collateral.

 

(m)                               In the event that any Agent is required to
acquire title to an asset for any reason, or take any managerial action of any
kind in regard thereto, in order to carry out any fiduciary or trust obligation
for the benefit of another, which in such Agent’s sole reasonable discretion may
cause such Agent to be considered an “owner or operator” under any environmental
laws or otherwise cause such Agent to incur, or be exposed to, any environmental
liability or any liability under any other federal, state or local law, such
Agent reserves the right, instead of taking such action, either to resign as
Administrative Agent or Collateral Agent, as applicable, or to arrange for the
transfer of the title or control of the asset to a court appointed receiver. No
Agent will be liable to any person for any environmental liability or any
environmental claims or contribution actions under any federal, state or local
law, rule or regulation by reason of such Agent’s actions and conduct as
authorized, empowered and directed hereunder or relating to any kind of
discharge or release or threatened discharge or release of any hazardous
materials into the environment.

 

(n)                                 Each of the parties hereto hereby agrees
that the Collateral Agent shall be afforded all of the rights, privileges,
protections and immunities afforded to the Administrative Agent under this
Agreement in connection with the execution and performance by the Collateral
Agent of its obligations under each of the Credit Documents.

 

SECTION 13 - MISCELLANEOUS.

 

13.01                     Payment of Expenses, etc.  Borrower agrees that it
shall:  (i) whether or not the transactions herein contemplated are consummated,
pay all reasonable out-of-pocket costs and expenses of each of the Agents and
Lenders (including, without limitation, the reasonable fees and disbursements of
Kirkland & Ellis LLP and other counsel to the Administrative Agent and the
Lenders and local counsel) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agents and Lenders in connection with their
respective syndication efforts with respect to this Agreement and of the Agents
and each of the Lenders in connection with the enforcement of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) for each of the Agents and
for each of the Lenders); (ii) pay and hold each of the Administrative Agent and
the Lenders harmless from and against any and all present and future stamp,
documentary, transfer, sales and use, value added, excise and other similar
Taxes with respect to the foregoing matters and save each of the Administrative
agent and the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to the Administrative Agent or such

 

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Lender) to pay such Taxes; and (iii) indemnify the Agents, the Collateral Agent
and each Lender, and each of their respective officers, directors, trustees,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses, Taxes and disbursements (including reasonable attorneys’ and
consultants’ fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (x) any investigation, litigation or other proceeding (whether or not
any of the Agents, the Collateral Agent or any Lender is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein, or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (y) the actual or alleged presence of Hazardous Materials
on any Vessel or in the air, surface water or groundwater or on the surface or
subsurface of any property at any time owned or operated by the Parent or any of
its Subsidiaries, the generation, storage, transportation, handling, disposal or
Environmental Release of Hazardous Materials at any location, whether or not
owned or operated by the Parent or any of its Subsidiaries, the non-compliance
of any Vessel or property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Vessel or property, or any Environmental Claim asserted against Borrower,
any of its Subsidiaries or any Vessel or property at any time owned or operated
by the Parent or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages,
penalties, actions, judgments, suits, costs, disbursements or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified as determined by a court of competent jurisdiction in a
final, non-appealable order).  To the extent that the undertaking to indemnify,
pay or hold harmless each of the Agents or any Lender set forth in the preceding
sentence may be unenforceable because it violates any law or public policy,
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.

 

13.02                     Right of Setoff.  In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to any
Subsidiary or Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Lender (including, without limitation, by branches and agencies of such
Lender wherever located) to or for the credit or the account of Borrower or any
Subsidiary but in any event excluding assets held in trust for any such Person
against and on account of the Obligations and liabilities of the Parent or such
Subsidiary, as applicable, to such Lender under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations purchased by such Lender pursuant to Section 13.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.

 

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13.03                     Notices.  Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telexed, e-mail or telecopier communication) and mailed,
telexed, telecopied or delivered:  if to any Credit Party, at the address
specified under its signature below; if to any Lender, at its address specified
opposite its name on Schedule II below, with a copy to Samantha Good, c/o
Kirkland & Ellis LLP, 333 South Grand Avenue, 28th Floor, Los Angeles,
California 90071, Facsimile (213) 808-8104; and if to the Administrative Agent,
at its Notice Office; or, as to any other Credit Party, at such other address as
shall be designated by such party in a written notice to the other parties
hereto and, as to each Lender, at such other address as shall be designated by
such Lender in a written notice to Borrower and the Administrative Agent.  All
such notices and communications shall, (i) when mailed, be effective three
Business Days after being deposited in the mails, prepaid and properly addressed
for delivery, (ii) when sent by overnight courier, be effective one Business Day
after delivery to the overnight courier prepaid and properly addressed for
delivery on such next Business Day, or (iii) when sent by telex, e-mail or
telecopier, be effective when sent by telex, e-mail or telecopier, except that
notices and communications to the Administrative Agent shall not be effective
until received by the Administrative Agent.

 

13.04                     Benefit of Agreement.  (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that (i) no
Credit Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written consent
of the Lenders, (ii) although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a “Lender” for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
“Lender” hereunder and (iii) no Lender shall transfer or grant any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (x) extend the final scheduled maturity of any Loan or
Note in which such participant is participating, or reduce the rate or extend
the time of payment of interest (except (m) in connection with a waiver of
applicability of any post-default increase in interest rates and (n) that any
amendment or modification to the financial definitions in this Agreement shall
not constitute a reduction in the rate of interest for purposes of this clause
(x)) or reduce the principal amount thereof, or increase the amount of the
participant’s participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default, and that an
increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant’s participation is not increased as a result
thereof), (y) consent to the assignment or transfer by Borrower of any of its
rights and obligations under this Agreement or (z) release all or substantially
all of the Collateral under all of the Security Documents (except as expressly
provided in the Credit Documents) securing the Loans hereunder in which such
participant is participating.  In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant’s rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
Borrower hereunder shall be determined as if such Lender had not sold such
participation.

 

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(b)                                 Notwithstanding the foregoing, any Lender
(or any Lender together with one or more other Lenders) may assign all or a
portion of its Loan (and related outstanding Obligations hereunder) to any
Eligible Transferee, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment and Assumption Agreement,
provided that (i) new Notes will be issued, at Borrower’s expense, to such new
Lender and to the assigning Lender upon the request of such new Lender or
assigning Lender, such new Notes to be in conformity with the requirements of
Section 1.05, (ii) the consent of the Administrative Agent shall be required in
connection with any assignment pursuant to this paragraph (which consent shall
not be unreasonably withheld or delayed), and (iii) the Administrative Agent
shall receive at the time of each such assignment, from the assigning or
assignee Lender, the payment of a non-refundable assignment fee of $3,500.  To
the extent of any assignment pursuant to this Section 13.04(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments (it being understood that the indemnification provisions
under this Agreement (including, without limitation, Sections 1.09, 1.10, 4.04,
13.01 and 13.06) shall survive as to such assigning Lender).  To the extent that
an assignment of all or any portion of a Lender’s Commitments and related
outstanding Obligations pursuant to this Section 13.04(b) would, at the time of
such assignment, result in increased costs under Section 1.09, 1.10 or 4.04 from
those being charged by the respective assigning Lender prior to such assignment,
then Borrower shall not be obligated to pay such increased costs (although
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).

