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Exhibit 10.1
 
 
 

 

Date 12 August 2010

GENCO SHIPPING & TRADING LIMITED
as Borrower

- and -

THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders

- and -

THE COMPANIES
listed in Schedule 2
as Guarantors on a joint and several basis

- and -

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Agent and Security Trustee

_______________________________________________________

LOAN AGREEMENT
______________________________________________________

in a total amount of
up to US$100,000,000
to finance five 35,000 (approximately) DWT Bulk Carriers

[logo2.jpg]

 
           ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP
           107 CHEAPSIDE
           LONDON EC2V 6DN
           TEL +44 (0)20 7862 4600
           FAX +44 (0)20 7862 4800
 
 

 
 

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INDEX
 

Clause    Page       1 INTERPRETATION 2       2  AVAILABILITY OF THE LOAN AND
DRAWDOWN 24       3  DRAWDOWN 24       4  CONDITIONS PRECEDENT TO DRAWING 25    
  5  REPAYMENT AND PREPAYMENT 26       6  INTEREST 28       7  CHANGES TO
CALCULATION OF INTEREST 29       8  DEFAULT INTEREST 30       9  GUARANTEE AND
INDEMNITY 31       10  OPERATING ACCOUNTS 34       11  REPRESENTATIONS AND
WARRANTIES 36       12  UNDERTAKINGS 40       13  CORPORATE UNDERTAKINGS OF THE
GUARANTORS 47       14  INSURANCE UNDERTAKINGS 48       15  SHIP UNDERTAKINGS 51
      16  SECURITY COVER 51       17 PAYMENTS AND CALCULATIONS 53       18 
APPLICATION OF RECEIPTS 54       19  EVENTS OF DEFAULT AND ACCELERATION 54      
20  FEES AND EXPENSES 59       21  TAXES; EXPENSES AND INDEMNITIES 60       22 
ILLEGALITY, ETC 62       23  INCREASED COSTS 62       24  SET-OFF 64       25 
TRANSFERS AND CHANGES IN LENDING OFFICES 64       26  VARIATIONS AND WAIVERS 67
      27  NOTICES 68      

 
 
 
 
 

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28  SUPPLEMENTAL 69       29  LAW AND JURISDICTION 70      
SCHEDULE 1  LENDERS AND COMMITMENTS 
72       SCHEDULE 2  GUARANTORS 73       SCHEDULE 3  FORM OF DRAWDOWN NOTICE 74
      SCHEDULE 4  CONDITION PRECEDENT DOCUMENTS 76       SCHEDULE 5   LOAN
REPAYMENT 79       SCHEDULE 6  TRANSFER CERTIFICATE  84       SCHEDULE
7   MANDATORY COSTS  88       SCHEDULE 8   FORM OF MORTGAGE  90       SCHEDULE
9   FORM OF COMPLIANCE CERTIFICATE  91      
EXECUTION PAGE[S] 
95      

 
 
 
 
 
 

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THIS LOAN AGREEMENT is made on 12 August  2010

BETWEEN

(1)  
GENCO SHIPPING & TRADING LIMITED a company organised and existing under the laws
of the Republic of the Marshall Islands (the “Borrower”);

 
(2)  
THE COMPANIES listed in Schedule 2, as Guarantors;

 
(3)  
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

 
(4)  
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Agent; and

 
(5)  
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Security Trustee.

 
BACKGROUND

(A)
The Sellers (defined below) have entered into shipbuilding contracts dated 9 May
2007 with SPP Shipbuilding Co., Ltd. for the construction of five approximately
35,000 DWT Handysize Bulk Carriers referred to in this Agreement as the Vessels.

 
(B)
Pursuant to the MOAs (defined below), the Borrower has agreed to purchase the
Vessels from the Sellers on the terms and conditions set out therein. The
purchase price of each Vessel is (thirty three million, two hundred and fifty
thousand) $33,250,000 (the "Purchase Price") and is payable at the times and in
the manner specified in each MOA.

 
(C)
Each Vessel will be registered under the Liberian flag (or such other
jurisdiction as the Agent upon the direction of the Lenders may agree) in the
name of a Guarantor, each a subsidiary of the Borrower. Each Guarantor has
jointly and severally agreed irrevocably to guarantee the obligations of the
Borrower under this Agreement.

 
 
 
 
 

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(D)
The Vessels are to be employed on time Charters to the Charterer. The Vessels
other than Vessel A and Vessel B are under construction at the shipyard.

 
(E)
The Lenders have agreed to make available to the Borrower a term loan facility
of up to $100,000,000 for the purpose of financing a portion of the Purchase
Price of each Vessel.

 
IT IS AGREED as follows:

1  
INTERPRETATION

 
1.1   Definitions.  Subject to 1.4, in this Agreement:
 
“Acceptable Replacement Vessel” shall mean, with respect to a Mortgaged Vessel,
any vessel with an equal or greater Appraised Value than the Appraised Value of
such Mortgaged Vessel; provided that such vessel must (i) be of the same type
and age as the Mortgaged Vessel it replaces, (ii) be classed with an Approved
Classification Society and (iii) be registered and flagged on Liberian flag or
any other jurisdiction acceptable to the Majority Lenders acting reasonably;
 
“Accounts Pledge” means a deed creating security in respect of each Operating
Account;
 
“Affected Lender” has the meaning given in Clause 7.3;
 
“Affiliate” shall mean, with respect to any Person, any other Person (including,
for purposes of Clause 12.2(j) 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 Clause 12.2(j) an Affiliate of the Borrower shall include any Person
that directly or indirectly owns more than 5% of any class of the capital stock
of the Borrower and any officer or director of the Borrower 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 Clause 12.2(j), neither the Agent, nor
the Security Trustee nor any Lender (or any of their respective affiliates)
shall be deemed to constitute an Affiliate of the Borrower or its Subsidiaries
in connection with the Finance Documents or its dealings or arrangements
relating thereto;
 
“Agency and Security Trust Deed” means the agency and trust agreement executed
or to be executed between the Borrower, the Guarantors, the Lenders, the Agent
and the Security Trustee;
 
“Agent” means Crédit Agricole Corporate and Investment Bank, a société anonyme
with a share capital of EUR 6,055,504,839 registered with SIREN number 304 187
701 at the Registre du Commerce et des Sociétés of Nanterre and whose registered
office is 9, quai du Président Paul Doumer, 92920 Paris La Défense, France
(which term includes any successors in title, its permitted assignees and
transferees);
 
"Annual Fleet Maintenance Reserve Amount" means, for any fiscal year, the
aggregate amount of funds budgeted by the Borrower for such fiscal year to
maintain and drydock the Borrower's fleet during such fiscal year;

“Annual Fleet Renewal Reserve Amount” shall mean, for any fiscal year, the
amount determined by the Borrower’s board of directors acting reasonably to be
an amount which should be reserved and/or expended during such fiscal year for
renewal capital expenditures and/or vessel acquisitions to insure the indefinite
renewal of the Borrower’s fleet, such determination to take into account, inter
alia the remaining life and prevailing asset value of the fleet;
 
 
 
 
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“Appraised Value” of any Vessel at any time shall mean the value of such Vessel
as determined in accordance with Clause 16.3;
 
“Approved Appraiser” means H. Clarksons & Company Limited, Fearnleys Ltd, R.S.
Platou Shipbrokers A.S., Simpson Spence & Young Ltd or such other independent
appraisal firm as the Agent may reasonably approve;
 
“Approved Classification Society” means any of American Bureau of Shipping,
Nippon Kaiji Kyokai, Germanischer Lloyd, Lloyd’s Register of Shipping, Bureau
Veritas and Det Norske Veritas;
 
“Availability Period”  means the period commencing on the date of this Agreement
and ending on:

(a)  
in relation to the Tranche A Loan 30 September 2010;

 
(b)  
in relation to the Tranche B Loan 20 August 2010;

 
(c)  
in relation to the Tranche C Loan 31 July 2011;

 
(d)  
in relation to the Tranche D Loan 30 September 2011; and

 
(e)  
in relation to the Tranche E Loan 31 December 2011;

 
(or in ease case such later date as the Agent may, with the authorisation of all
of the Lenders, agree with the Borrower); or if earlier, the date on which the
Total Commitments are fully borrowed, cancelled or terminated;
 
“Available Cash” shall mean, for any period, Consolidated Net Income for such
period plus Consolidated Interest Expense for such period plus without
duplication the amortisation of deferred finance charges and restricted stock
expenses and Non Cash Charges for such period and the amount of all depreciation
and amortization deducted in determining Consolidated Net Income for such
period;

“Average Consolidated Net Indebtedness” shall mean, on any date of
determination, the average of the Consolidated Net Indebtedness on the last
Business Day of each calendar month during the most recently ended Test Period
and on such date of determination;

“Business Day”  means a day on which banks are open in London, Paris, Stockholm
and New York;

"Capitalized Lease Obligations" with respect to 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;

"Capped Call Arrangements" means, in relation to the Borrower's existing or any
other convertible debt issue, the arrangements with a counterparty to provide
protection on the number of shares that the Borrower would be required to
deliver to the bond holders upon such bond holders exercising their right of
conversion, whereby the counterparty would be responsible for acquiring in the
open market the relevant number of shares when the conversion price is between a
predetermined floor and ceiling;

“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
 
 
 
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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 Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or at
least P-1 or the equivalent thereof by Moody’s Investors Services, Inc. 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;

“Change of Control” means (i) the Borrower shall at any time and for any reason
fail to own, directly or indirectly, 100% of the capital stock or other equity
interests of each Guarantor, (ii) the sale, lease or transfer of all or
substantially all of the Borrower’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 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 Borrower, (v) the
replacement of a majority of the directors on the board of directors of the
Borrower over a two-year period from the directors who constituted the board of
directors of the Borrower 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 Borrower 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, (vi) a “change of
control” or similar event shall occur as provided in any outstanding
Indebtedness of Borrower or any of its Subsidiaries (or the documentation
governing the same) or (vii) the Borrower’s common stock shall cease to be
traded on the New York Stock Exchange or any other internationally recognised
stock exchange;
 
“Charter” means, with respect to any Vessel, the agreement to charter entered
into in respect of such Vessel between the Guarantor which owns such Vessel and
the Charterer, or any charter which replaces such charter (i.e. made between a
Guarantor and a company other than the Charterer) during the period of the Loan;
 
"Charterer" means Cargill International S.A.;
 
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. 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 therefore;
 
“Collateral” means each asset that in accordance with the terms of any Finance
Document is intended to be subject to any Security Interest in favour of the
Security Trustee or the Agent;
 
“Commercial Manager“ means the Borrower, or a Wholly-Owned Subsidiary of the
Borrower, or any other company which the Agent may, approve from time to time as
commercial manager of a Vessel, which consent is not to be unreasonably
withheld;
 
“Commitment”  means, in relation to a Lender and any Tranche, the amount set
opposite such Lender’s name in Schedule 1 under the heading “Tranche A
Commitment” for Tranche A, “Tranche B Commitment” for Tranche B, “Tranche C
Commitment” for Tranche C, “Tranche D Commitment” for Trance D and “Tranche E
Commitment” for Tranche E or, as the case may require, the amount specified in
the relevant Transfer Certificate, as that amount may be reduced, cancelled or
terminated in accordance with this Agreement;
 
 
 
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“Consolidated EBIT” shall mean, for any period, the Consolidated Net Income for
such period, before interest expense 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;

“Consolidated EBITDA” shall mean, for any period, Consolidated EBIT, adjusted by
adding thereto the amount of (i) all amortization of intangibles and
depreciation, (ii) non-cash management incentive compensation, (iii) the
amortization of fees and expenses paid in connection with the Transaction and
(iv) any Non-Cash Charges in each case that were deducted in arriving at
Consolidated EBITDA 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 but excluding Indebtedness of
a type described in clause (vii) of the definition thereof) of the Borrower 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 Borrower or any
Wholly-Owned Subsidiary of the Borrower to the extent such lease is not
prohibited 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 Interest Coverage Ratio” shall mean, for any period, the ratio of
(i) Consolidated EBITDA for such period to (ii) Consolidated Interest Expense
for such period;

“Consolidated Interest Expense” shall mean, for any period, (i) the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion of Capitalized Lease Obligations of the
Borrower and its Subsidiaries representing the interest factor for such period,
minus (ii) cash interest income of the Borrower and its Subsidiaries for such
period and the amortization of any deferred financing costs and Non-Cash Charges
incurred in connection with the Transaction to the extent otherwise included in
the calculations thereof;

“Consolidated Net Income” shall mean, for any period, the consolidated net after
tax income of the Borrower and its Subsidiaries for such period determined in
accordance with GAAP; provided that solely for any calculation of “Consolidated
EBIT,” “Consolidated Net Income” shall not include any gains or losses arising
from any Interest Rate Protection Agreement and Other Hedging Agreements;

“Consolidated Net Indebtedness” shall mean, as at any date of determination, the
remainder of (i) the Consolidated Indebtedness on such date minus (ii) the
aggregate amount of Unrestricted cash and Cash Equivalents of the Borrower and
its Subsidiaries on such date;

"Consolidated Net Worth" shall mean the Net Worth of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP after
appropriate deduction for any minority interests in Subsidiaries;

“Contingent Obligation” shall mean, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends
or other obligations (“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 therefore, (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
 
 
 
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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 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;

“Contribution” means, in relation to a Lender, the part of a Drawing which is
owing to that Lender;
 
“Creditor Party” means the Agent, the Security Trustee or any Lender, whether as
at the date of this Agreement or at any later time;
 
"DB Credit Facility" means the credit agreement made or to be made between the
Borrower, Deutsche Bank Luxembourg S.A. as agent and others relating to a loan
facility of up to $253,000,000 (as amended and supplemented from time to time);
 
“Delivery Date” means, in respect of each Vessel, the date (being a Business
Day) of delivery and acceptance of that Vessel under the relevant MOA;
 
“Dividend” with respect to any Person shall mean that such Person has declared
or paid a dividend or returned any equity capital to its stockholders, partners
or members or made any other distribution, payment or delivery of property
(other than common stock or the right to purchase any of such stock of such
Person) or cash to its stockholders, partners or members as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock or partnership or
membership interests outstanding on or after the Effective Date (or any options
or warrants issued by such Person with respect to its capital stock or other
equity interests), or set aside any funds for any of the foregoing purposes, or
shall have permitted any of its Subsidiaries to purchase or otherwise acquire
for a consideration any shares of any class of the capital stock of, or equity
interests in, such Person outstanding on or after the Effective 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, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes;
 
“DnB Credit Facility” means the credit agreement among the Borrower, various
lenders, DnB NOR Bank ASA, New York Branch as administrative agent and
collateral agent and DnB NOR Bank ASA, New York Branch as mandated lead arranger
and bookrunner dated as of 20 July 2007 as amended and supplemented;
 
“Dollars” and “$” means the lawful currency for the time being of the United
States of America;
 
“Drawdown Date” means the date requested by the Borrower for the relevant Loan
to be made, or (as the context requires) the date on which such Loan is actually
made;
 
"Drawing" means each advance of a Loan under this Agreement;
 
“Drawdown Notice” means a notice in the form set out in Schedule 3 (or in any
other form which the Agent approves or reasonably requires);
 
 
 
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“Earnings”  means all moneys whatsoever which are now, or later become, payable
(actually or contingently) to the Borrower, the Guarantors or the Security
Trustee and which arise out of the use or operation of a Vessel, including (but
not limited to):
 
(a)  
all freight, hire and passage moneys, compensation payable to the Borrower, the
Guarantors or the Security Trustee in the event of requisition of a Vessel for
hire, remuneration for salvage and towage services, demurrage and detention
moneys and damages for breach (or payments for variation or termination) of any
charterparty or other contract for the employment of a Vessel;

 
(b)  
all moneys which are at any time payable under Insurances in respect of loss of
earnings; and

 
(c)  
if and whenever a Vessel is employed on terms whereby any moneys falling within
paragraphs (a) or (b) are pooled or shared with any other person, that
proportion of the net receipts of the relevant pooling or sharing arrangement
which is attributable to a Vessel;

 
"Effective Date" has the meaning given to that term in Clause 28.5;
 
“Environmental Claim”  means:
 
(a)  
any claim by any governmental, judicial or regulatory authority which arises out
of an Environmental Incident or an alleged Environmental Incident or which
relates to any Environmental Law; or

 
(b)  
any claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident;

 
and “claim” means a claim for damages, compensation, fines, penalties or any
other payment of any kind whether or not similar to the foregoing; an order or
direction to take, or not to take, certain action or to desist from or suspend
certain action; and any form of enforcement or regulatory action, including the
arrest or attachment of any asset;
 
“Environmental Incident” means:
 
(a)  
any release of Environmentally Sensitive Material from a Vessel;

 
(b)  
any incident in which Environmentally Sensitive Material is released from a
vessel other than a Vessel under this Agreement and which involves a collision
between a Vessel and such other vessel or some other incident of navigation or
operation, in either case, in connection with which the Vessel is actually or
potentially liable to be arrested, attached, detained or injuncted and/or the
Vessel and/or the Borrower, Guarantors, the Charterer, the Technical Manager,
the Commercial Manager and/or any owner, operator or manager of a Vessel is at
fault or allegedly at fault or otherwise liable to any legal or administrative
action; or

 
(c)  
any other incident in which Environmentally Sensitive Material is released
otherwise than from a Vessel and in connection with which a Vessel is actually
or potentially liable to be arrested and/or where the Borrower the Guarantors,
the Technical Manager, the Commercial Manager and/or any operator or manager of
a Vessel is at fault or allegedly at fault or otherwise liable to any legal or
administrative action;

 
“Environmental Law” means any law relating to pollution or protection of the
environment, to the carriage of Environmentally Sensitive Material or to actual
or threatened releases of Environmentally Sensitive Material;
 
 
 
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“Environmentally Sensitive Material” means oil, oil products and any other
substance (including any chemical, gas or other hazardous or noxious substance)
which is (or is capable of being or becoming) polluting, toxic or hazardous;
 
“Equity Interests” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any preferred stock,
any limited or general partnership interest and any limited liability company
membership interest;
 
“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 therefore;
 
“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with the Borrower or a Subsidiary of the Borrower would be deemed
to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o)
of the Code;
 
“Event of Default” means any of the events or circumstances described in Clause
19.1;
 
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;
 
“Facility” means the term loan facility made available to the Borrower pursuant
to Clause 2 by way of each Tranche;

"Fee Letter" means the letter made between the Borrower and the Agent setting
out the fees payable by the Borrower in connection with the Facility;
 
"Final Maturity Date" means the earlier of (i) the date corresponding to the
seventh (7th) anniversary of the first Drawdown Date and (ii) August 20, 2017.

“Finance Documents” means:
 
(a)  
this Agreement;

 
(b)  
the Agency and Security Trust Deed;

 
(c)  
each Mortgage;

 
(d)  
the General Assignment Deed;

 
(e)  
the Accounts Pledge;

 
(f)  
the Share Charge; and

 
(g)  
any other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower or any other person as security for, or to
establish any form of subordination or priorities arrangement in relation to,
any amount payable to the Lenders under this Agreement or any of the other
documents referred to in this definition;

 
(each a "Finance Document");
 
“Financial Indebtedness” means, in relation to a person (the “debtor”), a
liability of the debtor:
 
 
 
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(a)  
for principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;

 
(b)  
under any loan stock, bond, note or other security issued by the debtor;

 
(c)  
under any acceptance credit, guarantee or letter of credit facility made
available to the debtor;

 
(d)  
under a financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or raising of money
by the debtor (but for the avoidance of doubt excluding any operating lease);

 
(e)  
under any foreign exchange transaction, any interest or currency swap or any
other kind of derivative transaction entered into by the debtor or, if the
agreement under which any such transaction is entered into requires netting of
mutual liabilities, the liability of the debtor for the net amount; or

 
(f)  
under a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within paragraphs (a)
to (e) if the references to the debtor referred to the other person;

 
"First Repayment Date" means:
 
(a)  
in relation to Tranche A, the last day of the calendar quarter in which the
Drawing in relation to Tranche A is made;

 
(b)  
in relation to Tranche B, the last day of the calendar quarter in which the
Drawing in relation to Tranche B is made;

 
(c)  
in relation to Tranche C, the last day of the calendar quarter in which the
Drawing in relation to Tranche C is made;

 
(d)  
in relation to Tranche D, the last day of the calendar quarter in which the
Drawing in relation to Tranche D is made; and

 
(e)  
in relation to Tranche E, the last day of the calendar quarter in which the
Drawing in relation to Tranche E is made;

 
“Fleet Maintenance Reserve” shall mean for a fiscal quarter one quarter of the
Annual Fleet Maintenance Reserve Amount for the fiscal year in which such fiscal
quarter occurs;
 
“Fleet Renewal Reserve” shall mean for a fiscal quarter one quarter of the
Annual Fleet Reserve Renewal Amount for the fiscal year in which such fiscal
quarter 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 Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of the Borrower 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” means in relation to any Obligor, the generally accepted accounting
principles, standards and practices in the United States of America;
 
“General Assignment Deed” means a general assignment of the Charters, the
Earnings, the Insurances and any Requisition Compensation as set out therein, by
the Guarantors in favour of the Security Trustee;
 
 
 
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“Guarantors” means, collectively, the Vessel A Guarantor, the Vessel B
Guarantor, the Vessel C Guarantor, the Vessel D Guarantor and the Vessel E
Guarantor and “Guarantor” means any of them and any other Person who owns a
Mortgaged Vessel which is exchanged for another Mortgaged Vessel pursuant to a
Vessel Exchange;
 
“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
(including 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 or Other Hedging
Agreement 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;

“Insurances” means:
 
(a)  
all policies and contracts of insurance, including entries of a Vessel in any
protection and indemnity or war risks association, which are effected in respect
of a Vessel, its Earnings or otherwise in relation to it; and

 
(b)  
all rights and other assets relating to, or derived from, any of the foregoing,
including any rights to a return of a premium;

 
“Interest Period”  means a period determined in accordance with Clause 6.1(f);
 
“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;
 
“ISM Code” means the International Safety Management Code (including the
guidelines on its implementation), adopted by the International Maritime
Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may
be amended or supplemented from time to time (and the terms “safety management
system”, “Safety Management Certificate” and “Document of Compliance” have the
same meanings as are given to them in the ISM Code);
 
“Lender” means a bank or financial institution listed in Schedule 1 and its
permitted transferees, successors and assigns;
 
"Leverage Ratio" shall mean, at any date of determination, the ratio of Average
Consolidated Net Indebtedness on such date of determination to Consolidated
EBITDA for the most recently ended Test Period;
 
“LIBOR” means, for an Interest Period, the rate per annum determined by the
Agent to be the arithmetic mean of the rates per annum notified to the Agent by
each Reference Bank as the rate at which deposits in Dollars are offered to that
Reference Bank by leading banks in the London Interbank Market at that Reference
Bank's request at or about 11.00 a.m. (London time) on the Quotation Date for
that Interest Period for a period equal to that Interest Period and for delivery
on the first Business Day of it;
 
 
 
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“Loan” means any of the Tranche A Loan, the Tranche B Loan, the Tranche C Loan,
the Tranche D Loan or the Tranche E Loan or, where the context requires, the
aggregate principal amount for the time being outstanding under this Agreement
in respect of all such Loans;
 
“Major Casualty” means any casualty to a Vessel in respect of which the claim or
the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds $2,000,000 or the equivalent in any
other currency;
 
“Majority Lenders”  means:
 
(a)  
before any Loan has been made, Lenders whose Commitments total 66.66 per cent.
of the Total Commitments; and

 
(b)  
after any Loan has been made, Lenders whose Contributions total 66.66 per cent.
of the Loan;

 
“Mandatory Costs”  means the percentage rate per annum calculated by the Agent
in accordance with Schedule 7;
 
 
“Margin” means 3 per cent. per annum;

 
“Master Account” has the meaning given to that term in Clause 10.2(a)(vi);
 
“Material Adverse Effect” shall mean a material adverse effect on the (i)
transactions contemplated by the Finance Documents, (ii) business, property,
assets, liabilities, condition (financial or otherwise), operations or prospects
(x) of the Vessels or (y) the Borrower and the Guarantors taken as a whole,
(iii) rights or remedies available to the Agent or the Lenders under the Finance
Documents or (iv) ability of any Obligor to perform its obligations under the
Finance Documents to which it is a party;
 
“Minimum Balance” has the meaning given to that term in Clause 10.2(c);
 
“Minimum Consolidated Net Worth” shall mean not less than five hundred and
ninety million and seven hundred and fifty thousand Dollars ($590,750,000) plus
80% of any future equity offering;
 