 

(c)                                  Nothing in this Agreement shall prevent or
prohibit any Lender from pledging its Loans and Notes hereunder to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank and, with the consent of the Administrative Agent, any Lender which
is a fund may pledge all or any portion of its Notes or Loans to a trustee for
the benefit of investors and in support of its obligation to such investors.

 

13.05                     No Waiver; Remedies Cumulative.  No failure or delay
on the part of the Administrative Agent or any Lender or any holder of any Note
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between Borrower or any other Credit Party and
the Administrative Agent or any Lender or the holder of any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder.  The rights, powers and remedies herein or in
any other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent or any Lender or
the holder of any Note would otherwise have.  No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Lender or the holder of any Note to
any other or further action in any circumstances without notice or demand.

 

13.06                     Payments Pro Rata.  (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Lenders (other
than any Lender that has consented in writing to waive its pro rata share of any
such

 

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payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.

 

(b)                                 Each of the Lenders agrees that, if it
should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker’s
lien, by counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Obligation then owed and due to such Lender bears to the total
of such Obligation then owed and due to all of the Lenders immediately prior to
such receipt, then such Lender receiving such excess payment shall purchase for
cash without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in such amount;
provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

 

13.07                     Calculations; Computations.  (a) The financial
statements to be furnished to the Lenders pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by Borrower
to the Lenders).  In addition, all determinations of compliance with this
Agreement or any other Credit Document, shall utilize accounting principles and
policies in conformity with those used to prepare the historical financial
statements delivered to the Lenders for the fiscal year of Borrower ended
December 31, 2010 (with the foregoing generally accepted accounting principles,
subject to the preceding proviso, herein called “GAAP”).  Unless otherwise
noted, all references in this Agreement to “generally accepted accounting
principles” shall mean generally accepted accounting principles as in effect in
the United States.

 

(b)                                 All computations of interest and Commitment
Commission hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest are payable.

 

13.08                     Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial.  (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE VESSEL MORTGAGES, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO ITS CONFLICT OF LAWS RULES (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE
GENERAL OBLIGATIONS LAW).  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK LOCATED IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.

 

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BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.  IF AT ANY
TIME DURING WHICH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT REMAINS IN EFFECT,
BORROWER DOES NOT MAINTAIN A REGULARLY FUNCTIONING OFFICE IN NEW YORK CITY, IT
WILL DULY APPOINT, AND AT ALL TIMES MAINTAIN, AN AGENT IN NEW YORK CITY FOR THE
SERVICE OF PROCESS OR SUMMONS, AND WILL PROVIDE TO THE ADMINISTRATIVE AGENT AND
THE LENDERS WRITTEN NOTICE OF THE IDENTITY AND ADDRESS OF SUCH AGENT FOR SERVICE
OF PROCESS OR SUMMONS; PROVIDED THAT ANY FAILURE ON THE PART OF BORROWER TO
COMPLY WITH THE FOREGOING PROVISIONS OF THIS SENTENCE SHALL NOT IN ANY WAY
PREJUDICE OR LIMIT THE SERVICE OF PROCESS OR SUMMONS IN ANY OTHER MANNER
DESCRIBED ABOVE IN THIS SECTION 13.08 OR OTHERWISE PERMITTED BY LAW.

 

(b)                                 TO THE FULL EXTENT PERMITTED BY LAW,
BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

(c)                                  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

13.09                     Counterparts.  This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.  A set
of counterparts executed by all the parties hereto shall be lodged with Borrower
and the Administrative Agent.

 

13.10                     Intentionally Omitted.

 

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13.11                     Headings Descriptive.  The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.

 

13.12                     Amendment or Waiver; etc.  Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Lenders, provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (with Obligations being
directly affected in the case of following clause (i)) and in the case of the
following clause (vi), to the extent (in the case of the following clause (vi))
that any such Lender would be required to make a Loan in excess of its pro rata
portion provided for in this Agreement or would receive a payment or prepayment
of Loans or a commitment reduction that (in any case) is less than its pro rata
portion provided for in this Agreement, in each case, as a result of any such
amendment, modification or waiver referred to in the following clause (vi)),
(i) extend the final scheduled maturity of any Loan or Note, extend the timing
for or reduce the principal amount of any payment, or reduce the rate or extend
the time of payment of interest on any Loan or Note (except (x) in connection
with the waiver of applicability of any post-default increase in interest rates
and (y) any amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in the rate of interest for purposes
of this clause (i)), or reduce the principal amount thereof (except to the
extent repaid in cash), (ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security
Documents, (iii) amend, modify or waive any provision of this Section 13.12,
(iv) reduce the percentage specified in the definition of Required Lenders,
(v) consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement, (vi) amend, modify or waive any provision in
this Agreement to the extent providing for payments or prepayments of Loans, in
each case, to be applied pro rata among the Lenders entitled to such payments or
prepayments of Loans (it being understood that the provision of additional
extensions of credit pursuant to this Agreement, or the waiver of any mandatory
commitment reduction or any mandatory prepayment of Loans by the Required
Lenders shall not constitute an amendment, modification or waiver for purposes
of this clause (vi)), or (vii) release any Subsidiary Guarantor from a
Subsidiaries Guaranty to the extent same owns a Mortgaged Vessel (other than as
provided in the Subsidiaries Guaranty); provided, further, that no such change,
waiver, discharge or termination shall (t) increase the commitments of any
Lender over the amount thereof then in effect without the consent of such Lender
(it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
commitments shall not constitute an increase of the commitment of any Lender,
and that an increase in the available portion of any commitment of any Lender
shall not constitute an increase in the commitment of such Lender), (u) without
the consent of each Agent, amend, modify or waive any provision of Section 12 as
same applies to such Agent or any other provision as same relates to the rights
or obligations of such Agent or (v) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.

 

13.13                     Survival.  All indemnities set forth herein including,
without limitation, in Sections 1.09, 1.10, 4.04, 12.06, 13.01, 13.06, 13.17 and
13.18 shall survive the execution,

 

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delivery and termination of this Agreement and the Notes and the making and
repayment of the Loans and the resignation and removal of any Agent.

 

13.14                     Domicile of Loans.  Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender.  Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.09, 1.10 or
4.04 from those being charged by the respective Lender prior to such transfer,
then Borrower shall not be obligated to pay such increased costs (although
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).

 

13.15                     Intentionally Omitted.

 

13.16                     Confidentiality.  (a) Subject to the provisions of
clauses (b) and (c) of this Section 13.16, each Lender agrees that it will use
its commercially reasonable efforts not to disclose without the prior consent of
Borrower (other than to its employees, auditors, advisors or counsel or to
another Lender if the Lender or such Lender’s holding or parent company or board
of trustees in its sole discretion determines that any such party should have
access to such information, provided such Persons shall be subject to the
provisions of this Section 13.16 to the same extent as such Lender) any
information with respect to the Parent or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document, provided that any Lender may disclose any such information (a) as has
become generally available to the public other than by virtue of a breach of
this Section 13.16(a) by the respective Lender, (b) as may be required in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required in respect to any summons or subpoena or in
connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Lender, (e) to the Administrative Agent
or the Collateral Agent and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Lender, provided
that such prospective transferee expressly agrees to be bound by the
confidentiality provisions contained in this Section 13.16.