“MOAs”  means:
 
(a)  
in relation to Vessel A, the memorandum of agreement dated 3 June 2010 entered
into in respect of Vessel A between the Vessel A Seller and the Borrower in
respect of the sale of Vessel A;

 
(b)  
in relation to Vessel B, the memorandum of agreement dated 3 June 2010 entered
into in respect of Vessel B between the Vessel B Seller and the Borrower in
respect of the sale of Vessel B;

 
(c)  
in relation to Vessel C, the memorandum of agreement dated 3 June 2010 entered
into in respect of Vessel C between the Vessel C Seller and the Borrower in
respect of the sale of Vessel C;

 
(d)  
in relation to Vessel D, the memorandum of agreement dated 3 June 2010 entered
into in respect of Vessel D between the Vessel D Seller and the Borrower in
respect of the sale of Vessel D; and

 
(e)  
in relation to Vessel E, the memorandum of agreement dated 3 June 2010 entered
into in respect of Vessel E between the Vessel E Seller and the Borrower in
respect of the sale of Vessel E;

 
 
 
 
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“Mortgage” means, with respect to each Mortgaged Vessel, the first preferred
Liberian ship mortgage on that Vessel to be signed on the Drawdown Date of the
Tranche relating to such Vessel (or, if the Mortgaged Vessel is an Acceptable
Replacement Vessel, on the Vessel Exchange Date) by the relevant Guarantor in
favour of the Security Trustee, in the form of Schedule 8 hereto (or, if the
Vessel is registered in a jurisdiction other than Liberia with the prior written
consent of the Agent acting upon the direction of the Lenders, a first preferred
ship mortgage under the laws of that jurisdiction);
 
"Mortgaged Vessels" shall mean, collectively, all vessels mortgaged to the
Security Trustee hereunder and, individually, any of such vessels;
 
“Multiemployer Plan” shall mean a Plan which is defined in Section 3(37) of
ERISA;
 
"Net Worth" shall mean, as to a Person, the sum of its capital stock, capital in
excess of par or stated value of shares of its capital stock, retained earnings
and other accounts which in accordance with GAAP constitutes stockholders'
equity, but excluding treasury stocks;

"Non-Cash Charges" means the unamortized charges incurred by the Borrower
associated with any credit facility of the Borrower or its Subsidiaries that is
charged to expense due to the refinancing of the aforementioned, and any
non-cash loss related to the Borrower’s investment in Jinui Shipping and
Transportation Limited;

“Negotiation Period” has the meaning given in Clause 7.6;
 
“Notifying Lender” has the meaning given in Clause 22.1 or Clause 23.1 as the
context requires;
 
"Obligors" means the Borrower and the Guarantors and "Obligor" means any of
them;
 
"OFAC" has the meaning given to such term in Clause 11.2(m);

“Operating Accounts” means (i) the five separate accounts each in the name of a
Guarantor in respect of the Vessel owned or to be owned by that Guarantor and
(ii) the Master Account, in each case opened with the Agent as set out in Clause
10;

“Operating Costs” means, with respect to any Vessel, costs and expenses properly
incurred in respect of the day to day operation of such Vessel;
 
“Other Hedging Agreement” shall mean any foreign exchange contracts, currency
swap agreements, commodity agreements, forward freight agreements or other
similar agreements or arrangements designed to protect against the fluctuations
in currency or commodity values;
 
"PATRIOT Act" has the meaning given to that term in Clause 28.6;
 
“Permitted Dividend Amount” shall mean, for each fiscal quarter of the Borrower,
(i) the sum of (x) Available Cash for such fiscal quarter and (y) the Permitted
Dividend Carry Forward Amount for the immediately preceding fiscal quarter minus
(ii) the sum of (a) the Fleet Maintenance Reserve for such fiscal quarter (b)
the Fleet Renewal Reserve for such fiscal quarter and (c) Consolidated Interest
Expense for such fiscal quarter; provided that the aggregate amount of all
Dividends made pursuant to Clause 12.2(g) as a result of this subclause (y)
shall not exceed US$150,000,000;
 
“Permitted Dividend Carry Forward Amount” shall mean for each fiscal quarter the
Permitted Dividend Amount for such fiscal quarter; provided that to the extent
the Permitted Dividend Amount for any fiscal quarter is a positive amount, only
the portion of the Permitted Dividend Amount that has not been distributed as a
Dividend pursuant to Clause 12.2(g) shall be included in the calculation;
 
 
 
 
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“Permitted Holders” means (i) Peter Georgiopoulos (including his immediate
family members and trusts for his benefit and/or for the benefit of his
immediate family members) and any corporation or other entity directly or
indirectly controlled by Peter Georgiopoulos and (ii) Oaktree Capital
Management, LLC and any corporation or other entity directly or indirectly
controlled by Oaktree Capital Management, LLC;
 
“Permitted Security Interests” means:

(a)  
Security Interests created by the Finance Documents;

 
(b)  
liens for unpaid master’s and crew’s wages in accordance with usual maritime
practice;

 
(c)  
liens for salvage;

 
(d)  
liens arising by operation of law for not more than 2 months’ prepaid hire under
any charter in relation to a Vessel not prohibited by this Agreement;

 
(e)  
liens for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary course
of the operation, repair or maintenance of a Vessel, provided such liens do not
secure amounts more than 30 days overdue (unless the overdue amount is being
contested by the Borrower in good faith by appropriate steps) and subject, in
the case of liens for repair or maintenance to article II section 9(c) of each
Mortgage;

 
(f)  
any Security Interest created in favour of a plaintiff or defendant in any
proceedings or arbitration as security for costs and expenses where the Borrower
is actively prosecuting or defending such proceedings or arbitration in good
faith; and

 
(g)  
Security Interests arising by operation of law in respect of taxes which are not
overdue for payment or in respect of taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been made;

 
“Pertinent Document” means:

(a)  
any Finance Document;

 
(b)  
any policy or contract of insurance contemplated by or referred to in a Mortgage
or any other provision of this Agreement or another Finance Document;

 
(c)  
any other document contemplated by or referred to in any Finance Document; and

 
 
         (d)
any document which has been or is at any time sent by or to a Servicing Bank in
contemplation of or in connection with any Finance Document or any policy,
contract or document falling within paragraphs (b) or (c);

 
“Pertinent Jurisdiction”, in relation to a company, means:
 
(a)  
the country under the laws of which the company is incorporated or formed;

 
(b)  
a country in which the company's central management and control is or has
recently been exercised;

 
(c)  
a country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax;

 
(d)  
a country in which assets of the company (other than securities issued by, or
loans to, related companies) having a substantial value are situated, in which
the company maintains a permanent place of business, or in which a Security
Interest created by the company must or should be registered in order to ensure
its validity or priority; and

 
 
 
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(e)  
a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would have
such jurisdiction if their assistance were requested by the courts of a country
referred to in paragraphs (a) or (b);

 
“Pertinent Matter” means:

(a)  
any transaction or matter contemplated by, arising out of, or connection with a
Pertinent Document; or

 
(b)  
any statement relating to a Pertinent Document or to a transaction or matter
falling within paragraph (a);

 
and covers any such transaction, matter or statement, whether entered into,
arising or made at any time before the signing of this Agreement or on or at any
time after that signing;

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

“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 to) the Borrower or a Subsidiary of the Borrower or any ERISA
Affiliate, and each such plan for the five-year period immediately following the
latest date on which the Borrower, or a Subsidiary of the Borrower or any ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan;
 
“Potential Event of Default”  means an event or circumstance which, with the
giving of any notice, the lapse of time, a determination of the Majority Lenders
and/or the satisfaction of any other condition, would constitute an Event of
Default;
 
"Purchase Price" has the meaning given to that term in Recital B of this
Agreement;
 
“Quotation Date”  means, in relation to any Interest Period (or any other period
for which an interest rate is to be determined under any provision of a Finance
Document), the day on which quotations would ordinarily be given by leading
banks in the London Interbank Market for deposits in the currency in relation to
which such rate is to be determined for delivery on the first day of that
Interest Period or other period;
 
“Reference Banks”  means the principal offices in London of Crédit Agricole
Corporate, Investment Bank, Crédit Industriel et Commercial and Skandinaviska
Enskilda Banken AB (publ) and such other banks as may be appointed by the Agent
in consultation with the Borrower;
 
“Repayment Date” means a date on which a repayment is required to be made under
Clause 5 and Schedule 5;
 
“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;
 
“Requisition Compensation”  includes all compensation or other moneys payable by
reason of any act or event such as is referred to in paragraph (b) of the
definition of “Total Loss”;
 
 
 
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“Restricted” shall mean, when referring to Cash or Cash Equivalents of the
Borrower or any of its Subsidiaries, that such Cash or Cash Equivalents:
 
(a)  
appears (or would be required to appear) as “Restricted” on a consolidated
balance sheet of the Borrower or of any such Subsidiary (unless such appearance
is related to the Finance Documents or Security Interests created thereunder);

 
(b)  
are subject to any lien in favour of any Person other than the Security Trustee
or the Agent for the benefit of the Creditor Parties; or

 
(c)  
are not otherwise generally available for use by the Borrower or such
Subsidiary;

 
“Screen Rate”  means the British Bankers’ Association Interest Settlement Rate
for Dollars for the relevant period displayed on the appropriate page of the
Telerate screen. If the agreed page is replaced or service ceases to be
available, the Agent may specify another page or service displaying the
appropriate rate after consultation with the Borrower and the Lenders;
 
“SEC” means the United States Securities and Exchange Commission;
 
“Secured Liabilities”  means all liabilities which the Borrower, the Guarantors
or any of them have, at the date of this Agreement or at any later time or
times, under or in connection with any Finance Document or any judgment relating
to any Finance Documents; and for this purpose, there shall be disregarded any
total or partial discharge of these liabilities, or variation of their terms,
which is effected by, or in connection with, any bankruptcy, liquidation,
arrangement or other procedure under the insolvency laws of any country;
 
“Security Interest”  means:
 
(a)  
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other
lien or any other security interest of any kind;

 
(b)  
the security rights of a plaintiff under an action in rem; and

 
(c)  
any arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to the
position in which B would have been had he held a security interest over an
asset of A; but this paragraph (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of business of a bank or
financial institution;

 
“Security Period” means the period commencing on the date of this Agreement and
ending on the date on which the Agent notifies the Obligors and the other
Creditor Parties that:
 
(a)  
the Availability Period for each Loan has expired and all amounts which have
become due for payment by the Borrower or any Obligor under the Finance
Documents have been paid;

 
(b)  
no amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;

 
(c)  
neither the Borrower nor any Obligor has any future or contingent liability
under Clause 20 or 21 or any other provision of this Agreement or another
Finance Document; and

 
(d)  
the Agent, the Security Trustee and the Majority Lenders do not consider that
there is a significant risk that any payment or transaction under a Finance
Document  would be set aside, or would have to be reversed or adjusted, in any
present or 

 
 
 
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possible future bankruptcy of the Borrower or any of the Guarantors or in any
present or possible future proceeding relating to a Finance Document or any
asset covered (or previously covered) by a Security Interest created by a
Finance Document;

 
“Security Trustee” means Crédit Agricole Corporate and Investment Bank, a
société anonyme with a share capital of EUR 6,055,504,839 registered with SIREN
number 304 187 701 at the Registre du Commerce et des Sociétés of Nanterre and
whose registered office is 9, quai du Président Paul Doumer, 92920 Paris La
Défense, France (which term includes any successors in title, its permitted
assignees and transferees) not in its individual capacity, but solely as
security trustee under the Agency and Security Trust Deed;
 
“Seller” means any of the Vessel A Seller, the Vessel B Seller, the Vessel C
Seller, the Vessel D Seller or the Vessel E Seller;
 
“Servicing Bank” means the Agent or the Security Trustee;
 
“Share Charge” means the share charge executed or (as the case may be) to be
executed by the legal and beneficial owners of the issued share capital in the
Guarantors in favour of the Security Trustee;
 
“Shareholder Rights Agreement” shall mean the Shareholders Rights Agreement
entered into as of March 1, 2007 by and between the Borrower and Mellon Investor
Services LLC, a New Jersey limited liability company, as Rights Agent without
giving effect to any amendments, modifications or supplements thereto;
 
“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 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;
 

"Tax" means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty, surcharge or interest payable in
connection with any failure to pay or any delay in paying any of the same);
 
“Technical Manager”  means the Borrower, Wallem Limited, Anglo-Eastern Ship
Management Limited, Thome Shipmanagement Pte Ltd., V Ships Limited or any other
company which the Agent may approve from time to time as the technical manager
of a Vessel or all of the Vessels, which consent is not to be unreasonably
withheld;
 
“Test Period” shall mean each period of four consecutive fiscal quarters then
last ended, in each case taken as one accounting period;

“Total Commitments” means, collectively, the Total Tranche A Commitments, Total
Tranche B Commitments, Total Tranche C Commitments, Total Tranche D Commitments
and Total Tranche E Commitments;

"Total Loss" means in relation to any Vessel:
 
(a)  
any actual, constructive, compromised, agreed or arranged total loss of a
Vessel;

 
(b)  
any expropriation, confiscation, requisition, condemnation, purchase, forfeiture
or acquisition of  or taking title to  that Vessel, whether for full
consideration, a consideration less than its proper value, a nominal
consideration or without any consideration, which is effected by any government
or official authority or by any person or persons claiming to be or to represent
a government or official authority

 
 
 
 
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(excluding a requisition for hire for a fixed period not exceeding 1 year
without any right to an extension), unless it is within 1 month redelivered to
the relevant Guarantor's full control; or
 
(c)  
any arrest, capture, seizure or detention of the Vessel (including any hijacking
or theft) unless it is within 1 month redelivered to the relevant Guarantor's
full control;

 
“Total Loss Date” means in relation to a Vessel:
 
(a)  
in the case of an actual loss of a Vessel, the date on which it occurred or, if
that is unknown, the date when the Vessel was last heard of;

 
(b)  
in the case of a constructive, compromised, agreed or arranged total loss of the
Vessel, the earliest of:

 
(i)  
the date on which a notice of abandonment is given to the insurers; and

 
(ii)  
the date of any compromise, arrangement or agreement made by or on behalf of the
relevant Guarantor, with the Vessel's insurers in which the insurers agree to
treat the Vessel as a total loss; and

 
(c)  
in the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Agent that the event constituting the total
loss occurred;

 
“Tranche” means Tranche A, Tranche B, Tranche C, Tranche D or Tranche E, (as
applicable);
 
"Tranche A" means the part of the Facility described in Clause 2.1(a);
 
“Tranche A Commitment” means, in relation to a Lender, the amount set opposite
its name in Schedule 1 under the heading “Tranche A Commitment”, or, as the case
may require, the amount transferred by a Lender pursuant to Clause 25.2, as that
amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “Total Tranche A Commitments”  means the aggregate of the Tranche A
Commitments of all the Lenders);
 
"Tranche A Loan" means the loan made or to be made under Tranche A or the
principal amount outstanding for the time being of such loan;
 
"Tranche B"  means the part of the Facility described in Clause 2.1(b);
 
“Tranche B Commitment”  means, in relation to a Lender, the amount set opposite
its name in Schedule 1 under the heading “Tranche B Commitment”, or, as the case
may require, the amount transferred by a Lender pursuant to Clause 25.2, as that
amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “Total Tranche B Commitments” means the aggregate of the Tranche B
Commitments of all the Lenders);
 
"Tranche B Loan" means the loan made or to be made under Tranche B or the
principal amount outstanding for the time being of such loan;
 
"Tranche C" means the part of the Facility described in Clause 2.1(c);
 
“Tranche C Commitment” means, in relation to a Lender, the amount set opposite
its name in Schedule 1 under the heading “Tranche C Commitment”, or, as the case
may require, the amount transferred by a Lender pursuant to Clause 25.2, as that
amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “Total Tranche C Commitments” means the aggregate of the Tranche C
Commitments of all the Lenders);
 
 
 
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"Tranche C Loan" means the loan made or to be made under Tranche C or the
principal amount outstanding for the time being of such loan;
 
"Tranche D" means the part of the Facility described in Clause 2.1(d);
 
“Tranche D Commitment” means, in relation to a Lender, the amount set opposite
its name in Schedule 1 under the heading “Tranche D Commitment”, or, as the case
may require, the amount transferred by a Lender pursuant to Clause 25.2, as that
amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “Total Tranche D Commitments” means the aggregate of the Tranche D
Commitments of all the Lenders);
 
"Tranche D Loan" means the loan made or to be made under Tranche D or the
principal amount outstanding for the time being of such loan;
 
"Tranche E" means the part of the Facility described in Clause 2.1(e);
 
“Tranche E Commitment” means, in relation to a Lender, the amount set opposite
its name in Schedule 1 under the heading “Tranche E Commitment”, or, as the case
may require, the amount transferred by a Lender pursuant to Clause 25.2, as that
amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “Total Tranche E Commitments” means the aggregate of the Tranche E
Commitments of all the Lenders);
 
"Tranche E Loan" means the loan made or to be made under Tranche E or the
principal amount outstanding for the time being of such loan;
 
“Transaction” shall mean, collectively, (i) the entering into of the Finance
Documents and the incurrence of Loans hereunder, (ii) the incurrence of any
Financial Indebtedness of the Borrower permitted pursuant to the terms of this
Agreement, (iii) the payment of all fees and expenses in connection with the
foregoing and (iv) the transactions contemplated thereby;
 
“Transaction Documents” means:
 
(a)  
this Agreement;

 
(b)  
each Charter;

 
(c)  
each other Finance Document;

 
(d)  
any other document, notice, letter or instrument entered into, issued or given
pursuant to the express terms of any of the foregoing; and

 
(e)  
any other document, notice, letter or instrument designated as a Transaction
Document by the Agent and the Borrower;

 
and “Transaction Document” means any of them;
 
“Transfer Certificate” has the meaning given in Clause 25.2;
 
“Trust Property”  has the meaning given in the Agency and  Security Trust Deed;
 
“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);
 
 
 
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“Unrestricted” shall mean, when referring to cash or Cash Equivalents owned by
the Borrower or any of its Subsidiaries, that such cash or Cash Equivalents are
not Restricted;

"Vessel" means Vessel A, Vessel B, Vessel C, Vessel D or Vessel E, as
appropriate (each as more specifically described in the relevant MOA) and, where
the context requires any Mortgaged Vessel exchanged for another Mortgaged Vessel
pursuant to a Vessel Exchange and together the “Vessels”;
 
“Vessel A” means the Liberian flag vessel Genco Bay, Official Number 14572;
 
"Vessel A Guarantor" means Genco Bay Limited, a company organised and existing
under the laws of the Republic of the Marshall Islands;
 
"Vessel A Seller" means Hesperos Holdings S.A., the Seller of Vessel A;
 
“Vessel B” means the Liberian flag vessel Genco Ocean, Official Number 14783;
 
"Vessel B Guarantor" means Genco Ocean Limited, a company organised and existing
under the laws of the Republic of the Marshall Islands;
 
"Vessel B Seller" means Princeton Shipholding S.A., the Seller of Vessel B;
 
“Vessel C” means the Liberian flag vessel Handy Avra to be renamed Genco Avra,
Official Number 14797;
 
"Vessel C Guarantor" means Genco Avra Limited, a company organised and existing
under the laws of the Republic of the Marshall Islands;
 
"Vessel C Seller" means Sillem Shipholding Limited, the Seller of Vessel C;
 
“Vessel D” means the Liberian flag vessel Handy Mare to be renamed Genco Mare,
Official Number 14798;
 
"Vessel D Guarantor" means Genco Mare Limited, a company organised and existing
under the laws of the Republic of the Marshall Islands;
 
"Vessel D Seller" means Vanderlin Maritime Inc., the Seller of Vessel D;
 
“Vessel E” means the Liberian flag vessel Hull Spirit to be renamed Genco
Spirit, Official Number 14799;
 
"Vessel E Guarantor" means Genco Spirit Limited, a company organised and
existing under the laws of the Republic of the Marshall Islands;
 
"Vessel E Seller" means Seafarer Shipping and Trading Company, the Seller of
Vessel E;
 
“Vessel Exchange” shall mean the exchange of a Mortgaged Vessel which has
suffered a Total Loss for an Acceptable Replacement Vessel and provided that the
following conditions are satisfied with respect to such exchange:
 
(a)  
On each Vessel Exchange Date, if the Subsidiary of the Borrower owning the
Acceptable Replacement Vessel is not a Guarantor, (A) such Subsidiary shall
execute and deliver an accession deed to this Agreement and (B) the Borrower
shall pledge and deliver, or cause to be pledged and delivered, all of the
capital stock of such Subsidiary to the Security Trustee;

 
(b)  
On each Vessel Exchange Date, the Agent shall have received from counsel
acceptable to the Agent consummating the relevant Vessel Exchange opinions

 
 
 
 
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reasonably satisfactory to the Agent practicing in those jurisdictions in which
the Acceptable Replacement Vessel is registered and/or the Guarantor owning such
Acceptable Replacement Vessel is organized, which opinions shall be addressed to
the Agent and each of the Lenders and dated such Vessel Exchange Date, which
shall (x) be in form and substance reasonably acceptable to the Agent and
(y) cover the perfection of the security interests granted pursuant to the
Mortgage(s) and such other matters incident thereto as the Agent may reasonably
request;
 
(c)  
On each Vessel Exchange Date, the Guarantor which is consummating a Vessel
Exchange on such date shall have duly authorized, executed and delivered a
General Assignment Deed and Accounts Pledge in each case together with:

 
(i)  
proper Financing Statements (Form UCC-1) fully executed for filing under the UCC
or in other appropriate filing offices of each jurisdiction as may be necessary
or, in the reasonable opinion of the Agent, desirable to perfect the security
interests purported to be created by the General Assignment Deed and Accounts
Pledge;

 
(ii)  
certified copies of Requests for Information or Copies (Form UCC-11), or
equivalent reports, listing all effective financing statements that name any
Guarantor as debtor and that are filed in the jurisdictions referred to in
clause (A) above, together with copies of such other financing statements (none
of which shall cover the Collateral except to the extent evidencing Permitted
Security Interests unless in respect of which the 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

 
(iii)  
evidence that all other actions necessary or, in the reasonable opinion of the
Agent, desirable to perfect and protect the security interests purported to be
created by the General Assignment Deed and Accounts Pledge have been taken;

 
(d)  
On each Vessel Exchange Date, the Guarantor which is consummating a Vessel
Exchange on such date shall have duly authorized, executed and delivered, and
caused to be recorded in the appropriate vessel registry a Mortgage with respect
to such Acceptable Replacement Vessel and such Mortgage shall be effective to
create in favour of the Security Trustee and/or the Lenders a legal, valid and
enforceable first priority security interest, in and lien upon such Acceptable
Replacement Vessel, subject only to Permitted Security Interests. Except as
specifically provided above, all filings, deliveries of instruments and other
actions necessary or desirable in the reasonable opinion of the Agent to perfect
and preserve such security interests shall have been duly effected and the Agent
shall have received evidence thereof in form and substance reasonably
satisfactory to the Agent; and

 
(e)  
On each Vessel Exchange Date, the Agent shall have received each of the
following with respect to the relevant Acceptable Replacement Vessel:

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

 
(ii)  
the results of maritime registry searches with respect to such Acceptable
Replacement Vessel, indicating no record Security Interests other than Permitted
Security Interests;

 
 
 
 
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(iii)  
class certificates from an Approved Classification Society indicating that such
Acceptable Replacement Vessel is classed in the highest class available for
vessels of its age and type free of any conditions or recommendations other than
those approved by the Agent;

 
(iv)  
an Appraised Value from an Approved Appraiser in scope, form and substance
reasonably satisfactory to the Agent; and

 
(v)  
a report, in form and scope reasonably satisfactory to the Agent, from a firm of
independent marine insurance brokers reasonably acceptable to the Agent with
respect to the insurance maintained by the Guarantor in respect of such
Acceptable Replacement 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 Agent and/or the Lenders as mortgagee and (ii) conform
with the insurance requirements of this Agreement;

 
"Vessel Exchange Date" means a date not later than 60 days after the date of the
Total Loss of the applicable Mortgaged Vessel, upon which a Mortgaged Vessel
which has suffered a Total Loss is exchanged for an Acceptable Replacement
Vessel;
 
“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;

1.2   Construction of certain terms.  In this Agreement:
 
“approved” means, for the purposes of Clause 14, approved in writing by the
Agent;
 
“asset” includes every kind of property, asset, interest or right, including any
present, future or contingent right to any revenues or other payment;
 
“company” includes any partnership, joint venture and unincorporated
association;
 
“consent” includes an authorisation, consent, approval, resolution, licence,
exemption, filing, registration, notarisation and legalisation;
 
“contingent liability” means a liability which is not certain to arise and/or
the amount of which remains unascertained;
 
“document” includes a deed; also a letter, fax or telex;
 
“excess risks” means the proportion of claims for general average, salvage and
salvage charges not recoverable under the hull and machinery policies in respect
of a Vessel in consequence of its insured value being less than the value at
which the Vessel is assessed for the purpose of such claims;
 
“expense” means any kind of cost, charge or expense (including all legal costs,
charges and expenses) and any applicable value added or other tax;
 
“law” includes any order or decree, any form of delegated legislation, any
treaty or international convention and any regulation or resolution of the
Council of the European Union, the European Commission, the United Nations or of
its Security Council;
 
 
 
 
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“legal or administrative action” means any legal proceeding or arbitration and
any administrative or regulatory action or investigation;
 
“liability” includes every kind of debt or liability (present or future, certain
or contingent), whether incurred as principal or surety or otherwise;
 
“months” shall be construed in accordance with Clause 1.3;
 
“obligatory insurances” means all insurances effected, or which the Borrower is
obliged to effect, under Clause 14 or any other provision of this Agreement or
another Finance Document;
 
“Person” or “person” includes any individual, firm, corporation, company or
unincorporated legal entity; any state, political sub-division of a state and
local or municipal authority; and any international organisation and reference
to any person shall include its successors, permitted assignees and permitted
transferees in accordance with their respective interests;
 
“policy”, in relation to any insurance, includes a slip, cover note, certificate
of entry or other document evidencing the contract of insurance or its terms;
 
“protection and indemnity risks” means the usual risks covered by a protection
and indemnity association managed in London, including pollution risks and the
proportion (if any) of any sums payable to any other person or persons in case
of collision which are not recoverable under the hull and machinery policies by
reason of the incorporation in them of Clause 1 of the Institute Time Clauses
(Hulls)(1/10/83) or Clause 8 of the Institute Time Clauses (Hulls) (1/11/1995)
or the Institute Amended Running Down Clause (1/10/71) or any equivalent
provision;
 
“regulation” includes any regulation, rule, official directive, request or
guideline (either having the force of law or compliance with which is reasonable
in the ordinary course of business of the party concerned) of any governmental
body, agency, department or regulatory, self-regulatory or other authority or
organisation;
 
“tax” includes any present or future tax, duty, impost, levy or charge of any
kind which is imposed by any state, any political sub-division of a state or any
local or municipal authority (including any such imposed in connection with
exchange controls), and any connected penalty, interest or fine; and
 
“war risks” includes the risk of mines and all risks excluded by Clause 23 of
the Institute Time Clauses (Hulls)(1/10/83) or Clause 24 of the Institute Time
Clauses (Hulls) (1/11/1995).
 