 

(b)                                 Borrower hereby acknowledges and agrees that
each Lender may share with any of its affiliates any information related to the
Parent or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Borrower or its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Lender.

 

(c)                                  Lenders may, by written notice to either of
the Parent or Borrower from time to time, suspend and un-suspend the right of
the Lenders to receive information, including but not limited to financial
information and projections pursuant to Section 7.05, notices, documents,
materials or other information with respect to the Parent or any of its
Subsidiaries which information is to be furnished pursuant to this Agreement or
any other Credit Document, and during the pendency of any such suspensions, none
of the Parent nor any of its Subsidiaries

 

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shall make available to the Lenders any such information, including but not
limited to financial information and projections pursuant to Section 7.05,
notices, documents, materials or other information nor otherwise provide Lenders
with any material nonpublic information regarding the Parent or its
Subsidiaries.

 

13.17                     Register.  Borrower hereby designates the
Administrative Agent to serve as Borrower’s agent, solely for purposes of this
Section 13.17, to maintain a register (the “Register”) on which it will record
the Loans made by each of the Lenders and each repayment and prepayment in
respect of the principal amount of the Loans of each Lender.  Failure to make
any such recordation, or any error in such recordation shall not affect
Borrower’s obligations in respect of such Loans.  With respect to any Lender,
the transfer of the Loans of such Lender and the rights to the principal of, and
interest on, any Loan shall not be effective until such transfer is recorded on
the Register maintained by the Administrative Agent with respect to ownership of
such Loans and prior to such recordation all amounts owing to the transferor
with respect to such Loans shall remain owing to the transferor.  The
registration of assignment or transfer of all or part of any Loans shall be
recorded by the Administrative Agent on the Register only upon the acceptance by
the Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b).  Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the assigning or
transferor Lender and/or the new Lender.  Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this
Section 13.17, except to the extent caused by the Administrative Agent’s own
gross negligence or willful misconduct.

 

13.18                     Judgment Currency.  If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes (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 New York office
on the Business Day preceding that on which final judgment is given.  The
obligations of Borrower in respect of any sum due to any Lender or the
Administrative Agent hereunder or under any Note 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 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, 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 the sum originally due to any
Lender or the Administrative

 

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Agent, as the case may be, in the specified currency, such Lender or the
Administrative Agent, as the case may be, agrees to remit such excess to
Borrower.

 

13.19                     Language. All correspondence, including, without
limitation, all notices, reports and/or certificates, delivered by any Credit
Party to the Administrative Agent, the Collateral Agent or any Lender shall,
unless otherwise agreed by the respective recipients thereof, be submitted in
the English language or, to the extent the original of such document is not in
the English language, such document shall be delivered with a certified English
translation thereof.

 

13.20                     Waiver of Immunity.  Borrower, in respect of itself,
each other Credit Party, its and their process agents, and its and their
properties and revenues, hereby irrevocably agrees that, to the extent that
Borrower, any other Credit Party or any of its or their properties has or may
hereafter acquire any right of immunity from any legal proceedings, whether in
the United States, the Republic of the Marshall Islands, the Republic of
Liberia, the United Kingdom, the Bahamas, Bermuda, the Republic of Malta or any
other Acceptable Flag Jurisdiction or elsewhere, to enforce or collect upon the
Obligations of Borrower or any other Credit Party related to or arising from the
transactions contemplated by any of the Credit Documents, including, without
limitation, immunity from service of process, immunity from jurisdiction or
judgment of any court or tribunal, immunity from execution of a judgment, and
immunity of any of its property from attachment prior to any entry of judgment,
or from attachment in aid of execution upon a judgment, Borrower, for itself and
on behalf of the other Credit Parties, hereby expressly waives, to the fullest
extent permissible under applicable law, any such immunity, and agrees not to
assert any such right or claim in any such proceeding, whether in the United
States, the United Kingdom, Bermuda, the Republic of the Marshall Islands, the
Republic of Liberia, the Bahamas, the Republic of Malta or elsewhere.

 

13.21                     PATRIOT Act.  The Administrative Agent and each Lender
hereby notifies each Credit Party that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub.: 107-56 (signed into law October 26, 2001)) (the
“PATRIOT Act”), it is required to obtain, verify, and record information that
identifies each Credit Party, which information includes the name of each Credit
Party and other information that will allow such Lender to identify each Credit
Party in accordance with the PATRIOT Act, and each Credit Party agrees to
provide such information from time to time to the Administrative Agent and any
Lender.

 

13.22                     Release of Subsidiary Guarantors.  The Agents and the
Lenders hereby agree to release any Mortgaged Vessels in accordance with the
provisions of Section 5.1(b) of the Intercreditor Agreements.

 

SECTION 14 - HOLDINGS GUARANTY

 

14.01                     Guaranty. In order to induce the Administrative Agent,
the Collateral Agent and the Lenders to enter into this Agreement and to extend
credit hereunder, and in recognition of the direct benefits to be received by
the Parent from the proceeds of the Loans, each of the Parent and Arlington
hereby agrees with the Secured Creditors as follows:  Each of the Parent and
Arlington hereby unconditionally and irrevocably guarantees as primary obligor
and not merely as surety, the full and prompt payment when due, whether upon
maturity, acceleration or

 

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otherwise, of any and all of the Guaranteed Obligations of Borrower to the
Secured Creditors and agrees that their obligations are joint and several with
the Borrowers and the Subsidiary Guarantors hereunder and under the other Credit
Documents. If any or all of the Guaranteed Obligations of Borrower to the
Secured Creditors becomes due and payable hereunder, each of the Parent and
Arlington, unconditionally and irrevocably, promises to pay such indebtedness to
the Administrative Agent and/or the other Secured Creditors, or order, on
demand, together with any and all reasonable documented out-of-pocket expenses
which may be incurred by the Administrative Agent and the other Secured
Creditors in collecting any of the Guaranteed Obligations.  If a claim is ever
made upon any Secured Creditor for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations
and any of the aforesaid payees repays all or part of said amount by reason of
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including Borrower), then and in such event, each of the Parent and Arlington
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon each of the Parent or Arlington notwithstanding any revocation of
this Guaranty or other instrument evidencing any liability of Borrower, and each
of the Parent and Arlington shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.

 

14.02                     Bankruptcy. Additionally, each of the Parent and
Arlington unconditionally and irrevocably guarantees the payment of any and all
of the Guaranteed Obligations to the Secured Creditors whether or not due or
payable by Borrower upon the occurrence of any of the events specified in
Section 10.04, and irrevocably and unconditionally promises to pay such
indebtedness to the Secured Creditors, or order, on demand, in lawful money of
the United States.

 

14.03                     Nature of Liability. The liability of each of the
Parent and Arlington hereunder is primary, absolute and unconditional, exclusive
and independent of any security for or other guaranty of the Guaranteed
Obligations, whether executed by any other guarantor or by any other party, and
the liability of each of the Parent and Arlington hereunder shall not be
affected or impaired by (a) any direction as to application of payment by
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations, or (c) any payment on or in reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by Borrower, or (e) any payment made to any
Secured Creditor on the Guaranteed Obligations which any such Secured Creditor
repays to Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and Borrower waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding, (f) any action or inaction by the Secured Creditors as
contemplated in Section 14.05, or (g) any invalidity, irregularity or
enforceability of all or any part of the Guaranteed Obligations or of any
security therefor.