1.3      Meaning of “month”.
 
A period of one or more “months” ends on the day in the relevant calendar month
numerically corresponding to the day of the calendar month on which the period
started (“the numerically corresponding day”), but:
 
(a)  
on the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no later
Business Day in the same calendar month, on the Business Day preceding the
numerically corresponding day; or

 
(b)  
on the last Business Day in the relevant calendar month, if the period started
on the last Business Day in a calendar month or if the last calendar month of
the period has no numerically corresponding day;

 
and “month” and “monthly” shall be construed accordingly.
 
 
 
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1.4   General Interpretation.  In this Agreement:
 
(a)  
references in Clause 1.1 to a Finance Document or any other document being in
the form of a particular schedule include references to that form with any
modifications to that form which the Agent (with the authorisation of the
Majority Lenders in the case of substantial modifications) approves or
reasonably requires;

 
(b)  
references to, or to a provision of, a Finance Document or any other document
are references to it as amended or supplemented, whether before the date of this
Agreement or otherwise;

 
(c)  
references to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this Agreement or
otherwise;

 
(d)  
words denoting the singular number shall include the plural and vice versa; and

 
(e)  
Clauses 1.1 to 1.4 apply unless the contrary intention appears.

 
1.5
Headings. In interpreting a Finance Document or any provision of a Finance
Document, all clause, sub-clause and other headings in that and any other
Finance Document shall be entirely disregarded.

 
1.6   Position of the Lenders.
 
(a)  
Interests several. The rights of the Lenders under this Agreement are several;

 
(b)  
Individual Lender’s right of action. Any legal action brought to recover any
amount which has become due and payable by the Borrower or any Guarantor under
this Agreement or any other Finance Document shall, where possible, be brought
by the Agent in the joint names of all the Lenders.  In case such action is
required, for formal reasons, to be brought by the Lenders themselves then the
Lenders shall act together, and the Agent shall co-ordinate such proceedings;

 
(c)  
Proceedings requiring Majority Lenders’ consent. No proceedings against the
Borrower or any other Obligor in connection with this Agreement or any Finance
Document or to recover sums payable hereunder or thereunder may be commenced
without the prior consent of the Majority Lenders;

 
(d)  
Agent’s Powers. Wherever possible, action and legal proceedings to be brought
under paragraphs (b) and (c) shall be brought by the Agent on behalf of all the
Lenders, where applicable under the direction of the Majority Lenders;

 
(e)  
Obligations several. The obligations of the Lenders under this Agreement are
several; and a failure of a Lender to perform its obligations under this
Agreement shall not result in:

 
(i) the obligations of any of the other Lenders being increased;
 
(ii) any Obligor or any other Lender being discharged (in whole or in part)
fromits obligations under this Agreement or any other Finance Document; or
 
(iii)  
any other Lender having any responsibility for such failure.

 
1.7  
Reimbursements.  All expenses reimbursable to a Creditor Party by the Borrower
pursuant to Clauses 20 and 21 and  or other similar provisions relating to
reimbursement of expenses contained elsewhere in the Finance Documents shall be
properly incurred and evidenced by invoices.

 
 
 
 
 
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2  
AVAILABILITY OF THE LOAN AND DRAWDOWN

 
2.1  
Facility maximum amount.  Subject to the other provisions of this Agreement, the
Lenders shall make available to the Borrower a term loan credit facility which
shall comprise a maximum aggregate amount of up to $100,000,000 (one hundred
million Dollars) (i.e. $20,000,000 (twenty million Dollars) in respect of each
Tranche), which shall be made available in (5) five tranches as follows:

 
(a)  
Tranche A, available in one Drawing, in an amount equal to the lesser of (i)
$20,000,000, (twenty million Dollars) and (ii) 76.92% of the valuation of Vessel
A to be provided pursuant to Schedule 4 Part B item 8;

 
(b)  
Tranche B, available in one Drawing, in an amount equal to the lesser of (i)
$20,000,000, (twenty million Dollars) and (ii) 76.92% of the valuation of Vessel
B to be provided pursuant to Schedule 4 Part B item 8;

 
(c)  
Tranche C, available in one Drawing, in an amount equal to the lesser of (i)
$20,000,000, (twenty million Dollars) and (ii) 76.92% of the valuation of Vessel
C to be provided pursuant to Schedule 4 Part B item 8;

 
(d)  
Tranche D, available in one Drawing, in an amount equal to the lesser of (i)
$20,000,000, (twenty million Dollars) and (ii) 76.92% of the valuation of Vessel
D to be provided pursuant to Schedule 4 Part B item 8; and

 
(e)  
Tranche E, available in one Drawing, in an amount equal to the lesser of (i)
$20,000,000, (twenty million Dollars) and (ii) 76.92% of the valuation of Vessel
E to be provided pursuant to Schedule 4 Part B item 8.

 
2.2  
Purpose: The Borrower shall apply all amounts borrowed by it under any Tranche
to fund (or refund the Borrower, subject to Clause 2.3) a portion of the
Purchase Price of the Vessel mortgaged by the relevant Guarantor on the Drawdown
Date for such Tranche.

 
2.3  
Borrowing to refund portion of Purchase Price.  If the Borrower has previously
funded the entire Purchase Price of a Vessel, it may, upon providing evidence of
payment satisfactory to the Agent, deliver a Drawdown Notice to the Agent in
accordance with Clause 3.1.

 
2.4  
No duty to verify application of funds borrowed.  No Creditor Party is bound to
monitor or verify the application of any amount borrowed pursuant to this
Agreement.

 
2.5  
Termination of Commitment. The Lenders’ Commitment in respect of a Loan will
terminate on the expiry of the Availability Period in respect of that Loan or,
if earlier, upon the relevant Vessel becoming a Total Loss.  Any part of a
Commitment undrawn at the end of the relevant Availability Period or upon the
Vessel becoming a Total Loss will be immediately cancelled.

 
2.6  
Lenders' participations in Drawings. Subject to the other provisions of this
Agreement, each Lender shall participate in each Drawing in the proportion
which, as at the relevant Drawdown Date, its Commitment in respect of the
relevant Tranche bears to the Total Commitments in respect of that Tranche as
specified in Schedule 1.

 
3  
DRAWDOWN

 
3.1  
Request for advance of Loan. Subject to the following conditions, the Borrower
may request a Drawing to be made by ensuring that the Agent receives a completed
Drawdown Notice not later than 10.00 a.m. (London time) 3 Business Days prior to
the intended Drawdown Date.

 
3.2   Availability. The conditions referred to in Clause 3.1 are that:
 
 
 
 
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(a)  
the Drawdown Date has to be a Business Day during the Availability Period
applicable to that Tranche;

 
(b)  
the Tranche to be utilised must be identified;

 
(c)  
there shall be no more than five (5) Drawings;

 
(d)  
the proposed currency and amount of the Drawing must comply with Clause 2.1;

 
(e)  
subject to Clause 2.3, a Drawing shall be made upon or following the acquisition
of a Vessel by a Guarantor and only one Drawing shall be made in respect of each
Vessel; and

 
(f)  
the aggregate amount of a Drawing in respect any Tranche shall not exceed the
Total Commitments for such Tranche.

 
3.3  
Notification to Lenders of receipt of a Drawdown Notice. The Agent shall
immediately notify the Lenders that it has received a Drawdown Notice from the
Borrower in respect of its intention to make a Drawing and shall inform each
Lender of:

 
(a)  
the amount of the Drawing and the Drawdown Date;

 
(b)  
the amount of that Lender's participation in the Drawing; and

 
(c)  
the duration of the first Interest Period.

 
3.4  
Drawdown Notice irrevocable. A Drawdown Notice must be signed by a duly
authorised person on behalf of the Borrower; and once served, a Drawdown Notice
cannot be revoked without the prior consent of the Agent, acting on the
authority of the Majority Lenders.

 
3.5  
Lenders to make available Contributions. Subject to the provisions of this
Agreement, each Lender shall, on and with value on the Drawdown Date, make
available to the Agent for the account of the Borrower the amount due from that
Lender under Clause 2.6.

 
3.6  
Disbursement of Loan. Subject to the provisions of this Agreement, the Agent
shall on the Drawdown Date pay to the Borrower the amounts which the Agent
receives from the Lenders under Clause 3.5; and that payment to the Borrower
shall be made:

 
(a)  
to the account which the Borrower specifies in the Drawdown Notice; and

 
(b)  
in the like funds as the Agent received the payments from the Lenders.

 
3.7  
Disbursement of Loan to Borrower. The payment by the Agent under Clause 3.6 to
the Borrower shall constitute the making of the Loan and the Borrower shall at
that time become indebted, as principal and direct obligor, to each Lender in an
amount equal to that Lender's Contribution.

 
4  
CONDITIONS PRECEDENT TO DRAWING

 
4.1  
Documents, fees and no default. Each Lender's obligation to contribute to the
Loan is subject to the following conditions precedent:

 
(a)  
that, on or before the service of the first Drawdown Notice, the Agent receives
the documents described in Part A of Schedule 4 in form and substance
satisfactory to the Agent;

 
(b)  
that, on the Drawdown Date in relation to each Tranche but prior to the advance
of any Loan, the Agent receives the documents described in Part B of Schedule 4
in form and substance satisfactory to it;

 
 
 
 
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(c)  
that, on or before the service of the first Drawdown Notice, the Agent receives
the arrangement fee referred to in Clause 20.1(a), all accrued commitment fee
payable pursuant to Clause 20.1(b) and has received payment of the expenses
referred to in Clause 20.2;

 
(d)  
that both at the date of each Drawdown Notice and at each Drawdown Date:

 
(i)  
no Event of Default or Potential Event of Default has occurred and is continuing
or would result from the borrowing of the Loan;

 
(ii)  
the representations and warranties in Clause 11 and those of the Borrower or any
Obligor which are set out in the other Finance Documents would be true and not
misleading if repeated on each of those dates with reference to the
circumstances then existing; and

 
(iii)  
none of the circumstances contemplated by Clause 7.3 has occurred and is
continuing;

 
(e)  
since the date of this Agreement and through the Drawdown Date, no change shall
have occurred in applicable law, or in applicable regulations thereunder or in
interpretations thereof by any court or regulatory authority which, in the
opinion of the Lenders, would make it illegal for any Lender to fund the
Contribution to be made by it on such Drawdown date or to otherwise perform its
obligations in accordance with the terms of Clause 3 hereof on the Drawdown
Date;

 
(f)  
on the Drawdown Date, no statute, rule or regulation (including, without
limitation, any statute, rule or regulation relating to taxation) of any
governmental body shall be pending or shall have come into effect which is
likely to have a material and adverse effect on the transactions contemplated by
this Agreement and the other Finance Documents;

 
(g)  
all representations and warranties of the Obligors herein shall be true, and
correct on and as of the Drawdown Date with the same effect as though such
representations and warranties had been made on and as of such date; and on the
Drawdown Date the Agent shall receive a certificate from each of the Obligors
satisfactory in form and substance to the Lenders, the statements in which shall
be true and correct, as to compliance with the conditions contained in Schedule
4; and

 
(h)  
on the Drawdown Date, all corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement and the other
Finance Documents shall be satisfactory in form and substance to the Lenders,
and the Lenders shall have received all information and copies of all documents
which the Lenders may reasonably have requested in connection herewith and
therewith, such documents where appropriate to be certified by proper corporate
officials or governmental authorities.

 
5  
REPAYMENT AND PREPAYMENT

 
5.1  
Timing and amount of repayment instalments. The Borrower shall repay each Loan
to the Lenders in consecutive quarterly instalments on the last day of each
calendar quarter commencing on the last day of the calendar quarter in which the
Drawdown occurs with respect to such Loan (each such quarterly payment date, a
“Repayment Date”).

 
5.2  
Amortization schedule. On each Drawdown Date, the Agent shall prepare an
amortization schedule for the Loan advanced on that Drawdown Date, such
amortization schedule to be calculated on the basis of a thirteen (13) year
linear amortization of such Loan, calculated from such Drawdown Date; provided
that the amount to be repaid on the First Repayment Date for each Loan shall be
reduced on a pro rata basis for the number of days from (and including) the
first day of the calendar quarter in which the Drawdown Date for that Loan
occurs to (but excluding) such Drawdown Date. Each amortization schedule
prepared by the Agent in accordance with this Clause 5.2 shall be conclusive and
binding, absent manifest

 
 
 
 
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error, and shall be attached by the Agent to this Agreement as
Schedule 5.  Attached hereto is an indicative Schedule 5, which shall be
replaced with respect to each Loan on each Drawdown Date with a definitive
schedule as described above.
 
5.3  
Final Maturity Date. On the Final Maturity Date, the Borrower shall pay in full
the outstanding balance of the Loans and shall additionally pay to the Agent for
the account of the Creditor Parties all other sums then accrued or owing under
any Finance Document.

 
5.4  
Voluntary Prepayment. Subject to the conditions set forth in Clause 5.5, the
Borrower may prepay the whole or any part of a Loan.

 
5.5   Conditions for voluntary prepayment.  The conditions referred to in Clause
5.4 are that:
 
(a)  
a partial prepayment shall be a minimum amount of $1,000,000 or an integral
multiple of $1,000,000;

 
(b)  
the Agent has received from the Borrower at least 5 Business Days' prior written
notice specifying the amount to be prepaid and the date on which the prepayment
is to be made; and

 
(c)  
the Borrower has provided evidence satisfactory to the Agent that any consent
required by the Borrower or any Obligor in connection with the prepayment has
been obtained and remains in force, and that any regulation relevant to this
Agreement which affects the Borrower or any Obligor has been complied with.

 
5.6  
Effect of notice of prepayment. A prepayment notice may not be withdrawn or
amended without the consent of the Agent, given with the authorisation of the
Majority Lenders, and the amount specified in the prepayment notice shall become
due and payable by the Borrower on the date for prepayment specified in the
prepayment notice.

 
5.7  
Notification of notice of prepayment. The Agent shall notify the Lenders
promptly upon receiving a prepayment notice, and shall provide any Lender which
so requests with a copy of any document delivered by the Borrower under Clause
5.5 (c).

 
5.8  
Mandatory prepayment. Subject to Clause 5.12, the Borrower shall be obliged to
prepay the whole of any Loan:

 
(a)  
in the case of a sale of the related Vessel by the relevant Guarantor, on or
before the date on which the sale is completed;

 
(b)  
in the case of a Total Loss of the related Vessel, on the earlier of the date
falling 120 days after the Total Loss Date and the date of receipt by the
Security Trustee of the proceeds of insurance relating to such Total Loss; and

 
(c)  
if without prior approval of the Agent (on instructions of the Majority
Lenders), there is a Change of Control without the Agent’s consent in which case
each of the Loans shall be prepaid within five (5) Business Days of such Change
of Control.

 
5.9  
Amounts payable on prepayment. A prepayment shall be made together with accrued
interest (and any other amount payable under Clause 20 or otherwise) in respect
of the amount prepaid and, if the prepayment is not made on the last day of an
Interest Period together with any sums payable under Clauses 21.3 and 21.4 but
without premium or penalty.

 
5.10  
Application of partial prepayment. Each partial prepayment shall be applied
against the repayment instalments specified in Clause 5.1 in inverse order of
maturity. Upon any partial prepayment of a Loan, the Agent shall prepare a
replacement Schedule 5 for that Loan, which replacement schedule shall be
conclusive and binding, absent manifest error.  In the case of a partial
prepayment under Clause 5.4, such prepayment shall be applied to the Loan

 
 
 
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designated by the Borrower in its notice of prepayment, or, if no such Loan is
designated by the Borrower, shall be applied on a pro rata basis against all
Loans, based on the outstanding principal balance of each Loan immediately prior
to such prepayment.
 
5.11  No reborrowing. No amount repaid or prepaid may be reborrowed.
 
5.12  
Exchange of Mortgaged Vessel following a Total Loss. In the event of Total Loss
of a Mortgaged Vessel, the Borrower and each of the Guarantors shall act in
accordance with Clause 5.8 or, with the prior written consent of all of the
Lenders (which the Lenders may grant or withhold in their sole discretion) and
so long as (i) no Potential Event of Default or Event of Default has occurred
and is continuing (or would arise after giving effect thereto), and (ii) all
representations and warranties made by the Obligors pursuant to Clause 11 of
this Agreement are true and correct both before and after the Vessel Exchange
Date, the relevant Guarantor may elect to exchange such Mortgaged Vessel for an
Acceptable Replacement Vessel pursuant to a Vessel Exchange; provided further
that the Borrower shall have delivered to the Agent an officer’s certificate,
certified by the senior financial officer of the Borrower, demonstrating pro
forma compliance (giving effect to such Vessel Exchange and, in the case of
calculations involving the valuation of Mortgaged Vessels, the valuations used
shall be the valuations most recently delivered to or obtained by the Agent
pursuant to Clause 16.8 (or, in the case of the Acceptable Replacement Vessel,
pursuant to the definition of Vessel Exchange) or, at the Borrower’s option, a
new valuation complying with the provisions of Clause 16.3) with each of the
covenants set forth in Clauses 12.2(d)-(f), inclusive, for the most recently
ended Test Period (or at the time of such sale or exchange, as applicable) and
projected compliance with such covenants for the one year period following such
Vessel Exchange, in each case setting forth the calculations required to make
such determination in reasonable detail.

 
5.13  
Dissolution of Guarantor following Vessel Exchange. Following a Vessel Exchange
permitted by this Agreement, the Guarantor which owned the Vessel that is the
subject of such Vessel Exchange may dissolve (if such Guarantor is not the owner
of the Acceptable Replacement Vessel exchanged for such Vessel), provided, that
(x) such Guarantor shall have transferred its Operating Account to the Guarantor
which owns the Acceptable Replacement Vessel, (y) all of the proceeds of such
dissolution shall be paid only to the Borrower and (z) no Event of Default is
continuing unremedied at the time of such dissolution.

 
5.14  
Escrow: Any insurance proceeds received in respect of the Total Loss of a
Mortgaged Vessel which is being exchanged pursuant to a Vessel Exchange shall be
held in escrow by the Agent for a period of 90 days following the Vessel
Exchange Date.

 
6  
INTEREST

 
6.1  
Payment of Interest.

 
(a)  
General. The Borrower shall pay accrued interest on each Loan free of any
deductions or withholdings, at the rate and at the times determined under this
Clause 6.1;

 
(b)  
Commencement of Interest Periods. the first Interest Period for each Loan shall
commence on the Drawdown Date for each Loan and each subsequent Interest Period
shall commence on the expiry of the preceding Interest Period;

 
(c)  
Rate of interest.  interest on each Loan will be payable at a rate per annum
which is equal to the aggregate of (i) LIBOR for the relevant Interest Period;
(ii) the Margin and (iii) the Mandatory Cost (if any);

 
(d)  
Computation of interest. interest will be computed in accordance with Clause
17.2.

 
 
 
 
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(e)  
Payment dates for interest. interest due under this Clause 6.1 shall be paid on
the last day of each relevant Interest Period; and

 
(f)  
Interest Periods. for the calculation of interest, the Borrower shall select
interest periods (each an “Interest Period”) in respect of each Loan as follows:

 
(i)  
each Interest Period shall be of either one (1), three (3) or six (6) months
duration, as selected by the Borrower and notified to the Agent not less than
three (3) Business Days before the first day of the Interest Period or any other
period mutually agreed by the Borrower and the Agent, or if the Borrower fails
to so notify the Agent, of three (3) months duration;

 
(ii)  
the first Interest Period for each Loan will start on its Drawdown Date; and

 
(iii)  
prior to each Repayment Date, in determining the interest rate for a Loan, the
Agent may shorten an Interest Period for any Loan to ensure that the applicable
Interest Period for such Loan ends on a Repayment Date (in the case of the First
Interest Period for a Loan) or the Final Maturity Date (in the case of the last
Interest Period for each Loan);

 
in each case, the applicable rate, the amount payable, the Interest Periods and
the due date for payment shall be notified by the Agent to the Borrower by
letter or facsimile.
 
7  
CHANGES TO CALCULATION OF INTEREST

 
7.1  
Obligation of Reference Banks to quote. A Reference Bank which is a Lender shall
use all reasonable efforts to supply the quotation required of it for the
purposes of fixing a rate of interest under this Agreement.

 
7.2  
Absence of quotations by Reference Banks. If any Reference Bank fails to supply
a quotation, the Agent shall determine the relevant LIBOR on the basis of the
quotations supplied by the remaining Reference Banks; but if (2) or more of the
Reference Banks fail to provide a quotation, the relevant rate of interest shall
be set in accordance with the following provisions of this Clause 7.

 
7.3   Market disruption. The following provisions of this Clause 7 apply if:
 
(a)  
The Screen Rate is not available and none or only one of the Reference Banks
provide quotations to the Agent in order to fix LIBOR before 1.00 p.m. (London
time) on the Quotation Date for an Interest Period;

 
(b)  
at least 1 Business Day before the start of an Interest Period, Lenders having
Contributions together amounting to more than 50 per cent. of the Loan (or, if
the Loan has not been made, Commitments amounting to more than 50 per cent. of
the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not
accurately reflect the cost to those Lenders of funding their respective
Contributions (or any part of them) during the Interest Period in the London
Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for
the Interest Period; or

 
(c)  
at least 1 Business Day before the start of an Interest Period, the Agent is
notified by a Lender (the “Affected Lender”) that for any reason it is unable to
obtain Dollars in the London Interbank Market in order to fund its Contribution
(or any part of it) during the Interest Period.

 
7.4  
Notification of market disruption. The Agent shall promptly notify the Borrower
and each of the Lenders stating the circumstances falling within Clause 7.3
which have caused its notice to be given.