 

14.04                     Independent Obligation. The obligations of each of the
Parent and Arlington hereunder are independent of the obligations of any other
guarantor, any other party or Borrower, and a separate action or actions may be
brought and prosecuted against each of the Parent or Arlington whether or not
action is brought against any other guarantor, any other party or

 

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Borrower and whether or not any other guarantor, any other party or Borrower be
joined in any such action or actions.  Each of the Parent and Arlington waives,
to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.  Any
payment by Borrower or other circumstance which operates to toll any statute of
limitations as to Borrower shall operate to toll the statute of limitations as
to the Parent or Arlington.

 

14.05                     Authorization. Each of the Parent and Arlington
authorizes the Secured Creditors without notice or demand (except as shall be
required by applicable statute or this Agreement and cannot be waived), and
without affecting or impairing its liability hereunder, from time to time to:

 

(a)                                  in accordance with the terms and provisions
of this Agreement and the other Credit Documents, change the manner, place or
terms of payment of, and/or change or extend the time of payment of, renew,
increase, accelerate or alter, any of the Guaranteed Obligations (including any
increase or decrease in the principal amount thereof or the rate of interest or
fees thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and this Holdings Guaranty shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;

 

(b)                                 take and hold security for the payment of
the Guaranteed Obligations and sell, exchange, release, impair, surrender,
realize upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever securing,
the Guaranteed Obligations or any liabilities (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;

 

(c)                                  exercise or refrain from exercising any
rights against Borrower, any other Credit Party or others or otherwise act or
refrain from acting;

 

(d)                                 release or substitute any one or more
endorsers, guarantors, Borrower, other Credit Parties or other obligors;

 

(e)                                  settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of Borrower to its creditors other than the
Secured Creditors;

 

(f)                                    apply any sums by whomsoever paid or
howsoever realized to any liability or liabilities of Borrower to the Secured
Creditors regardless of what liability or liabilities of Borrower remain unpaid;

 

(g)                                 consent to or waive any breach of, or any
act, omission or default under, this Agreement, any other Credit Document, any
Interest Rate Protection Agreement or any Other Hedging Agreement or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit

 

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Document, any Interest Rate Protection Agreement or any Other Hedging Agreement
or any of such other instruments or agreements; and/or

 

(h)                                 take any other action which would, under
otherwise applicable principles of common law, give rise to a legal or equitable
discharge of either of the Parent or Arlington from its liabilities under this
Holdings Guaranty.

 

14.06                     Reliance.  It is not necessary for any Secured
Creditor to inquire into the capacity or powers of the Parent or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any Guaranteed Obligations made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.

 

14.07                     Subordination.  Any indebtedness of Borrower now or
hereafter owing to either of the Parent or Arlington is hereby subordinated to
the Guaranteed Obligations owing to the Secured Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of Borrower to either of the Parent or Arlington shall be
collected, enforced and received by either of the Parent or Arlington for the
benefit of the Secured Creditors and be paid over to the Administrative Agent on
behalf of the Secured Creditors on account of the Guaranteed Obligations to the
Secured Creditors, but without affecting or impairing in any manner the
liability of either of the Parent or Arlington under the other provisions of
this Holdings Guaranty.  Prior to the transfer by either of the Parent or
Arlington of any note or negotiable instrument evidencing any such indebtedness
of Borrower to either of the Parent or Arlington, the Parent or Arlington, as
the case may be, shall mark such note or negotiable instrument with a legend
that the same is subject to this subordination.  Without limiting the generality
of the foregoing, each of the Parent and Arlington hereby agrees with the
Secured Creditors that neither the Parent or Arlington, as the case may be, will
exercise any right of subrogation which it may at any time otherwise have as a
result of this Holdings Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.  If and to the extent required in order for
the Guaranteed Obligations either of the Parent or Arlington to be enforceable
under applicable federal, state and other laws relating to the insolvency of
debts, the maximum liability of either of the Parent or Arlington hereunder
shall be limited to the greatest amount which can lawfully be guaranteed by
either of the Parent or Arlington under such laws, after giving effect to any
rights of contribution, reimbursement and subrogation arising under this
Section.

 

14.08                     Waiver. (a)  Each of the Parent and Arlington waives
any right (except as shall be required by applicable law and cannot be waived)
to require any Secured Creditor to (i) proceed against Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in any Secured Creditor’s power whatsoever.  Each of the Parent and
Arlington waives any defense based on or arising out of any defense of Borrower,
any other guarantor or any other party, other than payment of the Guaranteed
Obligations to the extent of such payment, based on or arising out of the
disability of Borrower, any other guarantor or any other party, or the validity,
legality or unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of Borrower
other than payment of the Guaranteed Obligations to the extent of such payment. 
The Secured Creditors may, at their election, foreclose on any security held by
the Administrative Agent, the Collateral Agent or any

 

98

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other Secured Creditor by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against Borrower, or any other party, or any
security, without affecting or impairing in any way the liability of the Parent
hereunder except to the extent the Guaranteed Obligations have been paid.  Each
of the Parent and Arlington waives any defense arising out of any such election
by the Secured Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
either of the Parent or Arlington against Borrower or any other party or any
security.(b)        Each of the Parent and Arlington waives all presentments,
demands for performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Holdings Guaranty, and notices of the existence, creation or
incurring of new or additional Guaranteed Obligations.  Each of the Parent and
Arlington assumes all responsibility for being and keeping itself informed of
Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which each of the Parent and Arlington
assumes and incurs hereunder, and agrees that neither the Administrative Agent
nor any of the other Secured Creditors shall have any duty to advise the Parent
of information known to them regarding such circumstances or risks.

 

14.09                     Judgment Shortfall. (a) the Obligations of the Parent
and Arlington under the Holdings Guaranty to make payments in the respective
currency or currencies in which the respective Guaranteed Obligations are
required to be paid (such currency being herein called the “Obligation
Currency”) shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent, the Collateral
Agent or the respective Secured Creditor of the full amount of the Obligation
Currency expressed to be payable to the Administrative Agent, the Collateral
Agent or such other Secured Creditor under this Holdings Guaranty or the other
Credit Documents, as applicable.  If for the purpose of obtaining or enforcing
judgments against the Parent or Arlington in any court or jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall be
made, at the rate of exchange (quoted by the Administrative Agent, determined,
in each case, as of the date immediately preceding the day on which the judgment
is given (such Business Day hereinafter referred to as the “Judgment Currency
Conversion Date”).

 

(b)                                 If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Parent and Arlington jointly and severally agree
to pay, or cause to be paid, such additional amounts, if any (but in any event
not a lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the date
of payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate or exchange prevailing on the Judgment Currency
Conversion Date.

 

99

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*     *     *

 

100

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.

 

 

GENERAL MARITIME SUBSIDIARY II CORPORATION,

 

as Borrower

 

 

 

 

 

By:

/s/ Jeffrey D. Pribor

 

Name:

Jeffrey D. Pribor

 

Title:

President

 

 

Address: 299 Park Avenue, New York, NY 10171

 

 

Telephone:  (212) 763-5680

 

 

Facsimile:    (212) 763-5608

 

 

 

 

 

 

 

GENERAL MARITIME SUBSIDIARY CORPORATION,

 

as Borrower

 

 

 

 

 

By:

/s/ Jeffrey D. Pribor

 

Name:

Jeffrey D. Pribor

 

Title:

President

 

 

Address: 299 Park Avenue, New York, NY 10171

 

 

Telephone:  (212) 763-5680

 

 

Facsimile:    (212) 763-5608

 

 

 

 

 

 

 

GENERAL MARITIME CORPORATION,

 

as Parent

 

 

 

 

 

By:

/s/ Jeffrey D. Pribor

 

Name:

Jeffrey D. Pribor

 

Title:

Executive Vice President & Chief Financial Officer

 

 

Address: 299 Park Avenue, New York, NY 10171

 

 

Telephone:  (212) 763-5680

 

 

Facsimile:    (212) 763-5608

 

[Credit Agreement]

 

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

 

 

ARLINGTON TANKERS LTD,

 

as Guarantor

 

 

 

 

 

By:

/s/ John C. Georgiopoulos

 

Name:

John C. Georgiopoulos

 

Title:

Director

 

 

Address: 299 Park Avenue, New York, NY 10171

 

 

Telephone:  (212) 763-5632

 

 

Facsimile:    (212) 763-5608

 

 

 

 

 

 

 

In each of the above, with a copy to:

 

 

 

 

Kenneth Chin

 

 

Kramer Levin Naftalis & Frankel LLP

 

 

1177 Avenue of the Americas

 

 

New York, NY 10036

 

 

Facsimile:  (212) 715-8000

 

[Credit Agreement]

 

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

 

 

OCM MARINE INVESTMENTS CTB, LTD.

 

By: Oaktree Capital Management, L.P.

 

Its: Director

 

 

 

 

 

By:

/s/ B. James Ford

 

Name:

B. James Ford

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Adam C. Pierce

 

Name:

Adam C Pierce

 

Title:

Senior Vice President

 

[Credit Agreement]

 

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

 

 

OCM ADMINISTRATIVE AGENT, LLC

 

 

 

By:

Oaktree Principal Fund V, L.P.

 

Its:

Managing Member

 

 

 

 

By:

Oaktree Principal Fund V GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Principal Fund V GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

 

 

 

By:

/s/ B. James Ford

 

Name:

B. James Ford

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Adam C. Pierce

 

Name:

Adam C Pierce

 

Title:

Senior Vice President

 

[Credit Agreement]

 

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

 

SCHEDULE I — COMMITMENTS

 

Lender

 

Commitment

 

OCM Marine Investments CTB, Ltd.

 

$

200,000,000.00

 

 

Sch. I - 1

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

 

SCHEDULE II — LENDER ADDRESSES

 

Lender

 

Address

OCM Marine Investments CTB, Ltd.

 

c/o Oaktree Capital Management, L.P.
333 South Grand Ave., 28th Floor
Los Angeles, CA 90071
Attn: Amy Rice

 

with a copy to:

Kirkland & Ellis LLP

333 South Hope Street, 29th Floor

Los Angeles, CA 90071

Attn: Samantha Good

 

Sch. II - 1

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

 

 

SCHEDULE III — MORTGAGED VESSELS

 

 

 

Vessel Name

 

Vessel Type

 

DWT

 

Year Built

1.

 

Genmar Ajax

 

Aframax

 

96,183

 

1996

2.

 

Genmar Agamemnon

 

Aframax

 

96,214

 

1995

3.

 

Genmar Minotaur

 

Aframax

 

96,226

 

1995

4.

 

Genmar Alexandra

 

Aframax

 

102,262

 

1992

5.

 

Genmar Revenge

 

Aframax

 

96,755

 

1994

6.

 

Genmar Strength

 

Aframax

 

105,674

 

2003

7.

 

Genmar Defiance

 

Aframax

 

105,538

 

2002

8.

 

Genmar Daphne

 

Aframax

 

106,560

 

2002

9.

 

Genmar Elektra

 

Aframax

 

106,548

 

2002

10.

 

Genmar Companion

 

Panamax

 

72,750

 

2004

11.

 

Genmar Compatriot

 

Panamax

 

72,750

 

2004

12.

 

Genmar Phoenix

 

Suezmax

 

149,999

 

1999

13.

 

Genmar Spyridon

 

Suezmax

 

153,972

 

2000

14.

 

Genmar Argus

 

Suezmax

 

164,097

 

2000

15.

 

Genmar Hope

 

Suezmax

 

153,919

 

1999

16.

 

Genmar Horn

 

Suezmax

 

159,475

 

1999

17.

 

Genmar Orion

 

Suezmax

 

159,992

 

2002

18.

 

Genmar Harriet G

 

Suezmax

 

150,205

 

2006

19.

 

Genmar Kara G

 

Suezmax

 

150,296

 

2007

20.

 

Genmar George T

 

Suezmax

 

149,847

 

2007

21.

 

Genmar St. Nikolas

 

Suezmax

 

149,876

 

2008

22.

 

Genmar Maniate

 

Suezmax

 

165,000

 

2010

23.

 

Genmar Spartiate

 

Suezmax

 

165,000

 

2011

24.

 

Genmar Victory

 

VLCC

 

314,000

 

2001

25.

 

Genmar Vision

 

VLCC

 

314,000

 

2001

26.

 

Genmar Poseidon

 

VLCC

 

305,795

 

2002

27.

 

Genmar Ulysses

 

VLCC

 

318,695

 

2003

28.

 

Genmar Hercules

 

VLCC

 

306,543

 

2007

29.

 

Genmar Atlas

 

VLCC

 

306,005

 

2007

30.

 

Genmar Zeus

 

VLCC

 

318,325

 

2010

31.

 

Genmar Consul

 

Handymax

 

47,400

 

2004

 

Sch. III - 1

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

 

SCHEDULE IV — EXISTING LIENS

 

None.

 

Sch. IV - 1

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

 

SCHEDULE V — INDEBTEDNESS

 

Borrower(s)

 

Lender(s)/Buyer(s)

 

Governing Agreement

 

Aggregate Principal
Amount

 

Guarantor(s)

General Maritime Corporation

 

Citigroup

 

Interest Rate Swap Agreement

 

$

100,000,000

 

None.

General Maritime Corporation

 

DnB Nor Bank

 

Interest Rate Swap Agreement

 

$

75,000,000

 

None.

General Maritime Corporation

 

Nordea Bank Finland plc

 

Interest Rate Swap Agreement

 

$

75,000,000

 

None.