 
 
 
 
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7.5  
Suspension of drawdown. If the Agent's notice under Clause 7.4 is served before
the Loan is made:

 
(a)  
in a case falling within Clauses 7.3(a) or (b), the Lenders' obligations to make
the Loan; and

 
(b)  
in a case falling within Clause 7.3(c), the Affected Lender's obligation to
participate in the Loan;

 
shall be suspended while the circumstances referred to in the Agent's notice
continue.

7.6  
Negotiation of alternative rate of interest. If the Agent’s notice under Clause
7.4 is served after the Loan is made, the Borrower, the Agent, the Lenders or
(as the case may be) the Affected Lender shall use reasonable endeavours to
agree, within the 30 days after the date on which the Agent serves its notice
under Clause 7.4 (the “Negotiation Period”), an alternative interest rate or (as
the case may be) an alternative basis for the Lenders or (as the case may be)
the Affected Lender to fund or continue to fund their or its Contribution during
the Interest Period concerned.

 
7.7  
Application of agreed alternative rate of interest. Any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period shall
take effect in accordance with the terms agreed.

 
7.8  
Alternative rate of interest in absence of agreement. If an alternative interest
rate or alternative basis is not agreed within the Negotiation Period, and the
relevant  circumstances are continuing at the end of the Negotiation Period,
then the Agent shall, with the agreement of each Lender or (as the case may be)
the Affected Lender, set an interest period and interest rate representing the
cost of funding of the Lenders or (as the case may be) the Affected Lender in
Dollars or in any available currency of their or its Contribution plus the
Margin; and the procedure provided for by this Clause 7.8 shall be repeated if
the relevant circumstances are continuing at the end of the interest period so
set by the Agent.

 
7.9  
Notice of prepayment. If the Borrower does not agree with an interest rate set
by the Agent under Clause 7.8, the Borrower may give the Agent not less than 15
Business Days' notice of its intention to prepay the Loan or, as the case may
be, the Affected Lender's Contribution at the end of the interest period set by
the Agent.

 
7.10  
Prepayment; termination of Commitments. A notice under Clause 7.9 shall be
irrevocable; the Agent shall promptly notify the Lenders or (as the case may
require) the Affected Lender of the Borrower's notice of intended prepayment
and:

 
(a)  
on the date on which the Agent serves that notice, the Total Commitments or (as
the case may require) the Commitment of the Affected Lender shall be cancelled;
and

 
(b)  
on the last Business Day of the interest period set by the Agent, the Borrower
shall prepay (without premium or penalty) the Loans or, as the case may be, the
Affected Lender's Contribution, together with accrued interest thereon at the
applicable rate plus the Margin.

 
7.11  
Application of prepayment. The provisions of Clause 5.10 shall apply in relation
to the prepayment.

 
8  
DEFAULT INTEREST

 
8.1  
Payment of default interest on overdue amounts. The Borrower shall pay interest
in accordance with the following provisions of this Clause 8 on any amount
payable by the Borrower under any Finance Document which the Agent, the Security
Trustee or the other designated payee does not receive on or before the relevant
date, that is:

 
 
 
 
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(a)  
the date on which the Finance Documents provide that such amount is due for
payment;

 
(b)  
if a Finance Document provides that such amount is payable on demand, the date
on which the demand is served; or

 
(c)  
if such amount has become immediately due and payable under Clause 19.6
(Acceleration of Loan), the date on which it became immediately due and payable.

 
8.2  
Default rate of interest. Interest shall accrue on an overdue amount from (and
including) the relevant date until the date of actual payment (as well after as
before judgment) at the rate per annum determined by the Agent to be two (2) per
cent. above:

 
(a)  
in the case of an overdue amount of principal, the higher of the rates set out
in Clauses 8.3(a) and (b); or

 
(b)  
in the case of any other overdue amount, the rate set out at Clause 8.3(b).

 
8.3   Calculation of default rate of interest. The rates referred to in Clause
8.2 are:
 
(a)  
the rate applicable to the overdue principal amount immediately prior to the
relevant date (but only for any unexpired part of any then current Interest
Period); and

 
(b)  
the Margin plus, in respect of successive periods of any duration (including at
call) up to 3 months which the Agent may select from time to time:

 
(i)  
LIBOR; or

 
(ii)  
if the Agent (after consultation with the Reference Banks) determines that
Dollar deposits for any such period are not being made available to any
Reference Bank by leading banks in the London Interbank Market in the ordinary
course of business, a rate from time to time determined by the Agent by
reference to the cost of funds to the Reference Banks from such other sources as
the Agent (after consultation with the Reference Banks) may from time to time
determine.

 
8.4  
Notification of interest periods and default rates. The Agent shall promptly
notify the Lenders and the Borrower of each interest rate determined by the
Agent under Clause 8.3 and of each period selected by the Agent for the purposes
of paragraph (b) of that Clause; but this shall not be taken to imply that the
Borrower is liable to pay such interest only with effect from the date of the
Agent's notification.

 
8.5  
Payment of accrued default interest. Subject to the other provisions of this
Agreement, any interest due under this Clause shall be paid on the last day of
the period by reference to which it was determined; and the payment shall be
made to the Agent for the account of the Creditor Party to which the overdue
amount is due.

 
8.6  
Compounding of default interest. Any such interest which is not paid at the end
of the period by reference to which it was determined shall thereupon be
compounded.

 
9  
GUARANTEE AND INDEMNITY

 
9.1  
Guarantee and indemnity. Each Guarantor irrevocably and unconditionally jointly
and severally:

 
(a)  
guarantees to each Creditor Party punctual payment and performance by the
Borrower of all the Borrower's obligations under this Agreement and each of the
other Finance Documents;

 
 
 
 
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(b)  
undertakes with each Creditor Party that whenever the Borrower does not pay any
amount when due under or in connection with this Agreement or any of the other
Finance Document, that Guarantor shall immediately on demand pay that amount as
if it was the principal obligor; and

 
(c)  
agrees with each Creditor Party that if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal, it will, as an independent and
primary obligation, indemnify that Creditor Party immediately on demand against
any cost, loss or liability it incurs as a result of the Borrower not paying any
amount which would, but for such unenforceability, invalidity or illegality,
have been payable by it under any Finance Document on the date when it would
have been due. The amount payable by a Guarantor under this indemnity will not
exceed the amount it would have had to pay under this Clause 9 if the amount
claimed had been recoverable on the basis of a guarantee.

 
9.2  
Continuing Guarantee. This guarantee is a continuing guarantee and will extend
to the ultimate balance of sums payable by any Obligor under the Finance
Documents, regardless of any intermediate payment or discharge in whole or in
part.

 
9.3  
Reinstatement. If any discharge, release or arrangement (whether in respect of
the obligations of any Obligor or any security for those obligations or
otherwise) is made by a Creditor Party in whole or in part on the basis of any
payment, security or other disposition which is avoided or must be restored in
insolvency, liquidation, administration or otherwise, without limitation, then
the liability of each Guarantor under this Clause 9 will continue or be
reinstated as if the discharge, release  or arrangement had not occurred.

 
9.4  
Waiver of defences. The obligations of each Guarantor under this Clause 9 will
not be affected by an act, omission, matter or thing which, but for this Clause,
would reduce, release or prejudice any of its obligations under this Clause 9
(without limitation and whether or not known to it or any Creditor Party)
including:

 
(a)  
any time, waiver or consent granted to, or composition with, any Obligor or
other person;

 
(b)  
the release of any other Obligor or any other person under the terms of any
composition or arrangement with any creditor of any member of the Group;

 
(c)  
the taking, variation, compromise, exchange, renewal or release of, or refusal
or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor or other person or any non-presentation or non-observance
of any formality or other requirement in respect of any instrument or any
failure to realise the full value of any security;

 
(d)  
any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any other
person;

 
(e)  
any amendment, novation, supplement, extension, restatement (however fundamental
and whether or not more onerous) or replacement of any Finance Document or any
other document or security including without limitation any change in the
purpose of, any extension of or any increase in any facility or the addition of
any new facility under any Finance Document or other document or security;

 
(f)  
any unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document or any other document or security; or

 
(g)  
any insolvency or similar proceedings.

 
 
 
 
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9.5  
Immediate Recourse. Each Guarantor waives any right it may have of first
requiring any Creditor Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from any person
before claiming from that Guarantor under this Clause 9.  This waiver applies
irrespective of any law or any provision of a Finance Document to the contrary.

 
9.6  
Appropriations. Until all amounts which may be or become payable by the Obligors
under or in connection with the Finance Documents have been irrevocably paid in
full, each Creditor Party (or any trustee or agent on its behalf) may:

 
(a)  
refrain from applying or enforcing any other moneys, security or rights held or
received by that Creditor Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and order
as it sees fit (whether against those amounts or otherwise) and no Guarantor
shall be entitled to the benefit of the same; and

 
(b)  
hold in an interest-bearing suspense account any moneys received from any
Guarantor or on account of any Guarantor's liability under this Clause 9.

 
9.7  
Deferrals of Guarantor's rights. Until all amounts which may be or become
payable by the Obligors under or in connection with the Finance Documents have
been irrevocably paid in full and unless the Agent otherwise directs, no
Guarantor will exercise any rights which it may have by reason of performance by
it of its obligations under the Finance Documents or by reason of any amount
being payable, or liability arising, under this Clause 9:

 
(a)  
to be indemnified by an Obligor;

 
(b)  
to claim any contribution from any other guarantor (including any other
Guarantor) of any Obligor's obligations under the Finance Documents;

 
(c)  
to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Creditor Parties under the Finance Documents or
of any other guarantee or security taken pursuant to, or in connection with, the
Finance Documents by any Creditor Party;

 
(d)  
to bring legal or other proceedings for an order requiring any Obligor to make
any payment, or perform any obligation, in respect of which any Guarantor has
given a guarantee, undertaking or indemnity under this Clause 9;

 
(e)  
to exercise any right of set-off against any Obligor; and/or

 
(f)  
to claim or prove as a creditor of any Obligor in competition with any Creditor
Party.

 
If a Guarantor receives any benefit, payment or distribution in relation to such
rights it shall hold that benefit, payment or distribution to the extent
necessary to enable all amounts which may be or become payable to the Creditor
Parties by the Obligors under or in connection with the Finance Documents to be
repaid in full on trust for the Creditor Parties and shall promptly pay or
transfer the same to the Agent or as the Agent may direct.
 
9.8  
Release of Guarantors' right of contribution. If any Guarantor (a "Retiring
Guarantor") ceases to be a Guarantor in accordance with the terms of the
Creditor Documents for the purpose of any sale or other disposal of that
Retiring Guarantor then on the date such Retiring Guarantor ceases to be a
Guarantor:

 
(a)  
that Retiring Guarantor is released by each other Guarantor from any liability
(whether past, present or future and whether actual or contingent) to make a
contribution to any other Guarantor arising by reason of the performance by any
other Guarantor of its obligations under the Finance Documents; and

 
 
 
 
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(b)  
each other Guarantor waives any rights it may have by reason of the performance
of its obligations under the Finance Documents to take the benefit (in whole or
in part and whether by way of subrogation or otherwise) of any rights of the
Creditor Parties under any Finance Document or of any other security taken
pursuant to, or in connection with, any Finance Document where such rights or
security are granted by or in relation to the assets of the Retiring Guarantor.

 
9.9  
Additional security. This guarantee is in addition to and is not in any way
prejudiced by any other guarantee or security now or subsequently held by any
Creditor Party.

 
10  
OPERATING ACCOUNTS

 
10.1  Account Bank. The Operating Accounts referred to in this Clause 10 are
opened by the Guarantors with the Agent.
 
10.2  Operating Accounts.
 
(a)  
Each Guarantor shall maintain the following accounts in respect of each Vessel
at the relevant branch of the Agent, denominated in Dollars, which shall
together be the "Operating Accounts":

 
(i)  
Operating Account in the name of Genco Bay Operating Account with Number
00 250 713 960;

 
(ii)  
Operating Account in the name of Genco Ocean Operating Account with Number
00 250 714 057;

 
(iii)  
Operating Account in the name of Genco Avra Operating Account with Number
00 250 714 154;

 
(iv)  
Operating Account in the name of Genco Mare Operating Account with Number
00 250 714 251;

 
(v)  
Operating Account in the name of Genco Spirit Operating Account with Number
00 250 714 348; and

 
(vi)  
joint Operating Account in the name of all of the Guarantors, titled “5 Handys
Master Account,” with Number 00250763721 (the "Master Account");

 
(b)  
each Operating Account shall be a separate account at the Agent;

 
(c)  
each Guarantor shall ensure at all times that the aggregate balance of all of
the Operating Accounts is not less than the product of $750,000 and the number
of Mortgaged Vessels (the "Minimum Balance"). The Minimum Balance shall be
maintained by the Guarantors and constituted by the Guarantors on or before the
date of a Drawing in relation to a Loan;

 
(d)  
neither the existence of an Operating Account, nor the insufficiency of funds in
any of them, nor any inability to apply any funds in any of them towards the
relevant payment, shall affect the obligation of the Borrower and Guarantors to
make all payments required to be made to the Creditor Parties or any of them on
the due date for payment in accordance with the Finance Documents; and

 
(e)  
no sum may be credited to or withdrawn from any Operating Account except as
expressly permitted by this Agreement.

 
10.3   Account mandates.
 
 
 
 
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(a)  
The Agent shall, save as otherwise provided herein, maintain each Operating
Account in accordance with any mandate agreed with the Guarantors (from time to
time); and

 
(b)  
if there is any conflict between the Finance Documents and either any mandate
agreed by the Agent or the Agent’s normal practices, the provisions of the
Finance Documents shall prevail but only to the extent that the Agent would not
be in a breach of law as a result.

 
10.4  
Operation of Operating Accounts. The Borrower shall procure and each Guarantor
shall ensure during the Security Period, the payment into each Guarantor's
Operating Account of:

 
(a)  
all Earnings with respect to the Vessel owned by such Guarantor; and

 
(b)  
any other amounts received by such Guarantor for any reason whatsoever.

 
10.5  Receipts into Operating Accounts.
 
(a)  
Subject to Clause 17.6, the Agent shall not be obliged to make available to the
Guarantors any sum which it is expecting to receive for the account of the
Guarantors until it has received it; and

 
(b)  
the Guarantors shall promptly convert, or instruct the Agent to convert, into
Dollars at a reasonable market rate any funds received by them in a currency
other than Dollars for crediting to the relevant Operating Account on the day of
conversion into Dollars.

 
10.6  
Withdrawals from Operating Accounts. All requests for withdrawals from an
Operating Account shall be made in accordance with the relevant Guarantor’s
mandate with the Agent.

 
10.7  No withdrawals in certain circumstances. Notwithstanding anything else in
this Clause 10, no withdrawal shall be made by any Guarantor from any Operating
Account:
 
(i)  
following the occurrence and during the continuation of any Potential Event of
Default or any Event of Default or if the proposed withdrawal would cause a
Potential Event of Default or Event of Default;

 
(ii)  
if, prior to the date of the relevant proposed withdrawal, the Agent (either
generally, or with reference to the specific withdrawal or Operating Account)
notifies the applicable Guarantor that the withdrawal is not or would not be
permitted under this Agreement and such notice shall specify (for the benefit of
such Guarantor) the provision of this Agreement which prohibits such withdrawal;
or

 
(iii)  
to the extent that the aggregate balance standing to the credit of all of the
Operating Accounts is less than the Minimum Balance or would be reduced to below
the Minimum Balance as a result of such withdrawal.

 
10.8  
Interest.

 
(a)  
The Operating Accounts shall earn interest at such rate(s) as may be agreed from
time to time by the Guarantors and the Agent. Such interest shall be credited to
the relevant Operating Account; and

 
(b)  
any reference in this Agreement to the balance standing to the credit of the
Operating Account includes any interest so credited to it after taking account
of any Tax attributable to the interest to the extent considered appropriate by
the Agent.

 
 
 
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11  
REPRESENTATIONS AND WARRANTIES

 
11.1  
General representations. Each Obligor jointly and severally represents and
warrants to each Creditor Party that:

 
(a)  
Status: it is duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has power to carry on its business
as it is now being conducted and to own its property and other assets and has
duly qualified to do business in all jurisdictions where such qualification is
necessary to carry on its present business and operations and to own its
properties and perform its obligations under the Financing Documents to which it
is a party;

 
(b)  
Corporate power: it has the power to:

 
(i)  
execute and deliver the Transaction Documents to which it is a party;

 
(ii)  
comply with the provisions of and perform each of its obligations under the
Transaction Documents to which it is a party; and

 
(iii)  
in the case of the Borrower to borrow under this Agreement and to make all
payments contemplated by, and to comply with the Transaction Documents;

 
and all necessary corporate and other actions have been taken by it (to the
extent it is a party) to authorise its entry into, performance and delivery of
the transactions contemplated by those Transaction Documents;
 
(c)  
Consents in force: all the authorisations referred to in Clause 11.1(b) remain
in force and nothing has occurred which makes any of them liable to revocation;

 
(d)  
No conflicts:  the execution and performance by it of the Transaction Documents
to which it is a party and in the case of the Borrower the borrowing of the full
amount of each Loan does not contravene any law, regulation, judicial or
administrative decree or conflict with its constitutional documents or any
contractual or other obligation or restriction which is binding on it or any of
its assets;

 
(e)  
Legal validity:  the Transaction Documents to which it is a party are or will
when executed and, where appropriate, registered, constitute its legal, valid
and binding obligations, enforceable in accordance with their terms, subject to
bankruptcy, insolvency and other similar laws affecting creditor’s rights
generally and to general principles of equity;

 
(f)  
No governmental approvals or consents:  there are no governmental approvals or
consents which are necessary for the execution and performance by an Obligor of
this Agreement or any of the other Transaction Documents to which it is a party
or for this Agreement or any of the other Transaction Documents to which it is a
party to be enforceable against any Obligor, other than those which have already
been obtained;

 
(g)  
No third party Security Interests:  without limiting the generality of Clause
11.1 (e), at the time of execution and delivery of each Transaction Document to
which that Obligor is a party:

 
(i)  
such Obligor will have the right to create all the Security Interests which that
Transaction Document purports to create;

 
(ii)  
no third party will have any Security Interests (except for Permitted Security
Interests or, with respect to a Vessel, Security Interests permitted under the
Mortgage covering such Vessel) or any other interest, right or claim over, in or
in relation to any asset to which such Security Interest, by its terms relates;
and

 
 
 
 
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(iii)  
the Security Interests in each Vessel granted, or to be granted, to the Security
Trustee pursuant to the General Assignment Deed and the Mortgage in the property
purported to be covered thereby, (i) constitute or will constitute upon the
acquisition of such Vessel by a Guarantor (A) with respect to the General
Assignment Deed, a valid and perfected first priority security interest under
the UCC or other applicable law and (B) with respect to the Mortgage, a first
preferred ship mortgage on the Vessel, (ii) will be entitled to all of the
rights, benefits and priorities provided by the UCC or other applicable law, as
applicable and (iii) will be superior and prior to the rights of all third
persons or entities (other than those whose claims are mandatorily preferred by
law and those that constitute Permitted Security Interests), now existing or
hereafter arising whether by way of any lien or otherwise to the extent provided
by the UCC or other applicable law.  All filings have been accomplished, or will
be accomplished upon the mortgaging of each Vessel, with respect to the
Mortgages in each jurisdiction necessary or advisable to establish and perfect
the Security Trustee’s rights in and to the collateral covered thereby, and any
giving of notice or any other action to such end required or permitted by law
has been given or taken.  All related filing or recording fees have been paid;

 
(h)  
No proceedings:  there are no proceedings before any arbitration tribunal,
court, government agency or administrative body pending or threatened against
any Obligor, which, to the best of the Borrower's knowledge, is likely to be
adversely determined, and would (if adversely determined) be likely to have a
Material Adverse Effect;

 
(i)  
No default: no Obligor is in default under any Transaction Document to which it
is a party or any other material agreement or obligation to which it is a party
or by which it is bound;

 
(j)  
No Event of Default: no Potential Event of Default or Event of Default has
occurred and is continuing; and

 
(k)  
No notarisations, filings, etc. required: other than in respect of the Mortgages
to be registered at the relevant ship registry there are at the date of the
execution of this Agreement no notarisations, filings, recordings, registrations
or enrolments in any court, public office of any jurisdiction applicable to an
Obligor which are necessary in order to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or the other
Transaction Documents to which it is a party and any such notarisations,
filings, recordings, registrations or enrolments as may be necessary as at each
Drawdown Date to ensure the legality, validity, enforceability or admissibility
in evidence of this Agreement and the Mortgage covering the Vessel being
mortgaged by a Guarantor on such Drawdown Date shall have been obtained.

 
11.2  
Borrower representations. The Borrower represents and warrants to each Creditor
Party (for itself and on behalf of the Guarantors) that:

 
(a)  
No withholding taxes: all payments which an Obligor is liable to make under the
Finance Documents may be made without deduction or withholding for an account of
any tax payable under any law of any Pertinent Jurisdiction;

 
(b)  
Information: all relevant information which has been produced in writing by or
on behalf of the Obligors to any Creditor Party in connection with any Finance
Document satisfied the requirements of such Finance Document; all audited and
unaudited accounts which have been so provided satisfy the requirements of
Clause 12.1(a) 

 
 
 
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and 12.1(c), there has been no material adverse change in the financial position
or state of affairs of the Borrower from that disclosed in the latest of those
accounts or financial statements;
 
(c)  
Taxes paid: each Obligor has paid or has provided adequate reserves (in
accordance with GAAP) for the payment of, all material taxes applicable to, or
imposed on or in relation to such Obligor, its business or the Vessel owned by
it and has filed or caused to be filed all material tax returns, reports, forms
or similar documents which are required to be filed by it;

 
(d)  
No litigation: no legal or administrative action involving an Obligor (including
action relating to any alleged or actual breach of the ISM Code) has been
commenced or taken or, to the Borrower’s knowledge, is likely to be commenced or
taken which, in either case, would be likely to have a Material Adverse Effect;

 
(e)  
Title to Vessels: on each Drawdown Date, each Guarantor which mortgages a Vessel
on or before such Drawdown Date will have good and marketable title to that
Vessel free and clear of all Security Interests other than Permitted Security
Interests;

 
(f)  
Adequacy of disclosure: the representations and warranties made by each Obligor
in connection with any of the transactions contemplated hereby and any other
document furnished by any Obligor to any Creditor Party, or in connection with
the transactions contemplated hereby are true and correct as of the date
hereof.  There is no fact which the Borrower has not disclosed to the Agent, in
relation to the Obligors, in writing which may have a Material Adverse Effect;

 
(g)  
MOAs binding and enforceable: each of the MOAs constitutes valid, binding and
enforceable obligations of the Seller party thereto and the Borrower
respectively in accordance with its terms;

 
(h)  
MOA’s true and complete: the copy of each MOA delivered to the Agent before the
date of this Agreement is a true and complete copy;

 
(i)  
No MOA amendments or waivers: no material amendments or additions to any MOA
have been agreed nor has the Borrower or Seller waived any of their respective
rights under any MOAs;

 
(j)  
No rebates, etc.: there is no agreement or understanding to allow or pay any
rebate, premium, commission, discount or other benefit or payment (howsoever
described) to an Obligor, the Seller or a third party in connection with the
purchase by the relevant Obligor of each Vessel, other than as disclosed to the
Lenders in writing on or prior to the date of this Agreement;

 
(k)  
ISM Code compliance: all requirements of the ISM Code as they relate to each
Guarantor, the Technical Manager, the Commercial Manager, and each Vessel have
been complied with;

 
(l)  
ERISA: each Plan, other than any Multiemployer Plan (and each related trust,
insurance contract or fund), is in substantial compliance with its terms and
with all applicable laws, including without limitation ERISA and the Code; 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 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 Borrower 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 the Borrower’s operation; no Plan (other than a Multiemployer
Plan) which is subject to Section 412 of the Code or 

 
 
 
 
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Section 302 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 VI);
neither the Borrower 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 401(a)(29),
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 Borrower 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 Borrower 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
Borrower 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 Borrower 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; 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 Borrower, 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 Borrower 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 Borrower and its Subsidiaries do not maintain or contribute to
any employee welfare plan (as defined in Section 3(1) of ERISA) which 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; and
 
(m)  
OFAC: it is not a "national" of any "designated foreign country", within the
meaning of the Foreign Assets Control Regulations or the Cuban Asset Control
Regulations of the U.S. Treasury Department, 31 C.F.R., Subtitle B, Chapter V,
as amended, or a "specially designated national" listed by the Office of Foreign
Assets Control ("OFAC"), the U.S. Department of the Treasury, or any regulations
or rulings issued thereunder. Neither the making of the Advance nor the use of
the proceeds thereof nor the performance by the Borrower of its obligations
under any of the Finance Documents to which it is a party violates any statute,
regulation or executive order restricting loans to, investments in, or the
export of assets to, foreign countries or entities doing business there.