 

Sch. V - 1

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

 

SCHEDULE VI — INSURANCE

 

Insurance to be maintained on each Mortgaged Vessel:

 

(a)  The Parent shall, and shall cause its Subsidiaries to, at the Parent’s
expense, keep each Mortgaged Vessel insured with insurers and protection and
indemnity clubs or associations of internationally recognized responsibility,
and placed in such markets, on such terms and conditions, and through brokers,
in each case reasonably acceptable to the Collateral Agent (it being understood
that Leeds and Leeds, AON and Marsh are acceptable) and under forms of policies
approved by the Collateral Agent against the risks indicated below and such
other risks as the Collateral Agent may specify from time to time:

 

(i)                                     Marine and war risk, including
terrorism, confiscation, piracy, London Blocking and Trapping Addendum and Lost
Vessel Clause, hull and machinery insurance, hull interest insurance and freight
interest insurance, together in an amount in U.S. dollars at all times equal to,
except as otherwise approved or required in writing by the Collateral Agent, the
greater of (x) the then Fair Market Value of the Mortgaged Vessel and (y) an
amount which, when aggregated with such insured value of the other Mortgaged
Vessels (if the other Mortgaged Vessels are then subject to a Vessel Mortgage in
favor of the Collateral Agent under the Credit Agreement, and have not suffered
an Event of Loss), is equal to 120% of the sum of (A) the aggregate principal
amount of outstanding Loans at such time and (B) the aggregate principal amount
outstanding, and revolving loan commitments, under the Senior Credit
Facilities.  The insured values for hull and machinery required under this
clause (i) for each Mortgaged Vessel shall at all times be in an amount equal to
the greater of (x) eighty per cent (80%) of the Fair Market Value of the
Mortgaged Vessel and (y) an amount which, when aggregated with such hull and
machinery insured value of the other Mortgaged Vessels (if the other Mortgaged
Vessels are then subject to a Vessel Mortgage in favor of the Collateral Agent
and have not suffered an Event of Loss), is equal to the sum of (A) the
aggregate principal amount of outstanding Loans at such time and (B) the
aggregate principal amount outstanding, and revolving loan commitments, under
the Senior Credit Facilities, and the remaining machine and war risk insurance
required by this clause (i) may be taken out as hull and freight interest
insurance.

 

(ii)                                  Marine and war risk protection and
indemnity insurance or equivalent insurance (including coverage against
liability for crew, fines and penalties arising out of the operation of the
Mortgaged Vessel, insurance against liability arising out of pollution, spillage
or leakage, and workmen’s compensation or longshoremen’s and harbor workers’
insurance as shall be required by applicable law) in such amounts approved by
the Collateral Agent;  provided, however, that insurance against liability under
law or international convention arising out of pollution, spillage or leakage
shall be in an amount not less than the greater of:

 

(y)                                 the maximum amount available, as that amount
may from time to time change, from the International Group of Protection and
Indemnity

 

Sch. VI - 1

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

 

Associations (the “International Group”) or alternatively such sources of
pollution, spillage or leakage coverage as are commercially available in any
absence of such coverage by the International Group as shall be carried by
prudent shipowners for similar vessels engaged in similar trades plus amounts
available from customary excess insurers of such risks as excess amounts shall
be carried by prudent shipowners for similar vessels engaged in similar trades;
and

 

(z)                                   the amounts required by the laws or
regulations of the United States of America or any applicable jurisdiction in
which the Mortgaged Vessel may be trading from time to time.

 

(iii)                               While the Mortgaged Vessel is idle or laid
up, at the option of the Parent and in lieu of the above-mentioned marine and
war risk hull insurance, port risk insurance insuring the Mortgaged Vessel
against the usual risks encountered by like vessels under similar circumstances,
the Collateral Agent shall, at the Parent’s expense, keep each Mortgaged Vessel
insured with mortgagee’s interest insurance (including extended mortgagee’s
interest-additional perils-pollution) on such conditions as the Collateral Agent
may reasonable require and mortgagee’s interest insurance for pollution risks as
from time to time agreed, in each case, satisfactory to the Collateral Agent in
an amount in U.S. dollars which, when aggregated with such insured value of the
other Mortgaged Vessels (if the other Mortgaged Vessels are then subject to a
Vessel Mortgage in favor of the Collateral Agent under the Credit Agreement, and
have not suffered an Event of Loss), is equal to 120% of the sum of (A) the
aggregate principal amount of outstanding Loans at such time and (B) the
aggregate principal amount outstanding, and revolving loan commitments, under
the Senior Credit Facilities; all such Collateral Agent’s interest insurance
cover shall in the Collateral Agent’s discretion be obtained directly by the
Collateral Agent and the Parent shall on demand pay all costs of such cover;
premium costs shall be reimbursed by the Parent to the Collateral Agent.

 

(b)                                 The marine and commercial war-risk insurance
required in this Schedule VI for each Mortgaged Vessel shall have deductibles no
higher than the following:  (i) Hull and Machinery - U.S. $300,000 for all hull
and machinery claims and each accident or occurrence and (ii) Protection and
Indemnity — U.S. $100,000 for collision liabilities, U.S. $50,000 for cargo
claims, U.S. $35,000 for crew claims, U.S. $20,000 passenger claims and U.S.
$20,000 all other claims, in each case each accident or occurrence.

 

All insurance maintained hereunder shall be primary insurance without right of
contribution against any other insurance maintained by the Collateral Agent. 
Each policy of marine and war risk hull and machinery insurance with respect to
each Mortgaged Vessel shall provide that the Collateral Agent shall be a named
insured in its capacity as Mortgagee and as loss payee.  Each entry in a marine
and war risk protection indemnity club with respect to each Mortgaged Vessel
shall note the interest of the Collateral Agent.  The Administrative Agent, the
Collateral Agent and each of their respective successors and assigns shall not
be responsible for any premiums, club calls, assessments or any other
obligations or for the representations and warranties made therein by the
Parent, any of the Parent’s Subsidiaries or any other person.

 

Sch. VI - 2

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

 

(c)                                  The Collateral Agent shall from time to
time, and in any event at least annually, obtain a detailed report signed by a
firm of marine insurance brokers acceptable to the Collateral Agent with respect
to P & I entry, the hull and machinery and war risk insurance carried and
maintained on each Mortgaged Vessel, together with their opinion as to the
adequacy thereof and its compliance with the provisions of this Schedule VI.  At
the Parent’s expense the Parent will cause its insurance broker (which, for the
avoidance of doubt shall be a different insurance broker from the firm of marine
insurance brokers referred to in the immediately preceding sentence) and the P &
I club or association providing P & I insurance referred to in part (a)(ii) of
this Schedule VI, to agree to advise the Collateral Agent by telecopier or
electronic mail confirmed by letter of any expiration, termination, alteration
or cancellation of any policy, any default in the payment of any premium and of
any other act or omission on the part of the Parent or any of its Subsidiaries
of which the Parent has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on any Mortgaged Vessel, and
to provide an opportunity of paying any such unpaid premium or call, such right
being exercisable by the Collateral Agent on a Mortgaged Vessel on an individual
basis and not on a fleet basis.  In addition, the Parent shall promptly provide
the Collateral Agent with any information which the Collateral Agent reasonably
requests for the purpose of obtaining or preparing any report from the
Collateral Agent’s independent marine insurance consultant as to the adequacy of
the insurances effected or proposed to be effected in accordance with this
Schedule VI as of the date hereof or in connection with any renewal thereof, and
the Parent shall upon demand indemnify the Collateral Agent in respect of all
reasonable fees and other expenses incurred by or for the account of the
Collateral Agent in connection with any such report, provided that the
Collateral Agent shall be entitled to such indemnity only for one such report
during a period of twelve months.

 

The underwriters of brokers shall furnish the Collateral Agent with a letter or
letters of undertaking to the effect that

 

(i)                                     they will hold the instruments of
insurance, and the benefit of the insurances thereunder, to the order of the
Collateral Agent in accordance with the terms of the loss payable clause
referred to in the relevant Assignment of Insurances for each Mortgaged Vessel;

 

(ii)                                  they will have endorsed on each and every
policy as and when the same is issued the loss payable clause and the notice of
assignment referred to in the relevant Assignment of Insurances for each
Mortgaged Vessel; and

 

(iii)                               they will not set off against any sum
recoverable in respect of a claim against any Mortgaged Vessel under the said
underwriters or brokers or any other Person in respect of any other vessel nor
cancel the said insurances by reason of non-payment of such premiums or other
amounts.

 

All policies of insurance required hereby shall provide for not less than 14
days prior written notice to be received by the Collateral Agent of the
termination or cancellation of the insurance evidenced thereby.  All policies of
insurance maintained pursuant to this Schedule VI for risks covered by insurance
other than that provided by a P & I Club shall contain provisions

 

Sch. VI - 3

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

 

waiving underwriters’ rights of subrogation thereunder against any assured named
in such policy and any assignee of said assured.  The Parent shall, and shall
cause its Subsidiaries to, assign to the Collateral Agent its full rights under
any policies of insurance in respect of each Mortgaged Vessel.  The Parent
agrees that it shall, and shall cause each of its Subsidiaries to, deliver,
unless the insurances by their terms provide that they cannot cease (by reason
of nonrenewal or otherwise) without the Collateral Agent being informed and
having the right to continue the insurance by paying any premiums not paid by
the Parent, receipts showing payment of premiums for Required Insurance and also
of demands from the Mortgaged Vessel’s P & I underwriters to the Collateral
Agent at least two (2) days before the risk in question commences.

 

(d)                                 Unless the Collateral Agent shall otherwise
agree, all amounts of whatsoever nature payable under any insurance must be
payable to the Collateral Agent for distribution first to itself and thereafter
to the Parent or others as their interests may appear, provided that,
notwithstanding anything to the contrary herein, until otherwise required by the
Collateral Agent by notice to the underwriters upon the occurrence and
continuance of a Default or an Event of Default hereunder, (i) amounts payable
under any insurance on each Mortgaged Vessel with respect to protection and
indemnity risks may be paid directly to (x) the Parent to reimburse it for any
loss, damage or expense incurred by it and covered by such insurance or (y) the
Person to whom any liability covered by such insurance has been incurred
provided that the underwriter shall have first received evidence that the
liability insured against has been discharged, and (ii) amounts payable under
any insurance with respect to each Mortgaged Vessel involving any damage to each
Mortgaged Vessel not constituting an Event of Loss, may be paid by underwriters
directly for the repair, salvage or other charges involved or, if the Parent
shall have first fully repaired the damage or paid all of the salvage or other
charges, may be paid to the Parent as reimbursement therefor; provided, however,
that if such amounts (including any deductible) are in excess of U.S.
$2,000,000, the underwriters shall not make such payment without first obtaining
the written consent thereto of the Collateral Agent.

 

(e)                                  All amounts paid to the Collateral Agent in
respect of any insurance on the Mortgaged Vessels shall be disposed of as
follows (after deduction of the expenses of the Collateral Agent in collecting
such amounts):

 

(i)                                     any amount which might have been paid at
the time, in accordance with the provisions of paragraph (d) above, directly to
the Parent or others shall be paid by the Collateral Agent to, or as directed
by, the Parent;

 

(ii)                                  all amounts paid to the Collateral Agent
in respect of an Event of Loss of the Mortgaged Vessel shall be applied by the
Collateral Agent to the payment of the Indebtedness hereby secured pursuant to
Section 4.02(a) of the Credit Agreement, subject to the terms of the
Intercreditor Agreements;

 

(iii)                               all other amounts paid to the Collateral
Agent in respect of any insurance on the Mortgaged Vessel may, in the Collateral
Agent’s sole discretion, be held and applied to the prepayment of the
Obligations or to making of needed repairs or other work on the Mortgaged
Vessel, or to the payment of other claims incurred by the Parent

 

Sch. VI - 4

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or any of its Subsidiaries relating to the Mortgaged Vessel, or may be paid to
the Parent or whosoever may be entitled thereto.

 

(f)                                    In the event that any claim or lien is
asserted against any Mortgaged Vessel for loss, damage or expense which is
covered by insurance required hereunder and it is necessary for the Parent to
obtain a bond or supply other security to prevent arrest of such Mortgaged
Vessel or to release the Mortgaged Vessels from arrest on account of such claim
or lien, the Collateral Agent, on request of the Parent, may, in the sole
discretion of the Collateral Agent, assign to any Person, firm or corporation
executing a surety or guarantee bond or other agreement to save or release the
Mortgaged Vessel from such arrest, all right, title and interest of the
Collateral Agent in and to said insurance covering said loss, damage or expense,
as collateral security to indemnify against liability under said bond or other
agreement.

 

(g)                                 The Parent shall deliver to the Collateral
Agent certified copies and, whenever so requested by the Collateral Agent, the
originals of all certificates of entry, cover notes, binders, evidences of
insurance and policies and all endorsements and riders amendatory thereof in
respect of insurance maintained pursuant to Section 8.03 of the Credit Agreement
and this Schedule VI for the purpose of inspection or safekeeping, or,
alternatively, satisfactory letters of undertaking from the broker holding the
same.  The Collateral Agent shall be under no duty or obligation to verify the
adequacy or existence of any such insurance or any such policies, endorsement or
riders.

 

(h)                                 The Parent will not, and will not permit any
of its Subsidiaries to, execute or permit or willingly allow to be done any act
by which any insurance may be suspended, impaired or cancelled, and that it will
not permit or allow the Mortgaged Vessels to undertake any voyage or run any
risk or transport any cargo which may not be permitted by the policies in force,
without having previously notified the Collateral Agent in writing and insured
the Mortgaged Vessels by additional coverage to extend to such voyages, risks,
passengers or cargoes.

 

(i)                                     In case any underwriter proposes to pay
less on any claim than the amount thereof, the Parent shall forthwith inform the
Collateral Agent, and if a Default, an Event of Default or an Event of Loss has
occurred and is continuing, the Collateral Agent shall have the exclusive right
to negotiate and agree to any compromise.

 

(j)                                     The Parent will, and will cause each of
its Subsidiaries to, comply with and satisfy all of the provisions of any
applicable law, convention, regulation, proclamation or order concerning
financial responsibility for liabilities imposed on the Parent, its Subsidiaries
or the Mortgaged Vessels with respect to pollution by any state or nation or
political subdivision thereof and will maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
convention, regulation, proclamation or order with respect to the trade in which
the Mortgaged Vessels are from time to time engaged and the cargo carried by it.

 

Sch. VI - 5

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SCHEDULE VII — ERISA

 

General Maritime Corporation 401(k) Profit Sharing Plan and Trust.

 

Sch. VII - 1

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SCHEDULE VIII — SUBSIDIARIES

 

Name of Subsidiary

 

Direct Owner(s)

 

Percent (%)
Ownership

 

Jurisdiction of
Organization

General Maritime Subsidiary Corporation

 

General Maritime Corporation

 

100%

 

Republic of the Marshall Islands

General Maritime Management LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

General Maritime Management (UK) LLC

 

General Maritime Management LLC

 

100%

 

Republic of the Marshall Islands

General Maritime Management (Hellas) LLC

 

General Maritime Management LLC

 

100%

 

Republic of Liberia

General Maritime Management (Portugal) LLC

 

General Maritime Management LLC

 

100%

 

Republic of the Marshall Islands

General Maritime Management (Portugal) LDA.