 
11.3  
Reliance on representations and warranties. The Obligors acknowledge that each
Creditor Party has expressly entered into this Agreement in reliance on, and
upon the condition that there are made, all of the declarations of the Obligors
in this Clause 11.

 
11.4  
Repeating representations and warranties. The declarations made by the relevant
Obligors in Clause 11.1 and 11.2 shall be deemed to be repeated on each Drawdown
Date and each Repayment Date and by reference to the facts and circumstances
then existing.

 
 
 
 
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12  
UNDERTAKINGS

 
12.1  
General. The Borrower shall undertake with each Creditor Party that, for so long
as sums are owing or may be owing under this Agreement or any of the other
Finance Documents, and unless the Agent, on the instructions of the Majority
Lenders, may otherwise permit, the Borrower shall:

 
(a)  
Financial Statements: arrange for the Agent to receive:

 
(i)  
within 90 days (or, if applicable, such shorter period as the SEC shall specify
for the filing of Quarterly Reports on Form 10-Q if the Borrower is required to
file such a Quarterly Report) after the end of each of the first three fiscal
quarters of each fiscal year (commencing with the third fiscal quarter of 2010),
a consolidated balance sheet and related statements of operations and cash flows
showing the financial position of the Borrower and its Subsidiaries as of the
close of such fiscal quarter and the consolidated results of its operations
during such fiscal quarter and the then-elapsed portion of the fiscal year and
(commencing in fiscal year 2010) setting forth in comparative form the
corresponding figures for the corresponding periods of the prior fiscal year,
all of which shall be in reasonable detail and which consolidated balance sheet
and related statements of operations and cash flows shall be certified by a
senior financial officer of the Borrower on behalf of the Borrower as fairly
presenting, in all material respects, the financial position and results of
operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP (subject to normal year-end audit adjustments and the
absence of footnotes) (it being understood that the delivery by the Borrower of
Quarterly Reports on Form 10-Q of the Borrower and its consolidated Subsidiaries
shall satisfy the requirements of this paragraph (b) to the extent such
quarterly reports include the information specified herein); and

 
(ii)  
within 110 days (or, if applicable, such shorter period as the SEC shall specify
for the filing of Annual Reports on Form 10-K if the Borrower is required to
file such an Annual Report) after the end of each fiscal year, a consolidated
balance sheet and related statements of operations, cash flows and owners’
equity showing the financial position of the Borrower and its Subsidiaries as of
the close of such fiscal year and the consolidated results of its operations
during such fiscal year and (commencing in fiscal year 2010) setting forth in
comparative form the corresponding figures for the prior fiscal year, which
consolidated balance sheet and related statements of operations, cash flows and
owners’ equity shall be audited by independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such consolidated
financial statements fairly present, in all material respects, the financial
position and results of operations of the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP (it being understood that the
delivery by the Borrower of Annual Reports on Form 10-K of the Borrower and its
consolidated Subsidiaries shall satisfy the requirements of this paragraph (a)
to the extent such Annual Reports include the information specified herein);

 
(b)  
Status and place of business: maintain, and cause each Guarantor to maintain,
its respective corporate existence under the laws of the jurisdiction of its
incorporation and shall maintain its place of business and keep their corporate
documents and records, at the address or addresses stated at the commencement of
this Agreement;

 
(c)  
Contents of Financial Statements: the financial statements to be delivered
pursuant to Clause 12.1(a) shall:

 
 
 
 
40

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(i)  
be prepared in accordance with all applicable laws and GAAP consistently
applied;

 
(ii)  
give a true and fair view of the state of affairs of the Borrower and its
consolidated Subsidiaries at the date of those accounts and of profit for the
period to which those accounts relate calculated in accordance with GAAP;

 
(iii)  
fully disclose or provide for all significant liabilities of the Borrower and
its consolidated Subsidiaries calculated in accordance with GAAP; and

 
(iv)  
at the time of the delivery of the financial statements, deliver a compliance
certificate of the senior financial officer of the Borrower in the form of
Schedule 9 to the effect that, to the best of the Borrower’s knowledge, no
Potential Event of Default or Event of Default has occurred and is continuing
or, if any Potential Event of Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof (in reasonable detail),
which certificate shall set forth the calculations required to establish whether
the Borrower was in compliance with the financial obligations in Clause 12.2(d)
to (f), inclusive, at the end of such fiscal quarter or year, as the case may
be;

 
(d)  
Material Adverse Effect: promptly advise the Agent or procure that the Agent is
advised of any event or circumstance which, in the reasonable opinion of the
Borrower, would be likely to have a Material Adverse Effect;

 
(e)  
Litigation: promptly give written notice to the Agent or procure that written
notice is given to the Agent of any litigation or arbitration or administrative
or other proceedings before or of any arbitration tribunal court, governmental
agency or administrative body affecting any Guarantor or any Vessel (which is in
respect of a claim in excess of $2,000,000) or affecting the Borrower (which is
in respect of a claim in excess of $10,000,000);

 
(f)  
Compliance with laws: comply with and procure that each Guarantor will comply
with the requirements of all laws, rules, regulations, orders and decrees of any
administrative, governmental, or judicial authority or other organisation or
body, applicable to any Obligor or to the Vessels, the non-compliance with which
could have a Material Adverse Effect;

 
(g)  
Payment of taxes: pay and discharge or procure the payment and discharge of all
taxes, assessments and governmental charges (being taxes, assessments or charges
related to any Vessel or which, if unpaid, might result in any action being
taken relating to any Vessel) imposed on any Obligor by any competent authority
on or before the date the same shall become due unless the same are being
contested in good faith by due action on the part of the relevant Obligor which
do not give rise to any risk of seizure or arrest of any Vessel which the
relevant Obligor or the relevant Obligor would be unable to lift or have
discontinued promptly following imposition thereof;

 
(h)  
ERISA: as soon as reasonably possible and, in any event, within ten (10) days
after the Borrower or any of its Subsidiaries or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, the Borrower will
deliver to the Agent, with sufficient copies for each of the Lenders, a
certificate of the senior financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the Borrower,
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 Borrower, 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 Borrower has previously
delivered to the 

 
 
 
 
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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 standards, 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 instalment payments) under Section 412 of the
Code or Section 302 of ERISA with respect to a Plan; 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
Borrower or any of its Subsidiaries; that a Plan (in the case of a Multiemployer
Plan, to the best knowledge of the Borrower or any of its Subsidiaries or ERISA
Affiliates) 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 Borrower 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
Borrower, 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 401(a)(29), 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 Borrower, 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 Borrower will deliver to the 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 of annual reports
and any records, documents or other information required to be furnished to the
PBGC, and any notices received by the Borrower, 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 Borrower, such Subsidiary or such
ERISA Affiliate, as applicable;
 
(i)  
Know your client. upon the Agent’s request, promptly supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
the Agent in order for each Lender to carry out and be satisfied with the
results of all necessary "know your client" or other checks which it is required
to carry out in relation to the

 
 
 
 
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transactions contemplated by this Agreement and the other Finance Documents and
to the identity of any parties to the Finance Documents (other than the Lenders)
and their directors and officers; and
 
(j)  
OFAC: shall to the best of its knowledge and ability:

 
(i)  
ensure that no person who owns a controlling interest in or otherwise controls
the Borrower or any Subsidiary thereof is or shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists maintained
by OFAC or included in any Executive Orders;

 
(ii)  
comply, and cause each of its Subsidiaries to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended; and

 
(iii)  
not use or permit the use of the proceeds of the Loan to violate any of the
foreign asset control regulations of OFAC or any enabling statute or Executive
Order relating thereto.

 
12.2  
Negative Undertakings. The Borrower further undertakes with each Creditor Party
that, for so long as sums are owing or may be owing under this Agreement or any
other Finance Document, and unless otherwise expressly permitted by the Majority
Lenders, the Borrower shall:

 
(a)  
No amendment to any Transaction Document: not agree and procure that the
Guarantors do not agree to any material amendment or supplement to, or waive or
fail to enforce, any Transaction Document to which any Obligor is a party;

 
(b)  
No disposal of the Vessels: subject to Clause 5.12, and except pursuant to the
relevant Finance Documents, not make and procure that the Guarantors shall not
make any act of disposal of any nature whatever of any of the Vessels, whether
gratuitous or otherwise, or enter into any commitment to third parties affecting
the ownership of any Vessel (unless the effectiveness of such commitment is
itself expressed to be conditional upon the prior mandatory prepayment of the
relevant Loan pursuant to Clauses 5.8 (a) and 5.9);

 
(c)  
No change in Technical Manager or Commercial Manager: not change and shall
procure that there is no change to, the Technical Manager or the Commercial
Manager without the prior written consent of the Agent, acting upon instruction
of the Majority Lenders (with such consent not to be unreasonably withheld);

 
(d)  
Maximum Leverage Ratio: not permit the Leverage Ratio on the last day of any
fiscal quarter of the Borrower ended on or after the Effective Date, to be
greater than 5.50:1.00;

 
(e)  
Minimum Consolidated Interest Coverage Ratio: not permit the Consolidated
Interest Coverage Ratio on the last day of any fiscal quarter of the Borrower
ended on or after the Effective Date, to be less than 2.00:1.00;

 
(f)  
Consolidated Net Worth: not permit its Consolidated Net Worth at any time to be
less than the Minimum Consolidated Net Worth;

 
(g)
Dividends: not, and will not permit any of the Guarantors to, authorize, declare
or pay any Dividends with respect to the Borrower or any of the Guarantors,
except that:

 
(i)  
(x) any Subsidiary of the Borrower which is not a Guarantor may pay Dividends to
the Borrower or any Wholly-Owned Subsidiary of the Borrower, (y) any Guarantor
may pay Dividends to the Borrower or any other Guarantor and (z) if the
respective Subsidiary is not a Wholly-Owned Subsidiary of the

 
 
 
 
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Borrower, such Subsidiary may pay cash dividends to its shareholders generally
so long as the Borrower 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 Dividends and taking into account the
relative preferences, if any, of the various classes of equity interests of such
Subsidiary);
 
(ii)  
so long as no Potential Event of Default or Event of Default has occurred and is
continuing, the Borrower may make, pay or declare cash Dividends; provided that,
for all Dividends paid pursuant to this clause (ii), (A) Dividends shall be paid
within 90 days of the declaration thereof; (B) Dividends paid in respect of a
fiscal quarter shall only be paid after the date of delivery of quarterly or
annual financial statements for such fiscal quarter, pursuant to Clause 12.1(a)
and on or prior to 45 days after the last day of the immediately succeeding
fiscal quarter, (C) no Potential Event of Default or Event of Default has
occurred and is continuing at the time of declaration, (D) no Potential Event of
Default or Event of Default has occurred and is continuing (or would arise after
giving effect thereto) at the time of payment, (E) the aggregate amount of all
Dividends paid in respect of a fiscal quarter shall not exceed the Permitted
Dividend Amount for such fiscal quarter and (F) on or prior to the declaration
and payment of a Dividend, the Borrower shall deliver to the Agent an officer’s
certificate signed by the senior financial officer of the Borrower, certifying
that the requirements set forth in preceding clauses (A) through (E) are
satisfied and setting forth the calculation of the Permitted Dividend Amount in
reasonable detail;

 
(iii)  
so long as no Potential Event of Default or Event of Default has occurred and is
continuing, the Borrower may purchase or redeem shares of common stock in the
Borrower in market purchases under Rule 10b-18 or other purchases approved by
the Borrower’s board of directors, any committee thereof or any authorized
officer in an amount up to the Permitted Dividend Amount for the immediately
preceding fiscal quarter; provided that, (A) no Potential Event of Default or
Event of Default has occurred and is continuing at the time of any such
purchases, (B) no Potential Event of Default or Event of Default would arise
after giving effect to any such purchases and (C) the Borrower in the exercise
of its rights under this Clause 12.2 shall not be permitted to purchase or
redeem shares beneficially owned directly or indirectly by Peter Georgiopoulos;

 
(iv)  
the Borrower may authorize, declare and distribute a dividend of Rights (as such
term is defined and which are convertible into other securities as set forth in
the Shareholder Rights Agreement) as contemplated by the Shareholder Rights
Agreement; and

 
(v)  
the Borrower may exercise and, so long as no Potential Event of Default or Event
of Default has occurred and is continuing, enter into Capped Call Arrangements
and such Capped Call Arrangements will not be construed as a share repurchase,
Dividend or return of capital for the purposes of this Agreement;

 
(h)  
Indebtedness. not, and will not permit any of the Guarantors to, contract,
create, incur, assume or suffer to exist any Indebtedness (other than
Indebtedness incurred pursuant to this Agreement and the other Finance
Documents) except:

 
(i)  
the Borrower may incur Indebtedness so long as no Potential Event of Default or
Event of Default has occurred and is continuing, such Indebtedness would not
cause any Potential Event of Default or Event of 

 
 
 
 
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Default, either on a pro forma basis to include earnings that would have
resulted from such Indebtedness for the most recently ended Test Period reported
to the Agent, or on a projected basis for the one year period following such
incurrence, with each of the covenants set forth in Clause 12.2(d)-(f)
inclusive;
 
(ii)  
the Borrower may enter into and remain liable under Interest Rate Protection
Agreements and Other Hedging Agreements entered into in the ordinary course of
business and not for speculative purposes;

 
(iii)  
Indebtedness of the Borrower arising under the DnB Credit Facility and DB Credit
Facility; and

 
(iv)  
Indebtedness (other than Financial Indebtedness) of the Guarantors reasonably
incurred in the course of operating or chartering a Vessel;

 
(i)  
Advances, Investments and Loans. will not, and will not permit any of the
Guarantors to, directly or indirectly, lend money or credit or make advances to
any Person, or purchase or acquire any Equity Interests, 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:

 
(i)  
the Borrower and the Guarantors may acquire and hold accounts receivable owing
to any of them;

 
(ii)  
so long as no Event of Default exists or would result therefrom, the Borrower
may make loans and advances in the ordinary course of business to its employees
so long as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $500,000;

 
(iii)  
the Guarantors may make intercompany loans and advances to the Borrower and
between or among one another, and Subsidiaries of the Borrower other than the
Guarantors may make intercompany loans and advances to the Borrower or any other
Subsidiary of the Borrower, provided that any loans or advances to the Borrower
or any Guarantors pursuant to this Clause 12.2(i) shall be subordinated to the
obligations of the respective Obligor under this Agreement on terms reasonably
satisfactory to the Agent;

 
(iv)  
the Borrower may make Investments in the Guarantors and, so long as no Event of
Default exists and is continuing, the Borrower may make Investments in its other
Wholly-Owned Subsidiaries so long as management of the Borrower in good faith
believe that, after giving effect to such Investment, the Borrower shall be able
to meet its payment obligations in respect of this Agreement;

 
(v)  
so long as no Event of Default exists or could reasonably be expected to result
therefrom, the Borrower and its Subsidiaries (other than the Guarantors) may
make Investments in joint ventures in the ordinary course of business; and

 
(vi)  
so long as no Event of Default exists or could reasonably be expected to result
therefrom, the Borrower and its Subsidiaries (other than the Guarantors) may
make Investments in a Person engaged in drybulk shipping operations;

 
(j)  
Transactions with Affiliates. will not, and will not permit any of the
Guarantors to, enter into any transaction or series of related transactions,
whether or not in the 

 
 
 
 
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ordinary course of business, with any Affiliate of such Person, other than 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:
 
(i)  
Dividends may be paid to the extent provided in Clause 12.2(g);

 
(ii)  
loans and other Investments may be made and other transactions may be entered
into between the Borrower and its Subsidiaries to the extent permitted by
Clauses 12.2(h) and 12.2(i);

 
(iii)  
the Borrower may pay customary director’s fees;

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

 
(v)  
the Borrower and its Subsidiaries may pay management fees to Wholly-Owned
Subsidiaries of the Borrower in the ordinary course of business; and

 
(vi)  
in the event that the Borrower or any of its Subsidiaries (other than a
Guarantor) owns, operates or uses an aircraft for business purposes, the
foregoing will not prevent arrangements (and such arrangements shall for this
purpose be deemed to be arms length arrangements) for use of such aircraft when
not required for business purposes by directors or officers of the Borrower so
long as such travel is authorized pursuant to the Borrower's applicable policies
and such directors or officers either: (i) pay pursuant to a time sharing
arrangement, a charter or similar arrangements no less than the incremental out
of pocket cost to the Borrower and such Subsidiaries of the use of the aircraft;
or (ii) pay or are imputed the applicable standard industry fare level for the
flight under Internal Revenue Service regulations, in each case as determined by
the Borrower; and

 
(k)  
Merger. not sell, transfer or dispose of all or substantially all of its assets
whether by one transaction or a series of related transactions and shall not
consolidate or merge with any other Person unless (A) at the time of such
transaction and after giving effect thereto, no Potential Event of Default or
Event of Default shall have occurred and be continuing and (B) the surviving
entity in such consolidation or merger shall be the Borrower and the Borrower
shall have delivered to the Agent, not less than ten (10) Business Days in
advance of such consolidation or merger, an officer’s certificate signed by a
senior financial officer of the Borrower, certifying (i) that no Potential Event
of Default or Event of Default has occurred and is continuing (or would arise
after giving effect to the intended consolidation or merger) and (ii) pro forma
financial statements of the Borrower demonstrating the compliance of the
Borrower with all covenants under this Agreement after giving effect to such
merger or consolidation.

 
12.3  
Title; negative pledge. The Borrower will not and will procure that the
Guarantors shall not create or permit to arise any Security Interest (except for
Permitted Security Interests) over any Vessel or any other asset of any
Guarantor, present or future.

 
12.4  
Information provided to be accurate. The Borrower shall ensure that all
financial and other information which is provided in writing by or on behalf of
any Obligor under or in connection with any Finance Document will be true and
not misleading and will not omit any material fact or consideration.

 
12.5  
No amendment to MOA. The Borrower will not agree to any material amendment or
supplement to, or waive or fail to enforce, any MOA or any of their respective
provisions.

 
 
 
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12.6  
Confirmation of no default. The Borrower will, within 2 Business Days after
service by the Agent of a written request thereof, serve on the Agent a notice
which is signed by the Chief Financial Officer and which states that:

 
(a)  
no Event of Default or Potential Event of Default has occurred; or

 
(b)  
no Event of Default or Potential Event of Default has occurred, except for a
specified event or matter, of which all material details are given;

 
the Agent may serve requests under this Clause 12.6 from time to time if asked
to do so by any Lender.
 
12.7  
Notification of default. The Borrower will notify the Agent as soon as the
Borrower becomes aware of:

 
(a)  
the occurrence of an Event of Default or a Potential Event of Default; or

 
(b)  
any matter which indicates that an Event of Default or a Potential Event of
Default may have occurred;

 
and will keep the Agent fully up-to-date with all developments.

12.8  
Provision of further information. The Borrower will, as soon as practicable
after receiving the request, provide the Agent with any additional financial or
other information as the Agent or any Lender may (from time to time) reasonably
request relating:

 
(a)  
to the Borrower, the Vessels, the Earnings or the Insurances; or

 
(b)  
to any other matter relevant to, or to any provision of, a Finance Document;

 
which may be requested by the Agent, the Security Trustee or any Lender at any
time.

13  
CORPORATE UNDERTAKINGS OF THE GUARANTORS

 
13.1  
General. The Guarantors undertake (and the Borrower undertakes to cause each
Guarantor to) comply with the following provisions of this Clause 13 at all
times during the Security Period.

 
13.2  
Negative undertakings. The Guarantors will not (and the Borrower undertakes to
procure that the Guarantors do not):

 
(a)  
carry on any business other than the ownership, chartering and operation of the
Vessels;

 
(b)  
pay any Dividend or make any other form of distribution or effect any form of
redemption, purchase or return of share capital (other than as permitted under
clause 12.2(g));

 
(c)  
other than as permitted under Clause 12.2(i), provide any form of credit or
financial assistance to:

 
(i)  
a person who is directly or indirectly interested in the Guarantor's share or
loan capital; or

 
(ii)  
any company in or with which such a person is directly or indirectly interested
or connected;

 
 
 
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or, subject to Clause 12.2(j), enter into any transaction with or involving such
a person or company on terms which are, in any respect, less favourable to any
Guarantor than those which it could obtain in a bargain made at arms' length;

(d)  
issue, allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share capital;

 
(e)  
acquire any shares or other securities other than US or UK Treasury bills and
certificates of deposit issued by major North American or European banks;

 
(f)  
enter into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation;

 
(g)  
make any loans or advances to any person other than in accordance with Clause
12.2(i); or

 
(h)  
except for (i) Financial Indebtedness under this Agreement and the other
Transaction Documents to which it is a party, and (ii) Financial Indebtedness to
the Borrower and any Guarantor permitted under Clause 12.2(i), not incur or
agree to incur or issue any Financial Indebtedness, nor make any commitments,
other than Security Interests to be created under such Transaction Documents
except, with respect to any Guarantor Financial Indebtedness and liabilities
arising in the ordinary course of its ownership and chartering of the Vessel
that it owns.