 

General Maritime Management (Portugal) LLC

 

100%

 

Republic of Portugal

General Maritime Crewing Pte. Ltd.

 

General Maritime Management (Portugal) LLC

 

100%

 

Singapore

General Maritime Crewing Private Limited (India Division Office)

 

General Maritime Crewing Pte. Ltd.

 

100%

 

India

General Maritime Crewing Limited

 

General Maritime Crewing Pte. Ltd.

 

100%

 

Russia

GMR Chartering LLC

 

General Maritime Subsidiary Corporation

 

100%

 

New York

GMR Administration Corp.

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Agamemnon LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Ajax LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Alexandra LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Argus LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Constantine LLC

 

General Maritime Subsidiary

 

100%

 

Republic of

 

Sch. VIII - 1

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Name of Subsidiary

 

Direct Owner(s)

 

Percent (%)
Ownership

 

Jurisdiction of
Organization

 

 

Corporation

 

 

 

Liberia

GMR Daphne LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Defiance LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Elektra LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR George T LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR GP LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Gulf LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Harriet G LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Hope LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Horn LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Kara G LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Limited LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Minotaur LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Orion LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Phoenix LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Princess LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Progress LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Revenge LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

 

Sch. VIII - 2

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Name of Subsidiary

 

Direct Owner(s)

 

Percent (%)
Ownership

 

Jurisdiction of
Organization

GMR St. Nikolas LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Spyridon LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of the Marshall Islands

GMR Star LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Strength LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Trader LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

GMR Trust LLC

 

General Maritime Subsidiary Corporation

 

100%

 

Republic of Liberia

Arlington Tankers Ltd.

 

General Maritime Corporation

 

100%

 

Bermuda

Companion Ltd.

 

Arlington Tankers Ltd.

 

100%

 

Bermuda

Compatriot Ltd.

 

Arlington Tankers Ltd.

 

100%

 

Bermuda

Consul Ltd.

 

Arlington Tankers Ltd.

 

100%

 

Bermuda

Victory Ltd.

 

Arlington Tankers Ltd.

 

100%

 

Bermuda

Vision Ltd.

 

Arlington Tankers Ltd.

 

100%

 

Bermuda

Arlington Tankers, LLC

 

Arlington Tankers Ltd.

 

100%

 

Delaware

General Maritime Subsidiary II Corporation

 

General Maritime Corporation

 

100%

 

Republic of the Marshall Islands

GMR Poseidon LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

GMR Ulysses LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

GMR Hercules LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

GMR Atlas LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

GMR Zeus LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

GMR Maniate LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

 

Sch. VIII - 3

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Name of Subsidiary

 

Direct Owner(s)

 

Percent (%)
Ownership

 

Jurisdiction of
Organization

GMR Spartiate LLC

 

General Maritime Subsidiary II Corporation

 

100%

 

Republic of the Marshall Islands

General Maritime Investments LLC

 

General Maritime Corporation

 

100%

 

Republic of the Marshall Islands

General Product Carriers Corporation

 

General Maritime Investments LLC

 

100%

 

Republic of the Marshall Islands

General Maritime Subsidiary NSF Corporation

 

General Maritime Corporation

 

100%

 

Republic of the Marshall Islands

Concept Ltd.

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Bermuda

Concord Ltd.

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Bermuda

Contest Ltd.

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Bermuda

GMR Concord LLC

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Republic of the Marshall Islands

GMR Contest LLC

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Republic of the Marshall Islands

GMR Concord LLC

 

General Maritime Subsidiary NSF Corporation

 

100%

 

Republic of the Marshall Islands

 

Sch. VIII - 4

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SCHEDULE IX — CAPITALIZATION

 

As of the Closing Date, the only stock plans of the Parent are its Amended and
Restated 2001 Stock Incentive Plan, as amended to date (the “2001 Plan”) and its
2011 Stock Incentive Plan (which remains subject to approval by the Parent’s
shareholders), and

 

·                  6,700 shares of the common stock of the Parent are subject to
outstanding options under the 2001 Plan; and

·                  there are no shares remaining for grant under the 2001 Plan
to issue regular equity grants to our employees, consultants, executive officers
and directors.

 

In addition, the Parent may from time to time issue, sell or otherwise cause to
become outstanding its Equity Interests to any director, officer, employee or
consultant of the Parent or any of its Subsidiaries or joint ventures pursuant
to any other compensatory plan or arrangement of the Parent or any of its
Subsidiaries approved by the board of directors of the Parent or the
compensation committee thereof.

 

On the Closing Date, the Parent issued to OCM Marine Investments CTB, Ltd., a
Cayman Islands exempt company (the “Oaktree Investor”), and/or certain of its
Affiliates, warrants for the purchase of 19.9% of its outstanding common stock
(measured as of immediately prior to the Closing Date) at an exercise price of
$0.01 per share.

 

On March 29, 2011, the Parent entered into an Investment Agreement with the
Oaktree Investor which, among other things, provides the Oaktree Investor and
certain of its Affiliates, as specified therein, with preemptive rights in
respect of specified future issuance of the capital stock of the Parent.

 

Sch. IX - 1

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SCHEDULE X — APPROVED CLASSIFICATION SOCIETIES

 

American Bureau of Shipping
Nippon Kaiji Kyokai
Germanischer Lloyd
Lloyd’s Register of Shipping
Bureau Veritas
Det Norske Veritas

 

Sch. X - 1

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SCHEDULE XI — EXISTING INVESTMENTS

 

Equity Investments of the Parent not exceeding $100,000 in the aggregate in the
following Subsidiaries:

 

GMR Administration Corp.

GMR GP LLC

GMR Limited LLC

General Maritime Management (UK) LLC

GMR Star LLC

GMR Trader LLC

GMR Trust LLC

General Maritime Management (Hellas) Ltd.

Arlington Tankers, LLC

 

Equity Investments of the Parent in the following Subsidiaries party to the
sale-leaseback transactions:

 

General Maritime Subsidiary NSF Corporation

GMR Concord LLC

GMR Contest LLC

GMR Contest LLC

Concord Ltd.

Contest Ltd.

Concept Ltd.

 

Sch. XI - 1

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SCHEDULE XII - AFFILIATE TRANSACTIONS

 

·                  this Credit Agreement;

 

·                  that certain Investment Agreement dated March 29, 2011 by and
between OCM Marine Investments CTB, Ltd. and the Parent (as amended on the
Closing Date);

 

·                  the Warrants, having the meaning set forth in the Investment
Agreement;

 

·                  the Registration Rights Agreement, dated as of the Closing
Date, by and among the Parent and Peter C. Georgiopoulos;

 

·                  that certain letter, dated as of January 10, 2011, by and
among the Parent, Oaktree Principal Fund V, L.P., and Oaktree FF Investment Fund
L.P.; and

 

·                  that certain letter agreement, dated as of March 29, 2011, by
and between the Parent and OCM Marine Investments CTB, Ltd.

 

Sch. XII - 1

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