 
14  
INSURANCE UNDERTAKINGS

 
(a)  
General. The Borrower also undertakes with each Creditor Party to comply with
the following provisions of this Clause 14 at all times during the Security
Period except as the Agent (on the instructions of the Majority Lenders) may
otherwise permit;

 
(b)  
Maintenance of obligatory insurances. each Mortgaged Vessel shall be kept
insured against:

 
(i)  
fire and usual marine risks (including hull and machinery and excess risks);

 
(ii)  
war risks; and

 
(iii)  
protection and indemnity risks;

 
(c)  
Terms of obligatory insurances. such insurances shall be effected:

 
(i)  
in United States Dollars for the insurances referred to in below;

 
(ii)  
in the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis at least one hundred and thirty per cent (130%) of the
relevant amount of the Loan;

 
(iii)  
in the case of oil pollution liability risks, for an aggregate amount equal to
the highest level of cover from time to time available under basic protection
and indemnity club entry and in the international marine insurance market and
including freight, demurrage and defence;

 
(iv)  
in relation to protection and indemnity risks for an aggregate amount equal to
the highest level of cover afforded by a member of the International Group of
Protection and Indemnity Associations;

 
(v)  
on approved terms; and

 
 
 
 
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(vi)  
through approved brokers and with approved insurance companies and/or
underwriters or, in the case of war risks and protection and indemnity risks, in
approved war risks and protection and indemnity risks associations;

 
(d)  
Further protections. in addition to the terms set out in Clause 14(c), the
obligatory insurances shall:

 
(i)  
[intentionally omitted];

 
(ii)  
name the Security Trustee as sole loss payee with a loss payable clause for
endorsement in the form annexed to the General Assignment Deed;

 
(iii)  
provide that all payments by or on behalf of the insurers under the obligatory
insurances to the Security Trustee shall and, to the extent the applicable
persons referred to in Clause 14(c)(vi) are willing to agree, be made without
set-off, counterclaim or deductions or condition whatsoever;

 
(iv)  
provide that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the Security Trustee
or any other Creditor Party; and

 
(v)  
provide that the Security Trustee may make proof of loss if the Borrower or a
Guarantor fails to do so;

 
(e)  
Renewal of obligatory insurances. in relation to obligatory insurances:

 
(i)  
at least 14 (fourteen) days before the expiry of any obligatory insurances, the
Security Trustee shall be notified of the brokers (or other insurers) and any
protection and indemnity or war risks association through or with whom it is
proposed that insurance shall be renewed and of the proposed terms of renewal,
and the Majority Lenders’ agreement shall be obtained that such insurances will
comply with the requirements of Clause 14(c);

 
(ii)  
no later than 7 days before the expiry of any obligatory insurance, the
obligatory insurances shall be renewed, in accordance with the requirements of
Clause 14(c); and

 
(iii)  
the approved brokers and/or the war risks and protection and indemnity
associations with which such a renewal is effected shall promptly after the
renewal notify the Security Trustee in writing of the terms and conditions of
the renewal;

 
(f)  
Copies of policies; letters of undertaking. the Borrower shall procure that each
Guarantor shall ensure that all approved brokers provide the Agent with
pro-forma copies of all policies relating to the relevant obligatory insurances
which they are to effect or renew and of a letter or letters of undertaking
addressed to the Security Trustee and in the form customary for the market from
time to time;

 
(g)  
Copies of certificates of entry. any protection and indemnity and/or war risks
associations in which the Mortgaged Vessels are entered shall provide the
Security Trustee with:

 
(i)  
a copy of the certificates of entry for the Mortgaged Vessels;

 
(ii)  
a letter or letters of undertaking addressed to the Security Trustee in such
form as is customary for the market from time to time; and

 
 
 
 
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(iii)  
to the extent applicable, a copy of each certificate of financial responsibility
for pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to the Mortgaged Vessel owned by it;

 
(h)  
Deposit of original policies. all policies relating to obligatory insurances are
deposited with the approved brokers through which the insurances are effected or
renewed;

 
(i)  
Payment of premiums. all premiums or other sums payable in respect of the
obligatory insurances shall be paid punctually and that all relevant receipts
are produced when so required by the Security Trustee;

 
(j)  
Guarantees.  any guarantees required by a protection and indemnity or war risks
association are promptly issued and remain in full force and effect;

 
(k)  
Restrictions on employment. the Mortgaged Vessels shall not be employed or
permit to be employed outside the cover provided by any obligatory insurances
without first obtaining the consent of the insurers and complying with any
requirements (as to extra premiums or otherwise) which the insurers specify;

 
(l)  
Compliance with terms of insurances. no act or thing shall be done or be omitted
which would or might render any obligatory insurance invalid, void, voidable or
unenforceable or render any sum payable thereunder repayable in whole or in
part; and, in particular:

 
(i)  
all necessary action shall be taken and all requirements which may from time to
time be applicable to the obligatory insurances shall be complied with (without
limiting the obligation contained in Clause 14(c) above) to ensure that the
obligatory insurances are not made subject to any exclusions or qualifications
to which the Security Trustee has not given its prior approval; and

 
(ii)  
no changes relating to the classification or classification society or manager
or operator of each Mortgaged Vessel shall be made unless approved by the
underwriters of the obligatory insurances;

 
(m)  
Alteration to terms of insurances. no alteration to the terms of any obligatory
insurance shall be made or agreed and no right relating to any obligatory
insurance shall be waived, as long as the required minimums are maintained;

 
(n)  
Settlement of claims.  without the prior written consent of the Agent, there
shall not be any settlement, compromise or abandonment of any claim under any
obligatory insurance for Total Loss or for a Major Casualty, and all things
necessary shall be done and all documents, evidence and information shall be
provided to enable the Security Trustee to collect or recover any moneys which
become payable at any time in respect of the obligatory insurances; provided,
however, that in the case of a Major Casualty, the Agent shall not unreasonably
withhold its consent to any such settlement, compromise or abandonment of any
claim;

 
(o)  
Provision of copies of communications.  the Security Trustee, at the time of
each such communication, shall be provided with copies of all written
communications which could be considered material in the context of any Finance
Document with:

 
(i)  
the approved brokers;

 
(ii)  
the approved protection and indemnity and/or war risks associations; and

 
(iii)  
the approved insurance companies and/or underwriters;

 
 
 
 
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which relate directly or indirectly to:
 
(i)  
the obligations of the Borrower relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; or

 
(ii)  
any credit arrangements made between the Borrower and any of the persons
referred to in paragraphs (i) and/or (ii) above relating wholly or partly to the
effecting or maintenance of the obligatory insurances;

 
(p)  
Provision of information. in addition, there shall be provided to the Security
Trustee (or any persons which it may designate) any information which the
Security Trustee (or any such designated person) reasonably requests for the
purpose of:

 
(i)  
obtaining or preparing any report from an independent marine insurance broker as
to the adequacy of the obligatory insurances effected or proposed to be
effected; provided always that the Agent shall only require any such report at
the time of making the relevant Loan for the Vessel for which such report
relates and thereafter if there is a material change to the insurances of a
Mortgaged Vessel to those which a report has been previously obtained or
prepared; and/or

 
(ii)  
effecting, maintaining or renewing any such insurances as are referred to in
Clause 14(q) below or dealing with or considering any matters relating to any
such insurances;

 
and the Borrower shall indemnify the Security Trustee forthwith upon demand, in
respect of all fees and other expenses incurred by or for the account of the
Security Trustee in connection with any such report as is referred to in
paragraph (i) above; and
 
(q)  
Mortgagee’s interest.  the Agent shall, subject as provided below, be entitled
from time to time to effect, maintain, and renew a mortgagee’s interest marine
insurance in relation to each Mortgaged Vessel in an amount equal to one hundred
and ten per cent (110%) of the relevant Loan on such terms, through such
insurers and generally in such manner as the Agent (on the instructions of the
Majority Lenders) may from time to time consider appropriate.  The Borrower upon
demand shall indemnify the Agent fully in respect of all premiums and other
expenses which are incurred in connection with or with a view to effecting,
maintaining or renewing any such insurance or dealing with, or considering any
matter arising out of any such insurance. It is further agreed that, to the
extent any surplus funds remain after applying amounts received in respect of a
claim on the mortgagee's interest marine insurance, such surplus funds may be
paid to the Borrower or other person entitled to it.

 
15  
SHIP UNDERTAKINGS

 
General. The Borrower also undertakes with each Creditor Party to comply with,
or cause each Guarantor to comply with, each of the covenants set forth in each
of the Mortgages.
 
16  
SECURITY COVER

 
16.1  
Minimum required security cover. The Borrower will not permit the aggregate
Appraised Value of all Mortgaged Vessels (plus the value of any additional
security provided pursuant to Clause 16.2) at any time to equal less than 130%
of the aggregate principal amount of outstanding Loans at such time, provided
that, a default under this Clause 16.1 shall not constitute an Event of Default
if the Borrower complies with Clause 16.2 within the time specified therein (it
being understood that any action taken under Clause 16.2 in respect of

 
 
 
 
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this proviso shall only be effective to cure such default pursuant to this
Clause 16.1 to the extent that no Potential Event of Default or Event of Default
exists hereunder immediately after giving effect thereto).
 
16.2  
Provision of additional security; prepayment. If the Agent serves a notice on
the Borrower stating that a default exists under Clause 16.1, the Borrower
shall, within thirty (30) days after the date on which the Agent's notice is
served, either:

 
(a)  
provide, or ensure that a third party provides, additional security which, in
the opinion of the Majority Lenders, has a net realisable value at least equal
to the shortfall and is documented in such terms as the Agent may, with the
authorisation of the Majority Lenders, approve or require; or

 
(b)  
prepay such part (at least) of the Loans as will eliminate the shortfall.

 
16.3  
Valuation of Vessel. The Appraised Value of a Vessel at any date is that shown
by a valuation prepared:

 
(a)  
as at a date not more than 14 days previously;

 
(b)  
by an Approved Appraiser;

 
(c)  
with or without physical inspection of a Vessel (as the Agent may require); and

 
(d)  
on the basis of a sale for prompt delivery for cash on normal arm's length
commercial terms as between a willing seller and a willing buyer, free of any
existing charter or other contract of employment.

 
16.4  
Value of additional vessel security. The net realisable value of any vessel
pledged as additional security under Clause 16.2 shall be its Appraised Value.

 
16.5  
Valuations binding. Any valuation under Clause 16.3 or 16.4 shall be binding and
conclusive as regards the Borrower, as shall be any valuation which the Majority
Lenders make of any additional security which does not consist of or include a
Security Interest.

 
16.6  
Provision of information. The Borrower shall promptly provide the Agent and any
Approved Appraiser with any information which the Agent or the Approved
Appraiser may request for the purposes of the valuation; and, if the Borrower
fails to provide the information by the date specified in the request, the
valuation may be made on any basis and assumptions which the shipbroker or the
Majority Lenders (or the expert appointed by them) consider prudent.

 
16.7  
Payment of valuation expenses. Without prejudice to the generality of the
Borrower's obligations under Clauses 20 and 21, the Borrower shall, on demand,
pay the Agent the reasonable amount of the fees and expenses of any shipbroker
or expert instructed by the Agent under this Clause and all reasonable legal and
other expenses incurred by any Creditor Party in connection with any matter
arising out of this Clause 16.7.

 
16.8  
Appraisal of the Vessels. The Borrower shall procure, at its own expense, that a
valuation of the Vessels in accordance with Clause 16.3 is undertaken on the six
month anniversary of the first Drawdown Date and on each six month anniversary
thereafter, starting from the date of this Agreement. During any calendar year,
the Borrower shall procure one appraisal in addition to those required by the
preceding sentence of this Clause 16.8, if the Agent or any Lender in good faith
determines that current market or other conditions affecting the value of the
Vessels (or any of them) merit the delivery of such appraisal and the Agent so
notifies the Borrower.  Any additional valuation which the Agent or any Lender
requires, shall be undertaken at the Agent's or such Lender’s expense.

 
16.9  
Intentionally omitted.

 
 
 
 
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16.10  
Application of prepayment. Clause 5.10 shall apply in relation to any prepayment
pursuant to Clause 16.2(b).

 
17  
PAYMENTS AND CALCULATIONS

 
17.1  
Payment on non-Business Day. If any payment by the Borrower under a Finance
Document would otherwise fall due on a day which is not a Business Day:

 
(a)  
the due date shall be extended to the next succeeding Business Day; or

 
(b)  
if the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business Day;

 
and interest shall be payable during any extension under paragraph (a) at the
rate payable on the original due date.

17.2  
Basis for calculation of periodic payments. All interest and commitment fee and
any other payments under any Finance Document which are of an annual or periodic
nature shall accrue from day to day and shall be calculated on the basis of the
actual number of days elapsed and a 360 day year.

 
17.3   Distribution of payments to Creditor Parties. Subject to Clauses 17.4,
17.5 and 17.6:
 
(a)  
any amount received by the Agent under a Finance Document for distribution or
remittance to a Lender, or the Security Trustee shall be made available by the
Agent to that Lender, or, as the case may be, the Security Trustee by payment,
with funds having the same value as the funds received, to such account as the
Lender and or the Security Trustee may have notified to the Agent not less than
5 Business Days previously; and

 
(b)  
amounts to be applied in satisfying amounts of a particular category which are
due to the Lenders generally shall be distributed by the Agent to each Lender
pro rata to the amount in that category which is due to it.

 
17.4  
Permitted deductions by Agent. Notwithstanding any other provision of this
Agreement or any other Finance Document, the Agent may, before making an amount
available to a Lender, deduct and withhold from that amount any sum which is
then due and payable to the Agent from that Lender under any Finance Document or
any sum which the Agent is then entitled under any Finance Document to require
that Lender to pay on demand.

 
17.5  
Agent only obliged to pay when monies received. Notwithstanding any other
provision of this Agreement or any other Finance Document, the Agent shall not
be obliged to make available to the Borrower or any Lender any sum which the
Agent is expecting to receive for remittance or distribution to the Borrower or
that Lender until the Agent has satisfied itself that it has received that sum.

 
17.6  
Refund to Agent of monies not received. If and to the extent that the Agent
makes available a sum to the Borrower or a Lender, without first having received
that sum, the Borrower or (as the case may be) the Lender concerned shall, on
demand:

 
(a)  
refund the sum in full to the Agent; and

 
(b)  
pay to the Agent the amount (as certified by the Agent) which will indemnify the
Agent against any funding or other loss, liability or expense incurred by the
Agent as a result of making the sum available before receiving it.

 
 
 
 
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17.7  
Agent may assume receipt. Clause 17.6 shall not affect any claim which the Agent
has under the law of restitution, and applies irrespective of whether the Agent
had any form of notice that it had not received the sum which it made available.

 
17.8  
Agent's memorandum account. The Agent shall maintain a memorandum account
showing the amounts advanced by the Lenders and all other sums owing to the
Agent, the Security Trustee and each Lender from the Borrower and each Obligor
under the Finance Documents and all payments in respect of those amounts made by
the Borrower and any Obligor.

 
17.9  
Accounts prima facie evidence. If any accounts maintained under Clause 17.8 show
an amount to be owing by the Borrower or an Obligor to a Creditor Party, those
accounts shall be prima facie evidence that that amount is owing to that
Creditor Party.

 
18  
APPLICATION OF RECEIPTS

 
18.1  
Normal order of application. Any sums which are received or recovered by any
Creditor Party under or by virtue of any Finance Document after service of
notice on the Borrower under Clause 19.2 shall be applied:

 
(a)  
FIRST: in or towards satisfaction of any amounts then due and payable under the
Finance Documents in the following order and proportions:

 
(i)  
first, in or towards satisfaction pro rata of all amounts then due and payable
to the Creditor Parties under the Finance Documents other than those amounts
referred to at paragraphs (ii) and (iii) (including, but without limitation, all
amounts payable by the Borrower under Clauses 20 and 21 of this Agreement or by
the Borrower or any Obligor under any corresponding or similar provision in any
other Finance Document);

 
(ii)  
secondly, in or towards satisfaction pro rata of any and all amounts of interest
or default interest payable to the Creditor Parties under the Finance Documents;
and

 
(iii)  
thirdly, in or towards satisfaction pro rata of the Loans;

 
(b)  
SECONDLY: in retention of an amount equal to any amount not then due and payable
under any Finance Document but which the Agent, by notice to the Obligors and
the other Creditor Parties, states in its reasonable opinion will or may become
due and payable in the future and, upon those amounts becoming due and payable,
in or towards satisfaction of them in accordance with the provisions of
sub-paragraph (a); and

 
(c)  
THIRDLY: any surplus shall be paid to the Borrower or to any other person
appearing to be entitled to it.

 
18.2  
Appropriation rights overridden. This Clause 18 shall override any right of
appropriation possessed, and any appropriation made, by the Borrower or any
Obligor provided such variation does not change the overall amount being
applied.

 
19  
EVENTS OF DEFAULT AND ACCELERATION

 
19.1  
Events of Default. No Drawing under this Agreement may be requested from the
Lenders and the Agent may, and if instructed by the Majority Lenders shall,
terminate the Commitments of the Lenders and all of their obligations towards
the Borrower and/or require immediate payment of the full amount of the Loan,
all accrued interest and all other amounts accrued or owing under or in
connection with this Agreement, if any one of the following Events of Default
occurs and is continuing:

 
 
 
 
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(a)  
Non-payment in respect of repayment of any Loan or payment of interest on any
Loan: the Borrower is in default in the repayment of any sum due in respect of
any Loan or any part thereof under Clause 5 and/or in respect of any payment of
interest due under Clause 6 when and as the same shall become due and payable as
therein and herein provided and such default shall continue for five (5)
Business Days after the due date;

 
(b)  
Non-payment of other amounts: an Obligor is in default in the payment of any
other amounts payable under this Agreement or any other Finance Document and
such default shall not have been cured within five (5) Business Days from the
receipt of a demand for payment from the Agent;

 
(c)  
Other obligations under this Agreement: any Obligor fails to perform any of its
obligations (other than those referred to elsewhere in this Clause 19) under
this Agreement and (if such failure is capable of remedy) such failure remains
unremedied thirty (30) Business Days after the Borrower has received notice of
such failure;

 
(d)  
Other Finance Documents: (i) at any time after the execution and delivery
thereof, any of the other Finance Documents shall cease to be in full force and
effect, or shall cease in any material respect to give the Security Trustee or
the Agent, as applicable, the Security Interests, rights, powers and privileges
purported to be created thereby, in favour of the Security Trustee or the Agent,
as applicable, superior to and prior to the rights of all third Persons (except
in connection with Permitted Security Interests), and subject to no other
Security Interests (except Permitted Security Interests), or (ii) following the
expiry of any applicable grace period, an “event of default” (as defined in any
Mortgage) shall have occurred under any Mortgage, or (iii) any Obligor shall
have defaulted 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 (other than the Mortgages) and (in the case of clause
(iii) only) (if such default is capable of remedy) such default remains
unremedied for ten (10) days after the relevant Obligor has received notice of
such default;

 
(e)  
Financial Indebtedness: any of the following occurs in relation to any Financial
Indebtedness of any Obligor (in relation to the Borrower only, which Financial
Indebtedness exceeds $5,000,000):

 
(i)  
any of its Financial Indebtedness is not paid when due or, if so payable, on
demand;

 
(ii)  
any of its Financial Indebtedness becomes due and payable or capable of being
declared due and payable prior to its stated maturity date as a consequence of
any event of default;

 
(iii)  
a lease, hire purchase agreement or charter creating any of its Financial
Indebtedness is terminated by the lessor or owner or becomes capable of being
terminated as a consequence of any termination event;

 
(iv)  
any overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other derivative
contract or transaction, relating to any of its Financial Indebtedness ceases to
be available or becomes capable of being terminated as a result of any event of
default, or cash cover is required, or becomes capable of being required, in
respect of such a facility as a result of any event of default; or

 
(v)  
any Security Interest securing any of its Financial Indebtedness becomes
unenforceable;

 
 
 
 
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(f)  
Insolvency proceedings: any of the following occurs in relation to any Obligor:

 
(i)  
it becomes unable to pay its debts as they fall due within the meaning of
section 123(1)(e) of the Insolvency Act 1986;

 
(ii)  
a winding-up or administration order is made in any jurisdiction;

 
(iii)  
any administrative or other receiver is appointed over any of its assets;

 
(iv)  
it makes any formal declaration of bankruptcy or any formal statement to the
effect that it is insolvent or likely to become insolvent, or a winding up or
administration order is made in relation to it, or its members or directors pass
a resolution to the effect that it should be wound up, placed in administration
or cease to carry on business, save that this paragraph does not apply to a
fully solvent winding up of any Obligor other than the Borrower or any Guarantor
which is, or is to be, effected for the purposes of an amalgamation or
reconstruction previously approved by the Majority Lenders and effected not
later than 3 months after the commencement of the winding up;

 
(v)  
a petition is presented in any Pertinent Jurisdiction for the winding up or
administration, or the appointment of a provisional liquidator, of any Obligor
unless the petition is being contested in good faith and on substantial grounds
and is dismissed or withdrawn within 60 days of the presentation of the
petition;

 
(vi)  
any Obligor petitions a court, or presents any proposal for, any form of
judicial or non-judicial suspension or deferral of payments, reorganisation of
its debt (or certain of its debt) or arrangement with all or a substantial
proportion (by number or value) of its creditors or of any class of them or any
such suspension or deferral of payments, reorganisation or arrangement is
effected by court order, contract or otherwise;

 
(vii)  
any meeting of the members or directors of any Obligor is summoned for the
purpose of considering a resolution or proposal to authorise or take any action
of a type described in paragraphs (iii), (iv), (v) or (vi); or

 
(viii)  
in a Pertinent Jurisdiction other than England, any event occurs or any
procedure is commenced which is similar to any of the foregoing;

 
(g)  
Corporate modification: without the prior consent of the Majority Lenders, there
is a merger, splitting-up or dissolution of any Obligor not otherwise permitted
under this Agreement, or transfer of the registered office of any Obligor to
another country, or a modification of the corporate purpose or the corporate
form of any Obligor;

 
(h)  
Incorrect or misleading representation or warranty: any representation, warranty
or statement made by, or by an officer of any Obligor in a Finance Document or
in a Drawdown Notice or other notice or document relating to a Finance Document
shall have been incorrect or misleading when made in any material respect;

 
(i)  
Cessation of business; disposal of assets: any Obligor ceases to carry on
business or disposes of all or substantially all of its business, property
and/or assets;

 
(j)  
Governmental measures or other impediment: (i) any governmental measure or
decision, whether applying generally or solely to an Obligor or any Vessel is
taken in the jurisdiction of incorporation of the relevant Obligor or any other
country from or through which payments hereunder are made by the relevant
Obligor or (ii) any other event occurs in the jurisdiction of the relevant
Obligor or any other country from or through which payments hereunder are made
by the relevant Obligor which, in either

 
 
 
 
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case, might reasonably be expected to impede the performance of this Agreement
by any Obligor;
 
(k)  
Illegality: it becomes unlawful in any Pertinent Jurisdiction or impossible:

 
(i)  
for any Obligor to discharge any liability under a Transaction Document or to
comply with any other obligation which the Majority Lenders consider material
under a Transaction Document; or

 
(ii)  
for the Agent, the Security Trustee or any of the Lenders to exercise or enforce
any right under, or to enforce any Security Interest created by, a Finance
Document;

 
(l)  
Absence of consents: any official consent necessary to enable the relevant
Guarantor to own, lease or charter its Vessel or to enable any Obligor to comply
with any provision of any Transaction Document which is not granted, expires
without being renewed, is revoked or becomes liable to revocation or any
condition of such a consent is not fulfilled;

 
(m)  
Invalidity, unenforceability of Transaction Documents or Security
Interests:  any material provision proves to have been or becomes invalid or
unenforceable, or a Security Interest created by a Transaction Document proves
to have been or becomes invalid or unenforceable;

 
(n)  
Repudiation and rescission of agreements: any party (other than the Agent, the
Security Trustee or a Lender) to a Transaction Document (other than the
Charters) rescinds or purports to rescind or repudiates or purports to repudiate
that Transaction Document or any of the Security Interests or evidences an
intention to rescind or repudiate a Transaction Document or any Security
Interest or amends a Transaction Document (without the consent of the Majority
Lenders) where to do so has or is likely to have a Material Adverse Effect on
the interests of the Creditor Parties under the Finance Documents;

 
(o)  
Security imperilled: the security constituted by a Finance Document is in any
way imperilled or in jeopardy;

 
(p)  
Early termination of Charter: the early termination of any Charter where no
alternative employment for the relevant Vessel is found within 30 days of such
termination;

 
(q)  
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 or variance from such standard is sought or granted under
Section 412 of the Code or Section 302 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, a contribution required to be made with respect to a
Plan or a Foreign Pension Plan is not timely made, the Borrower 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

 
 
 
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or 4212 of ERISA or Section 401(a)(29), 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 Borrower, 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, either 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;
 
(r)  
Insurance: any Insurance is not, or ceases to be, maintained in full force and
effect or is unavailable or unobtainable or any of the provisions of paragraphs
(b), (c), (d), (e), (i), (j), (k), (l), (m) or (n) of Clause 14 are not complied
with; or

 
(s)  
Material adverse change:  any event occurs or any other circumstances arise or
develop which might in the reasonable opinion of the Majority Lenders, result in
a material adverse change in the financial condition of any Obligor.

 
19.2  
Notice of Event of Default or acceleration of the Loan. Notice of any Event of
Default and/or acceleration of the Loan shall be given by the Agent to the
Borrower in accordance with Clause 27.

 
19.3  
Other action by Agent. The Agent may, and if so instructed by the Majority
Lenders shall, take any other action which, as a result of the Event of Default
or any notice served under Clause 19.2, any Creditor Party is entitled to take
under any Finance Document or any applicable law.

 
19.4  
Other action by Security Trustee. The Security Trustee may, and if so instructed
by the Majority Lenders shall, take any other action which, as a result of the
Event of Default or any notice served under Clause 19.2, any Creditor Party is
entitled to take under any Finance Document or any applicable law.

 
19.5  
Termination of Commitments. On the service of a notice under Clause 19.2, the
Commitments and all other obligations of each Lender to the Obligors under this
Agreement shall terminate.

 
19.6  
Acceleration of Loan. On the service of a notice under Clause 19.2, the Loans,
all accrued interest and all other amounts accrued or owing from the Obligors or
any other Obligor under this Agreement and every other Finance Document shall
become immediately due and payable, or, as the case may be, payable on demand.

 
19.7  
Delay in exercise of rights. In no event shall any delay in exercising any
Creditor Party’s right to require advance repayment be interpreted as a waiver
of this right.

 
19.8  
Lenders’ rights unimpaired.  Nothing in this Clause 19 shall be taken to impair
or restrict the exercise of any right given to individual Lenders under a
Finance Document or the general law; and, in particular, this Clause 19 is
without prejudice to Clause 1.6 (a).

 
19.9  
Exclusion of Creditor Party liability. No Creditor Party, and no receiver or
manager appointed by the Security Trustee, shall have any liability to the
Borrower or any Obligor:

 
(a)  
for any loss caused by an exercise of rights under, or enforcement of a Security
Interest created by, a Finance Document or by any failure or delay to exercise
such a right or to enforce such a Security Interest; or

 
 
 
 
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(b)  
as mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in such a
Security Interest or for any reduction (however caused) in the value of such an
asset.

 
19.10  
Interpretation. In Clause 19.1(e) references to an event of default or a
termination event include any event, howsoever described, which is similar to an
event of default in a facility agreement or a termination event in a finance
lease; and in Clause 19.1(f) “petition” includes an application.

 
20  
FEES AND EXPENSES

 
20.1   Arrangement, commitment fees  The Borrower shall pay to the Agent:
 
(a)  
on the date of this Agreement, an arrangement fee of $1,000,000, for
distribution among the Lenders pro rata to their Commitments;

 
(b)  
from the date of this Agreement, quarterly in arrears on each March 31, June 30,
September 30 and December 31, a commitment fee at the rate of 1.35% per annum on
the amount of the Total Commitments which have not been borrowed or terminated,
for distribution among the Lenders pro rata to their Commitments; and

 
(c)  
an agency fee in the amount and at the times agreed in the Fee Letter.

 
20.2  
Costs of negotiation, preparation etc. The Borrower shall pay to the Agent on
its demand the amount of all reasonable expenses incurred by the Agent or the
Security Trustee in connection with:

 
(a)  
the negotiation, preparation, execution or registration of any Finance Document
or any related document or with any transaction contemplated by a Finance
Document or a related document; and

 
(b)  
the registration, filing or discharge of the Finance Documents, including
without limitation in each case the reasonable fees and expenses of legal
advisers and insurance experts of the Agent or the Security Trustee, the cost of
registration and discharge of Security Interests.

 
20.3  
Costs of variations, amendments, enforcement etc. The Borrower shall pay to the
Agent, on the Agent's demand, for the account of the Creditor Party concerned,
the amount of all reasonable expenses incurred by a Creditor Party in connection
with:

 
(a)  
any amendment or supplement to a Finance Document, or any proposal for such an
amendment to be made;

 
(b)  
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party
concerned under or in connection with a Finance Document, or any request for
such a consent or waiver;

 
(c)  
the valuation of any security provided or offered under Clause 16 or any other
matter relating to such security; and

 
(d)  
any step taken by the Lender concerned with a view to the protection, exercise
or enforcement of any right or Security Interest created by a Finance Document
or for any similar purpose;

 
there shall be recoverable under paragraph (d) the full amount of all legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.
 
 
 
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20.4  
Extraordinary management time. The Borrower shall pay to the Agent on its demand
compensation in respect of the reasonable and documented amount of time which
the management of the Agent has spent in connection with a matter covered by
Clause 20.3 and which exceeds the amount of time which would ordinarily be spent
in the performance of the Agent’s routine functions.  Any such compensation
shall be based on such reasonable daily or hourly rates as the Agent may notify
to the Borrower and is in addition to any fee paid or payable to the Agent.

 
20.5  
Documentary taxes. The Borrower shall promptly pay any tax payable on or by
reference to any Finance Document, and shall, on the Agent's demand, fully
indemnify each Creditor Party against any claims, expenses, liabilities and
losses resulting from any failure or delay by the Borrower to pay such a tax.

 
21  
TAXES; EXPENSES AND INDEMNITIES

 
21.1  
Taxes.  All present and/or future taxes, levies and duties whatsoever legally
payable in connection with the Borrower’s repayment and interest payment
liabilities under this Agreement (other than taxes payable by any Creditor Party
on its overall net income) resulting from the signature or performance of this
Agreement or any other Finance Document shall be paid by the Borrower.

 
21.2  
No deductions or withholdings; gross-up.

 
(a)  
All repayments of and payments in respect of principal and interest on the
Loans, interest on late payments, compensation, costs, fees, expenses and
related charges, due in connection with this Agreement or any other Finance
Document shall be made:

 
(i)  
without any form of set-off, cross-claim or condition; and

 
(ii)  
free and clear of any tax deduction except a tax deduction which the Borrower or
any Guarantor is required by law to make;

 
(b)  
if the Borrower or any Guarantor is required by law to make a tax deduction from
any payment:

 
(i)  
the Borrower or such Guarantor shall notify the Agent as soon as it becomes
aware of the requirement;

 
(ii)  
the Borrower or such Guarantor shall pay the tax deducted to the appropriate
taxation authority promptly, and in any event before any fine or penalty arises;
and

 
(iii)  
the amount due in respect of the payment shall be increased by the amount
necessary to ensure that each Creditor Party receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise have received;

 
(c)  
within 1 (one) month after making any tax deduction under Clause 21.2(b) the
Borrower shall deliver to the Agent documentary evidence satisfactory to the
Agent that the tax had been paid to the appropriate taxation authority; and

 
(d)  
in this Clause 21.2 “tax deduction” means any deduction or withholding for or on
account of any present or future tax except tax on a Creditor Party’s overall
net income.

 
21.3  
Indemnities regarding borrowing and repayment of the Loan. The Borrower shall
fully indemnify each Creditor Party in the manner described in Clause 21.6 on
its demand in

 
 
 
 
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respect of all claims, costs, expenses, liabilities and losses which are made or
brought against or incurred by that Creditor Party, or which that Creditor Party
estimates reasonably and with due diligence that it will incur, subject to them
being properly justified by that Creditor Party, as a result of or in connection
with:
 
(a)  
any Drawing not being borrowed on the date specified in the relevant Drawdown
Notice for any reason other than a default by the Lender claiming the indemnity;

 
(b)  
the receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant period;

 
(c)  
any failure (for whatever reason) by the Borrower to make payment of any amount
due under a Finance Document on the due date or, if so payable, on demand (after
giving credit for any default interest paid on the amount concerned under Clause
8);

 
(d)  
the occurrence and/or continuance of an Event of Default and/or the acceleration
of repayment of the Loan under Clause 19; and

 
(e)  
any tax (other than tax on its overall net income) for which a Creditor Party is
liable in connection with any amount paid or payable to that Creditor Party
(whether for its own account or otherwise) under any Finance Document.

 
21.4  
Breakage costs. Without limiting its generality, Clause 21.3 covers any claim,
cost, liability, expense or loss incurred by a Lender in liquidating or
employing deposits from third parties acquired or arranged to fund or maintain
all or any part of the Loan and/or any overdue amount (or an aggregate amount
which includes the Drawings or any overdue amount).

 
21.5  
Currency indemnity. Dollars shall be the currency of account and of payment of
all amounts due hereunder in all events. If any payment is made or received by a
Creditor Party, including pursuant to any judgment or order rendered by a
competent court or tribunal, in a currency other than Dollars or at a location
other than that stipulated herein for payment and such payment after conversion
into Dollars and/or transfer to the location stipulated herein for payment does
not result in the payment of the amount of Dollars due hereunder, the relevant
Creditor Party shall be entitled to demand immediate payment of, and shall have
a separate cause of action for, such sums as are necessary exactly to compensate
the deficiency and the Borrower shall immediately pay such sums on such demand
by the Agent.

 
21.6  
Miscellaneous indemnities. The Borrower shall fully indemnify each Creditor
Party (including any officers, employees and agents of such Creditor Party) on
its demand in respect of all claims, demands, proceedings, liabilities, taxes
(other than taxes on the relevant Creditor Party’s overall net income), losses
and expenses of every kind which may be made or brought against, or incurred by,
a Creditor Party, in any country, subject to them being properly justified by
the relevant Creditor Party, in relation to:

 
(a)  
any action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Agent, the Security Trustee or any other
Creditor Party (or any of their respective representatives) under a Finance
Document; and

 
(b)  
any other event, matter or question which occurs or arises at any time during
the term of this Agreement and which has any connection with, or any bearing on,
any Finance Document, any payment or other transaction relating to a Finance
Document or any asset covered (or previously covered) by any security interest
created (or intended to be created) by a Finance Document;

 
without prejudice to its generality, this Clause 21.6 covers any claims,
expenses, liabilities and losses which arise, or are asserted, under or in
connection with any law relating to safety at sea, the ISM Code, the ISPS Code
or any Environmental Law.
 
 
 
 
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22  
ILLEGALITY, ETC

 
22.1  
Illegality. This Clause 22 applies if a Lender (the “Notifying Lender”) notifies
the Agent that it has become, or will with effect from a specified date, become:

 
(a)  
unlawful or prohibited as a result of the introduction of a new law, an
amendment to an existing law or a change in the manner in which an existing law
is or will be interpreted or applied; or

 
(b)  
contrary to, or inconsistent with, any regulation;

 
for the Notifying Lender to maintain or give effect to any of its obligations
under this Agreement in the manner contemplated by this Agreement.

22.2  
Notification of illegality. The Agent shall promptly notify the Obligors, the
Security Trustee and the other Lenders of the notice under Clause 22.1 which the
Agent receives from the Notifying Lender.

 
22.3  
Prepayment; termination of Commitment. On the Agent notifying the Borrower under
Clause 22.2, the Notifying Lender's Commitment shall terminate; and thereupon
or, if later, on the date specified in the Notifying Lender's notice under
Clause 22.1 as the date on which the notified event would become effective the
Borrower shall prepay the Notifying Lender's Contribution in accordance with
Clause 5.

 
22.4  
Mitigation. If circumstances arise which would result in a notification under
Clause 22.1 then, without in any way limiting the rights of the Notifying Lender
under Clause 22.3, the Notifying Lender shall use reasonable endeavours to
transfer its obligations, liabilities and rights under this Agreement and the
Finance Documents to another office or financial institution not affected by the
circumstances but the Notifying Lender shall not be under any obligation to take
any such action if, in its opinion, to do would or might:

 
(a)  
have an adverse effect on its business, operations or financial condition;

 
(b)  
involve it in any activity which is unlawful or prohibited or any activity that
is contrary to, or inconsistent with, any regulation; or

 
(c)  
involve it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.

 
23  
INCREASED COSTS

 
23.1  
Increased costs. This Clause 23 applies if a Lender (the “Notifying Lender”)
notifies the Agent that the Notifying Lender considers that as a result of:

 
(a)  
the introduction or alteration after the date of this Agreement of a law or an
alteration after the date of this Agreement in the manner in which a law is
interpreted or applied (disregarding any effect which relates to the application
to payments under this Agreement of a tax on the Lender's overall net income);
or

 
(b)  
complying with any regulation (including any which relates to capital adequacy
or liquidity controls or which affects the manner in which the Notifying Lender
allocates capital resources to its obligations under this Agreement) which is
introduced, or altered, or the interpretation or application of which is
altered, after the date of this Agreement;

 
the Notifying Lender (or a parent company of it) has incurred or will incur an
“increased cost”.
 
 
 
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23.2  
Meaning of “increased costs”. In this Clause 23, “increased costs” means, in
relation to a Notifying Lender:

 
(a)  
an additional or increased cost incurred as a result of, or in connection with,
the Notifying Lender having entered into, or being a party to, this Agreement or
having taken an assignment of rights under this Agreement, of funding or
maintaining its Commitment or Contribution or performing its obligations under
this Agreement, or of having outstanding all or any part of its Contribution or
other unpaid sums;

 
(b)  
a reduction in the amount of any payment to the Notifying Lender under this
Agreement or in the effective return which such a payment represents to the
Notifying Lender or on its capital;

 
(c)  
an additional or increased cost of funding all or maintaining all or any of the
advances comprised in a class of advances formed by or including the Notifying
Lender's Contribution or (as the case may require) the proportion of that cost
attributable to the Contribution; or

 
(d)  
a liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Notifying Lender under
this Agreement;

 
but not an item attributable to a change in the rate of tax on the overall net
income of the Notifying Lender (or a parent company of it) or an item covered by
the indemnity for tax in Clause 20.5 or by Clause 21 or an item arising directly
out of the implementation by the applicable authorities having jurisdiction over
the Notifying Lender of the matters set out in the statement of the Basle
Committee on Banking Regulations and Supervisory Practices dated July, 1988 and
entitled “International Convergence of Capital Measurement and Capital
Structures”, to the extent and according to the timetable provided for in the
statement;

for the purposes of this Clause 23.2 the Notifying Lender may in good faith
allocate or spread costs and/or losses among its assets and liabilities (or any
class of its assets and liabilities) on such basis as it considers appropriate.

23.3  
Notification to Borrower of claim for increased costs. The Agent shall promptly
notify the Obligors of the notice which the Agent received from the Notifying
Lender under Clause 23.1.

 
23.4  
Payment of increased costs. The Borrower shall pay to the Agent, on the Agent's
demand, for the account of the Notifying Lender the amounts which the Agent from
time to time notifies the Borrower that the Notifying Lender has specified to be
necessary to compensate the Notifying Lender for the increased cost.

 
23.5  
Notice of prepayment. If the Borrower is not willing to continue to compensate
the Notifying Lender for the increased cost under Clause 23.4, the Borrower may
give the Agent not less than 14 days' notice of its intention to prepay the
Notifying Lender's Contribution at the end of an Interest Period.

 
23.6  
Prepayment; termination of Commitment. A notice under Clause 23.5 shall be
irrevocable; the Agent shall promptly notify the Notifying Lender of the
Borrower's notice of intended prepayment and:

 
(a)  
on the date on which the Agent serves that notice, the Commitment of the
Notifying Lender shall be cancelled; and

 
(b)  
on the date specified in its notice of intended prepayment, the Borrower shall
prepay (without premium or penalty) the Notifying Lender's Contribution,
together with accrued interest thereon at the applicable rate plus the Margin.

 
23.7   Application of prepayment. Clause 5.10 shall apply in relation to the
prepayment.
 
 
 
 
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24  
SET-OFF

 
24.1   Application of credit balances. Following the occurrence and during the
continuation of an Event of Default, each Creditor Party may without prior
notice:
 
(a)  
apply any balance (whether or not then due) which at any time stands to the
credit of any account in the name of any Guarantor at any office in any country
of that Creditor Party in or towards satisfaction of any sum then due from that
Guarantor to that Creditor Party under any of the Finance Documents; and

 
(b)  
for that purpose:

 
(i)  
break, or alter the maturity of, all or any part of a deposit of any Guarantor;

 
(ii)  
convert or translate all or any part of a deposit or other credit balance into
Dollars; and/or

 
(iii)  
enter into any other transaction or make any entry with regard to the credit
balance which the Creditor Party concerned considers appropriate.

 
24.2  
Existing rights unaffected. No Creditor Party shall be obliged to exercise any
of its rights under Clause 24.1; and those rights shall be without prejudice and
in addition to any right of set-off, combination of accounts, charge, lien or
other right or remedy to which a Creditor Party is entitled (whether under the
general law or any document).

 
25  
TRANSFERS AND CHANGES IN LENDING OFFICES

 
25.1  
Transfer by Borrower. Neither the Borrower nor any Guarantor may, without the
consent of the Agent, given on the instructions of all the Lenders transfer any
of its rights, liabilities or obligations under any Finance Document.

 
25.2  
Transfer by a Lender. Subject to Clause 25.7, a Lender (the “Transferor Lender”)
may at any time, without needing the consent of the Borrower or any Obligor,
cause:

 
(a)  
its rights in respect of all or part of its Contribution;

 
(b)  
its obligations in respect of all or part of its Commitment; or

 
(c)  
a combination of (a) and (b);

 
to be (in the case of its rights) transferred to, or (in the case of its
obligations) assumed by, another bank or financial institution (a “Transferee
Lender”) by delivering to the Agent a completed certificate in the form set out
in Schedule 6 with any modifications approved or required by the Agent (a
“Transfer Certificate”) executed by the Transferor Lender and the Transferee
Lender;

however, any rights and obligations of the Transferor Lender in its capacity as
Agent or Security Trustee will have to be dealt with separately in accordance
with the Agency and Security Trust Deed.

25.3  
Transfer Certificate, delivery and notification.  As soon as reasonably
practicable after a Transfer Certificate is delivered to the Agent, it shall
(unless it has reason to believe that the Transfer Certificate may be
defective):

 
(a)  
sign the Transfer Certificate on behalf of itself, the Obligors, the Security
Trustee and each of the other Lenders;

 
 
 
 
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(b)  
on behalf of the Transferee Lender, send to the Borrower and each Obligor
letters or faxes notifying them of the Transfer Certificate and attaching a copy
of it; and

 
(c)  
send to the Transferee Lender copies of the letters or faxes sent under
paragraph (b).

 
25.4  
Effective Date of Transfer Certificate. A Transfer Certificate becomes effective
on the date, if any, specified in the Transfer Certificate as its effective date
provided that it is signed by the Agent under Clause 25.3 on or before that
date.

 
25.5  
No transfer without Transfer Certificate. No assignment or transfer of any right
or obligation of a Lender under any Finance Document is binding on, or effective
in relation to, the Borrower, any Obligor, the Agent or the Security Trustee
unless it is effected, evidenced or perfected by a Transfer Certificate.

 
25.6  
Lender re-organisation; waiver of Transfer Certificate. However, if a Lender
enters into any merger, de-merger or other reorganisation as a result of which
all its rights or obligations vest in a successor, the Agent may, if it sees
fit, by notice to the successor and the Borrower and the Security Trustee waive
the need for the execution and delivery of a Transfer Certificate; and, upon
service of the Agent's notice, the successor shall become a Lender with the same
Commitment and Contribution as were held by the predecessor Lender.

 
25.7  
Effect of Transfer Certificate.  A Transfer Certificate takes effect in
accordance with English law as follows:

 
(a)  
to the extent specified in the Transfer Certificate, all rights and interests
(present, future or contingent) which the Transferor Lender has under or by
virtue of the Finance Documents are assigned to the Transferee Lender
absolutely, free of any defects in the Transferor Lender's title and of any
rights or equities which the Borrower or any Obligor had against the Transferor
Lender;

 
(b)  
the Transferor Lender's Commitment is discharged to the extent specified in the
Transfer Certificate;

 
(c)  
the Transferee Lender becomes a Lender with the Contribution previously held by
the Transferor Lender and a Commitment of an amount specified in the Transfer
Certificate;

 
(d)  
the Transferee Lender becomes bound by all the provisions of the Finance
Documents which are applicable to the Lenders generally, including those about
pro-rata sharing and the exclusion of liability on the part of, and the
indemnification of, the Agent and the Security Trustee and, to the extent that
the Transferee Lender becomes bound by those provisions (other than those
relating to exclusion of liability), the Transferor Lender ceases to be bound by
them;

 
(e)  
any part of the Loan which the Transferee Lender advances after the Transfer
Certificate's effective date ranks in point of priority and security in the same
way as it would have ranked had it been advanced by the transferor, assuming
that any defects in the transferor's title and any rights or equities of the
Borrower or any Obligor against the Transferor Lender had not existed;

 
(f)  
the Transferee Lender becomes entitled to all the rights under the Finance
Documents which are applicable to the Lenders generally, including but not
limited to those relating to the Majority Lenders and those under Clause 7.3 and
Clause 19, and to the extent that the Transferee Lender becomes entitled to such
rights, the Transferor Lender ceases to be entitled to them; and

 
(g)  
in respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document or any misrepresentation made in or in
connection with a Finance Document, the Transferee Lender shall be entitled to
recover damages by reference to the loss incurred by it as a result of the
breach or misrepresentation, irrespective of whether the original Lender would
have incurred a loss of that kind or amount;

 
 
 
 
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the rights and equities of the Borrower or any Obligor referred to above
include, but are not limited to, any right of set off and any other kind of
cross-claim.

25.8  
Maintenance of register of Lenders.  During the Security Period the Agent shall
maintain a register in which it shall record the name, Commitment, Contribution
and administrative details (including the lending office) from time to time of
each Lender holding a Transfer Certificate and the effective date (in accordance
with Clause 23.4) of the Transfer Certificate; and the Agent shall make the
register available for inspection by any Lender, the Security Trustee and the
Borrower during normal banking hours, subject to receiving at least 3 Business
Days prior notice.

 
25.9  
Reliance on register of Lenders.  The entries on that register shall, in the
absence of manifest error, be conclusive in determining the identities of the
Lenders and the amounts of their Commitments and Contributions and the effective
dates of Transfer Certificates and may be relied upon by the Agent and the other
parties to the Finance Documents for all purposes relating to the Finance
Documents.

 
25.10  
Authorisation of Agent to sign Transfer Certificates. The Borrower, the Security
Trustee, and each Lender irrevocably authorises the Agent to sign Transfer
Certificates on its behalf.

 
25.11  
Registration fee. In respect of any Transfer Certificate, the Agent shall be
entitled to recover a registration fee of $3,500 from the Transferor Lender or
(at the Agent's option) the Transferee Lender.

 
25.12  
Sub-participation; subrogation assignment. A Lender may sub-participate all or
any part of its rights and/or obligations under or in connection with the
Finance Documents without the consent of, or any notice to, the Borrower, any
Obligor, the Agent or the Security Trustee; and the Lenders may assign, in any
manner and terms agreed by the Majority Lenders, the Agent and the Security
Trustee, all or any part of those rights to an insurer or surety who has become
subrogated to them.

 
25.13  
Disclosure of information. A Lender may disclose to a potential Transferee
Lender or sub-participant any information which the Lender has received in
relation to the Borrower, any Guarantor, any Obligor or their affairs under or
in connection with any Finance Document, unless the information is clearly of a
confidential nature.

 
25.14  
Change of lending office. A Lender may change its lending office by giving
notice to the Agent and the change shall become effective on the later of:

 
(a)  
the date on which the Agent receives the notice; and

 
(b)  
the date, if any, specified in the notice as the date on which the change will
come into effect.

 
25.15  
Notification.  On receiving such a notice, the Agent shall notify the Borrower
and the Security Trustee; and, until the Agent receives such a notice, it shall
be entitled to assume that a Lender is acting through the lending office of
which the Agent last had notice.

 
25.16  
Replacement of Reference Bank. If any Reference Bank ceases to be a Lender or is
unable on a continuing basis to supply quotations for the purposes of Clause 6
then, unless the Borrower, the Agent and the Majority Lenders otherwise agree,
the Agent, acting on the instructions of the Majority Lenders, and after
consulting the Borrower, shall appoint another bank (whether or not a Lender) to
be a replacement Reference Bank; and, when that appointment comes into effect,
the first-mentioned Reference Bank's appointment shall cease to be effective.

 
 
 
 
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26  
VARIATIONS AND WAIVERS

 
26.1  
Variations, waivers etc. by Majority Lenders. Subject to Clause 26.2, a document
shall be effective to vary, waive, suspend or limit any provision of a Finance
Document, or any Creditor Party's rights or remedies under such a provision or
the general law, only if the document is signed, or specifically agreed to by
fax or telex, by the Borrower, by the Agent on behalf of the Majority Lenders,
by the Agent and the Security Trustee in their own rights, and, if the document
relates to a Finance Document to which an Obligor is a party, by that Obligor.

 
26.2  
Variations, waivers etc. requiring agreement of all Lenders. However, as regards
the following, Clause 26.1 applies as if the words “by the Agent on behalf of
the Majority Lenders” were replaced by the words “by or on behalf of every
Lender”:

 
(a)  
a change in the Margin or in the definition of LIBOR;

 
(b)  
a change to the date for, the amount of, any payment of principal, interest,
fees, or other sum payable under this Agreement;

 
(c)  
a change to any Lender's Commitment;

 
(d)  
an extension of Availability Period;

 
(e)  
a change to the definition of “Majority Lenders” or “Finance Documents”;

 
(f)  
a change to the preamble;

 
(g)  
a change to this Clause 26;

 
(h)  
any release of, or material variation to, a Security Interest, guarantee,
indemnity or subordination arrangement set out in a Finance Document; and

 
(i)  
any other change or matter as regards which this Agreement or another Finance
Document expressly provides that each Lender's consent is required.

 
26.3  
Exclusion of other or implied variations. Except for a document which satisfies
the requirements of Clauses 26.1 and 26.2, no document, and no act, course of
conduct, failure or neglect to act, delay or acquiescence on the part of the
Creditor Parties or any of them (or any person acting on behalf of any of them)
shall result in the Creditor Parties or any of them (or any person acting on
behalf of any of them) being taken to have varied, waived, suspended or limited,
or being precluded (permanently or temporarily) from enforcing, relying on or
exercising:

 
(a)  
a provision of this Agreement or another Finance Document;

 
(b)  
an Event of Default;

 
(c)  
a breach by the Borrower or an Obligor of an obligation under a Finance Document
or the general law; or

 
(d)  
any right or remedy conferred by any Finance Document or by the general law;

 
and there shall not be implied into any Finance Document any term or condition
requiring any such provision to be enforced, or such right or remedy to be
exercised, within a certain or reasonable time.
 
 
 
 
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27  
NOTICES

 
27.1  
General.  Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter, fax or telex; and
references in the Finance Documents to written notices, notices in writing and
notices signed by particular persons shall be construed accordingly.

 
27.2 Addresses for communications.  A notice shall be sent:
 
 
 
(a)  to a Borrower:
c/o Genco Shipping & Trading Limited
299 Park Avenue, 20th Floor,
New York, New York 10171
 
Fax No:+ 1 646 443 8551

 
 
(b)  to a Lender::
At the address below its name in Schedule 1
or (as the case may require) in the relevant Transfer Certificate.

 
 
(c)   to the Agent:
CA-CIB, 9 quai du Président Paul Doumer, 92920
Paris, La Défense Cedex, France,

 
 
Fax: (+33) 1 41 89 29 87

 
 
Attn: Shipping Department

 
 
Copy to: CA-CIB, London Ship Finance Department, Broadwalk House, 5 Appold
Street, London EC2A 2DA,

 
 
Fax: (+44) (0) 20 7214 6689

 
 
Attn: Head of Shipping;

 

    (d)   to the Security Trustee:
CA-CIB, 9 quai du Président Paul Doumer,
92920 Paris, La Défense Cedex, France,
 

 
 
Fax: (+33) 1 41 89 29 87,

 
 
Attn: Shipping Department,

 
 
copy to: CA-CIB, London Ship Finance Department,
Broadwalk House, 5 Appold Street, London EC2A2DA,

 
 
Fax: (+44) (0) 20 7214 6689,

 
 
Attn: Head of Shipping;

 
    (e)   to any Guarantor
c/o Genco Shipping & Trading Limited 299 Park
Avenue, 20th Floor ,New York, New York 10171,
United States
 
Fax No:+ 1646 443 8551

 
 
 
 
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or to such other address as the relevant party may notify the Agent or, if the
relevant party is the Agent or the Security Trustee, the Obligors and the
Lenders.

27.3   Effective date of notices.  Subject to Clauses 27.4 and 27.5:
 
(a)  
a notice which is delivered personally or posted shall be deemed to be served,
and shall take effect, at the time when it is delivered; and

 
(b)  
a notice which is sent by telex or fax shall be deemed to be served, and shall
take effect, 2 hours after its transmission is completed.

 
27.4  
Service outside business hours. However, if under Clause 27.3 a notice would be
deemed to be served:

 
(a)  
on a day which is not a Business Day in the place of receipt; or

 
(b)  
on such a Business Day, but after 5 p.m. local time;

 
the notice shall (subject to Clause 27.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is a Business Day.

27.5  
Illegible notices. Clauses 27.3 and 27.4 do not apply if the recipient of a
notice notifies the sender within 1 hour after the time at which the notice
would otherwise be deemed to be served that the notice has been received in a
form which is illegible in a material respect.

 
27.6  
Valid notices. A notice under or in connection with a Finance Document shall not
be invalid by reason that its contents or the manner of serving it do not comply
with the requirements of this Agreement or, where appropriate, any other Finance
Document under which it is served if:

 
(a)  
the failure to serve it in accordance with the requirements of this Agreement or
other Finance Document, as the case may be, has not caused any party to suffer
any significant loss or prejudice; or

 
(b)  
in the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the correct or
missing particulars should have been.

 
27.7  
English language. Any notice under or in connection with a Finance Document
shall be in English.

 
27.8  
Meaning of “notice”. In this Clause 27, “notice” includes any demand, consent,
authorisation, approval, instruction, waiver or other communication.

 
28  
SUPPLEMENTAL

 
28.1  
Rights cumulative, non-exclusive. The rights and remedies which the Finance
Documents give to each Creditor Party are:

 
(a)  
cumulative;

 
(b)  
may be exercised as often as appears expedient; and

 
(c)  
shall not, unless a Finance Document explicitly and specifically states so, be
taken to exclude or limit any right or remedy conferred by any law.

 
28.2  
Severability of provisions. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect the
validity, enforceability or

 
 
 
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legality of the other provisions of that Finance Document or of the provisions
of any other Finance Document.
 
28.3   Counterparts. A Finance Document may be executed in any number of
counterparts.
 
28.4  
Third party rights. A person who is not a party to this Agreement has no right
under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy
the benefit of any term of this Agreement.

 
28.5  
Effectiveness. This Agreement shall become effective on the date (the “Effective
Date”) on which the Borrower, the Agent and each of the Lenders who are
initially parties hereto shall have signed a counterpart hereof (whether the
same or different counterparts) and shall have delivered the same to the Agent
or, in the case of the Lenders, shall have given to the Agent telephonic
(confirmed in writing), written or facsimile notice (actually received) at such
office that the same has been signed and mailed to it. The Agent will give the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.

 
28.6  
USA PATRIOT Act Notice. Each Lender hereby notifies each Creditor 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 Creditor Party,
which information includes the name of each Creditor Party and other information
that will allow such Lender to identify each Creditor Party in accordance with
the PATRIOT Act, and each Creditor Party agrees to provide such information from
time to time to any Lender.

 
29  
LAW AND JURISDICTION

 
29.1  
English law. This Agreement shall be governed by, and construed in accordance
with, English law.

 
29.2  
Exclusive English jurisdiction. Subject to Clause 29.3, the courts of England
shall have exclusive jurisdiction to settle any disputes which may arise out of
or in connection with this Agreement.

 
29.3  
Choice of forum for the exclusive benefit of Creditor Parties. Clause 29.2 is
for the exclusive benefit of the Creditor Parties, each of which reserves the
rights:

 
(a)  
to commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than England
and which have or claim jurisdiction to that matter; and

 
(b)  
to commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without commencing
proceedings in England;

 
the Borrower shall not commence any proceedings in any country other than
England in relation to a matter which arises out of or in connection with this
Agreement.

29.4  
Process agent. The Borrower and each Guarantor irrevocably appoints WFW Legal
Services Limited at its registered office for the time being, presently at 15
Appold Street, London EC2A 2HB, to act as its agent to receive and accept on its
behalf any process or other document relating to any proceedings in the English
courts which are connected with this Agreement.

 
29.5  
Creditor Party rights unaffected. Nothing in this Clause 29 shall exclude or
limit any right which any Creditor Party may have (whether under the law of any
country, an international convention or otherwise) with regard to the bringing
of proceedings, the service of process, the recognition or enforcement of a
judgment or any similar or related matter in any jurisdiction.

 
 
 
 
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29.6  
Meaning of “proceedings”.  In this Clause 29, “proceedings” means proceedings of
any kind, including an application for a provisional or protective measure.

 

THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.

 
 
 

 

 
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SCHEDULE 1

 
LENDERS AND COMMITMENTS

Lender
Lending
Office
Tranche A
Commitment
Tranche B
Commitment
Tranche C
Commitment
Tranche D
Commitment
Tranche E
Commitment
Crédit Agricole Corporate and Investment Bank
9 quai du Président Paul Doumer
92920 Paris La Défense
France
Paris
6,666,666.68
6,666,666.68
6,666,666.68
6,666,666.68
6,666,666.68
Crédit Industriel et Commercial
520 Madison Avenue, New York, NY 10022
 
New York
6,666,666.66
6,666,666.66
6,666,666.66
6,666,666.66
6,666,666.66
Skandinaviska Enskilda Banken AB (publ)
Kungsträdgårdsgatan 8
SE-106 40 Stockholm
 
Stockholm
6,666,666.66
6,666,666.66
6,666,666.66
6,666,666.66
6,666,666.66

 
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SCHEDULE 2

GUARANTORS

 
(1) Genco Bay Limited,  a company incorporated in the Marshall Islands whose
registered office is at trust company complex, Ajeltake road, Ajeltake island,
P.O. Box 1405, Majuro, Marshall Islands MH96960, Guarantor in respect of  Vessel
A, Genco Bay;
 
(2) Genco Ocean Limited,  a company incorporated in the Marshall Islands whose
registered office is at trust company complex, Ajeltake road, Ajeltake island,
P.O. Box 1405, Majuro, Marshall Islands MH96960, Guarantor in respect of  Vessel
B, Genco Ocean;

(3) Genco Avra Limited,  a company incorporated in the Marshall Islands whose
registered office is at trust company complex, Ajeltake road, Ajeltake island,
P.O. Box 1405, Majuro, Marshall Islands MH96960, Guarantor in respect of  Vessel
C, Genco Avra;
 
(4) Genco Mare Limited,  a company incorporated in the Marshall Islands whose
registered office is at trust company complex, Ajeltake road, Ajeltake island,
P.O. Box 1405, Majuro, Marshall Islands MH96960, Guarantor in respect of  Vessel
D, Genco Mare; and

(5) Genco Spirit Limited,  a company incorporated in the Marshall Islands whose
registered office is at trust company complex, Ajeltake road, Ajeltake island,
P.O. Box 1405, Majuro, Marshall Islands MH96960, Guarantor in respect of  Vessel
E, Genco Spirit.

 
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SCHEDULE 3

FORM OF DRAWDOWN NOTICE
 
 

To: Crédit Agricole Corporate and Investment Bank   9 quai du Président Paul
Doumer   92920 Paris La Défense   France      
Attention:
  Reference:    [•]      cc: [Crédit Agricole Corporate and Investment Bank  
Broadwalk House   5 Appold Street   London EC2A 2DA  
England
      Attention:  
Reference: [•]]
   

[Date]
DRAWDOWN NOTICE
 
1
We refer to the loan agreement (the “Loan Agreement”) dated [l] 2010 and made
between, among others, ourselves as the Borrower, the Guarantors (listed in
Schedule 2 therein), Crédit Agricole Corporate and Investment Bank, Agent and
Security Trustee and the banks and financial institutions listed therein as
Lenders in connection with a loan facility in the maximum amount of US
$100,000,000. Terms defined in the Loan Agreement have their defined meanings
when used in this Drawdown Notice.

 
2
We request to borrow a Drawing as follows:

 
(a)  
Tranche: [l]

 
(b)  
Amount: US$ [l];

 
(c)  
Vessel:  [l];

 
(d)  
Guarantor:  [l]

 
(e)  
Drawdown Date: [l];

 
(f)  
Duration of the first Interest Period shall be [l] months;

 
(g)  
Payment instructions: [l].

 
3
We represent and warrant that:

 
(a)  
the representations and warranties in Clause 11 which are repeated pursuant to
Clause 11.4  of the Loan Agreement would remain true and not misleading if
repeated on the date of this notice with reference to the circumstances now
existing; and

 
(b)  
no Event of Default or Potential Event of Default has occurred or will result
from the borrowing of the Drawing.

 
 
 
 
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4
This notice cannot be revoked.

 

                                                                   
for and on behalf of
Genco Shipping & Trading Limited

 
 

 

 
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SCHEDULE 4

 
CONDITION PRECEDENT DOCUMENTS
 
PART A

The following are the documents referred to in Clause 4.1(a).
 
1  
A duly executed original of each Finance Document (and of each document required
to be delivered by each Finance Document) other than those referred to in Part
B.

 
2  
Copies of the certificate of incorporation and constitutional documents of the
Borrower and each Guarantor.

 
3  
Copies of resolutions of directors of the Borrower and each Guarantor
authorising the execution of each of the Finance Documents to which the Borrower
or that Guarantor is a party and, in the case of the Borrower, authorising named
officers to give the Drawdown Notice and other notices under this Agreement and
ratifying the execution of the MOA.

 
4  
The original of any power of attorney under which any Finance Document is
executed on behalf of the Borrower or a Guarantor.

 
5  
Copies of all consents which the Borrower or any Guarantor requires to enter
into, make any payment under or perform any obligation under, any Transaction
Document.

 
6  
The originals of any mandates or other documents required in connection with the
opening or operation of the Operating Account.

 
7  
Copies of the MOA and of all documents signed or issued by the Borrower or the
Seller (or both of them) under or in connection with it, including, without
limitation, a protocol of delivery and acceptance and a bill of sale.

 
8  
Such documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution by the Seller of the MOA and of
all documents to be executed by the Seller under the MOA.

 
9  
Documentary evidence that the agent for service of process named in Clause 29.4
has accepted its appointment.

 
10  
Favourable legal opinions from lawyers appointed by the Agent on such matters
concerning English law, the laws of the Republic of the Marshall Islands and
such other relevant jurisdictions as the Agent may require.

 
11  
If the Agent so requires, in respect of any of the documents referred to above,
a certified English translation prepared by a translator approved by the Agent.

 
12  
Such documentation and other evidence as is reasonably requested by the Agent or
a Lender in order for each to carry out and be satisfied with the results of all
necessary "know your customer" or other checks which it is required to carry out
in relation to the transactions contemplated by this Agreement and the other
Finance Documents, including without limitation obtaining, verifying and
recording certain information and documentation that will allow the Agent and
each of the Lenders to identify the Borrower in accordance with the requirements
of the PATRIOT Act.

 
13  
Evidence that the fees, costs and expenses then due from the Borrower pursuant
to Clause 20 have been paid or will be paid by the relevant Drawdown Date.

 
 

 
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PART B

The following are the documents referred to in Clause 4.1(b).

1  
A duly executed original of the Mortgage and Notices of Assignment in respect of
the Charter and the Insurances relating to the Vessel which is being mortgaged
on the Drawdown Date.

 
2  
Documentary evidence that:

 
(a)  
the Vessel which is being acquired on such Drawdown Date has been
unconditionally delivered by the Seller to, and accepted by, the relevant
Guarantor under the related MOA, and the full purchase price payable under that
MOA (in addition to the part to be financed by the Loan) has been duly paid and
that title to that Vessel shall have been duly, validly and effectively conveyed
and transferred by the related Seller to the relevant Guarantor, and on the
Drawdown Date such title of such Guarantor in the Vessel shall be free and clear
of all liens, charges, encumbrances and claims of any nature other than liens
permitted by the Mortgage over that Vessel;

 
(b)  
the Vessel being acquired on such Drawdown Date is definitively and permanently
registered in the name of the relevant Guarantor as owner thereof under the
Liberian flag at the Port of Monrovia (or under such other flag as the Agent
acting upon the direction of the Lenders may consent to), free and clear of all
liens, charges, encumbrances and claims of any nature other than liens permitted
by the Mortgage over that Vessel, all in accordance with the laws and
regulations of the Republic of Liberia (or, if applicable, the laws and
regulation of such other flag state as the Agent acting upon the direction of
the Lenders may consent to);

 
(c)  
intentionally omitted;

 
(d)  
the Agent shall have received (i) evidence that the Vessel being acquired on
such Drawdown Date is in class with, and has the highest classification of, an
internationally recognized classification society acceptable to the Lenders, for
vessels of the same size, age and type, with no outstanding recommendations or
notices other than as approved by the Agent, and (ii) certificates evidencing
that each of the Vessel’s surveys are current and that their respective trading
certificates have not expired;

 
(e)  
the Mortgage over the Vessel being acquired on such Drawdown Date has been duly
recorded against the Vessel as a valid first preferred mortgage in accordance
with the laws of the Republic of Liberia (or, if the Vessel is registered in a
jurisdiction other than Liberia as the Agent acting upon the direction of the
Lenders may consent to, in accordance with the laws of such jurisdiction);

 
(f)  
the Vessel is insured in accordance with the provisions of this Agreement and
all requirements therein in respect of insurances have been complied with; and

 
(g)  
the Security Interests created by the General Assignment Deed have attached to
the collateral covered thereby and are legally valid and duly perfected first
priority Security Interests.

 
3  
Documents establishing that the Vessel being mortgaged on the Drawdown Date
will, as from the Drawdown Date, be managed by the Technical Manager and the
Commercial Manager on terms acceptable to the Lenders, together with:

 
(a)  
a letter of undertaking executed by the Technical Manager and the Commercial
Manager in favour of the Agent in the terms required by the Agent agreeing
certain matters in relation to the management of the Vessel and subordinating
the rights of

 
 
 
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the Technical Manager and the Commercial Manager against the Vessel, the
relevant Guarantor and the Borrower to the rights of the Creditor Parties under
the Finance Documents; and
 
 
(b)  
copies of the Technical Manager’s Document of Compliance and of the Vessel’s
Safety Management Certificate (together with any other details of the applicable
safety management system which the Agent requires).

 
4  
The Vessel to be mortgaged on the Drawdown Date shall have been chartered by the
relevant Guarantor to the Charterer pursuant to the Charter for the relevant
Vessel and the Agent shall have receive a true and correct copy of the Charter
as in effect on the Drawdown Date, certified by an officer of the Borrower, and
(i) with respect to each Vessel other than Vessel B, a protocol of delivery and
acceptance for the Vessel and (ii) with respect to Vessel A, a novation
agreement, in each case executed by the respective Guarantor and the Charterer
in such form as the Agent may require.

 
5  
Favourable legal opinions from lawyers appointed by the Agent on such matters
concerning the laws of Liberia (or, if the Vessel is registered in a
jurisdiction other than Liberia as the Agent acting upon the direction of the
Lenders may consent to, the laws of such jurisdiction) and the laws of the
Republic of the Marshall Islands and such other relevant jurisdictions as the
Agent may require.

 
6  
A favourable opinion from an independent insurance consultant acceptable to the
Agent on such matters relating to the insurances for the Vessel as the Agent may
require.

 
7  
If the Agent so requires, in respect of any of the documents referred to above,
a certified English translation prepared by a translator approved by the Agent.

 
8  
A valuation of the Vessel to be mortgaged on the relevant Drawdown Date,
addressed to the Agent and the Lenders, setting forth the Appraised Value of the
Vessel, stated to be for the purposes of this Agreement and dated not earlier
than 30 days before the Drawdown Date, from an Approved Appraiser.

 
9  
Each of the documents specified in paragraphs 2, 3, 5 and 7 of Part A and every
other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of
the Borrower.

 
10  
On the Drawdown Date, the aggregate Appraised Value of the Vessels subject to
Mortgages  (including the Vessel mortgaged on such Drawdown Date) shall be at
least 130% of the aggregate amount of all Loans made on or before such Drawdown
Date (determined on a pro forma basis giving effect to such Loan being made). In
the case of calculations involving the Appraised Value of Mortgaged Vessels the
valuations used shall be (i) for the Vessel being mortgaged on the Drawdown
Date, the valuation delivered pursuant to paragraph 8 of this Part B and (ii)
for any other Mortgaged Vessel, the valuations most recently delivered to or
obtained by the Agent pursuant to such paragraph 8 or Clause 16.8 or, at the
Borrower’s option, a new valuation complying with the provisions of Clause 16.3.

 

 

 
78

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

 

 
SCHEDULE 5
 
LOAN REPAYMENT
 
Note: The tables inserted below are to provide an example only of each
amortization schedule to be prepared by the Agent

Part A (Repayment of Tranche A)

Tranche A
Calendar Quarter
Outstanding
Repayment
from Drawdown
0
$20,000,000
$0
1
$19,615,385
$384,615
2
$19,230,770
$384,615
3
$18,846,155
$384,615
4
$18,461,540
$384,615
5
$18,076,925
$384,615
6
$17,692,310
$384,615
7
$17,307,695
$384,615
8
$16,923,080
$384,615
9
$16,538,465
$384,615
10
$16,153,850
$384,615
11
$15,769,235
$384,615
12
$15,384,620
$384,615
13
$15,000,005
$384,615
14
$14,615,390
$384,615
15
$14,230,775
$384,615
16
$13,846,160
$384,615
17
$13,461,545
$384,615
18
$13,076,930
$384,615
19
$12,692,315
$384,615
20
$12,307,700
$384,615
21
$11,923,085
$384,615
22
$11,538,470
$384,615
23
$11,153,855
$384,615
24
$10,769,240
$384,615
25
$10,384,625
$384,615
26
$10,000,010
$384,615
27
$9,615,395
$384,615
28
$0
$9,615,395

 

 

 
79

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

 

Part B (Repayment of Tranche B)

Tranche B
Calendar Quarter
Outstanding
Repayment
from Drawdown
0
$20,000,000
$0
1
$19,615,385
$384,615
2
$19,230,770
$384,615
3
$18,846,155
$384,615
4
$18,461,540
$384,615
5
$18,076,925
$384,615
6
$17,692,310
$384,615
7
$17,307,695
$384,615
8
$16,923,080
$384,615
9
$16,538,465
$384,615
10
$16,153,850
$384,615
11
$15,769,235
$384,615
12
$15,384,620
$384,615
13
$15,000,005
$384,615
14
$14,615,390
$384,615
15
$14,230,775
$384,615
16
$13,846,160
$384,615
17
$13,461,545
$384,615
18
$13,076,930
$384,615
19
$12,692,315
$384,615
20
$12,307,700
$384,615
21
$11,923,085
$384,615
22
$11,538,470
$384,615
23
$11,153,855
$384,615
24
$10,769,240
$384,615
25
$10,384,625
$384,615
26
$10,000,010
$384,615
27
$9,615,395
$384,615
28
$0
$9,615,395

 

 
 
80

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

 

Part C (Repayment of Tranche C)

Tranche C
Calendar Quarter
Outstanding
Repayment
from Drawdown
0
$20,000,000
$0
1
$19,615,385
$384,615
2
$19,230,770
$384,615
3
$18,846,155
$384,615
4
$18,461,540
$384,615
5
$18,076,925
$384,615
6
$17,692,310
$384,615
7
$17,307,695
$384,615
8
$16,923,080
$384,615
9
$16,538,465
$384,615
10
$16,153,850
$384,615
11
$15,769,235
$384,615
12
$15,384,620
$384,615
13
$15,000,005
$384,615
14
$14,615,390
$384,615
15
$14,230,775
$384,615
16
$13,846,160
$384,615
17
$13,461,545
$384,615
18
$13,076,930
$384,615
19
$12,692,315
$384,615
20
$12,307,700
$384,615
21
$11,923,085
$384,615
22
$11,538,470
$384,615
23
$11,153,855
$384,615
24
$10,769,240
$384,615
25
$10,384,625
$384,615
26
$10,000,010
$384,615
27
$9,615,395
$384,615
28
$0
$9,615,395

 

 
 
81

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

 

Part D (Repayment of Tranche D)

Tranche D
Calendar Quarter
Outstanding
Repayment
from Drawdown
0
$20,000,000
$0
1
$19,615,385
$384,615
2
$19,230,770
$384,615
3
$18,846,155
$384,615
4
$18,461,540
$384,615
5
$18,076,925
$384,615
6
$17,692,310
$384,615
7
$17,307,695
$384,615
8
$16,923,080
$384,615
9
$16,538,465
$384,615
10
$16,153,850
$384,615
11
$15,769,235
$384,615
12
$15,384,620
$384,615
13
$15,000,005
$384,615
14
$14,615,390
$384,615
15
$14,230,775
$384,615
16
$13,846,160
$384,615
17
$13,461,545
$384,615
18
$13,076,930
$384,615
19
$12,692,315
$384,615
20
$12,307,700
$384,615
21
$11,923,085
$384,615
22
$11,538,470
$384,615
23
$11,153,855
$384,615
24
$10,769,240
$384,615
25
$10,384,625
$384,615
26
$10,000,010
$384,615
27
$9,615,395
$384,615
28
$0
$9,615,395

 

 

 
82

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

 

Part E (Repayment of Tranche E)

Tranche E
Calendar Quarter
Outstanding
Repayment
from Drawdown
0
$20,000,000
$0
1
$19,615,385
$384,615
2
$19,230,770
$384,615
3
$18,846,155
$384,615
4
$18,461,540
$384,615
5
$18,076,925
$384,615
6
$17,692,310
$384,615
7
$17,307,695
$384,615
8
$16,923,080
$384,615
9
$16,538,465
$384,615
10
$16,153,850
$384,615
11
$15,769,235
$384,615
12
$15,384,620
$384,615
13
$15,000,005
$384,615
14
$14,615,390
$384,615
15
$14,230,775
$384,615
16
$13,846,160
$384,615
17
$13,461,545
$384,615
18
$13,076,930
$384,615
19
$12,692,315
$384,615
20
$12,307,700
$384,615
21
$11,923,085
$384,615
22
$11,538,470
$384,615
23
$11,153,855
$384,615
24
$10,769,240
$384,615
25
$10,384,625
$384,615
26
$10,000,010
$384,615
27
$9,615,395
$384,615
28
$0
$9,615,395

 

 
 
83

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

 

 
SCHEDULE 6
 
TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring
that this Certificate and the transaction to which it relates comply with all
legal and regulatory requirements applicable to them respectively.

To:
[ Name of Agent] for itself and for and on behalf of the Borrower, [each
Obligor], the Security Trustee and each Lender as defined in the Loan Agreement
referred to below.

 
1
This Certificate relates to a Loan Agreement (“the “Agreement”) dated [l] and
made between (1) [l] (the “Borrower”), (2) the banks and financial institutions
named therein as Lenders, (3) the Companies named therein as Guarantors, (4) [l]
as Agent and (5) [l] as Security Trustee for a loan facility of up to
$100,000,000.

 
2  
In this Certificate, terms defined in the Agreement shall, unless the contrary
intention appears, have the same meanings when used in this Certificate and:

 
“Relevant Parties” means the Agent, the Borrower, the Guarantors, the Security
Trustee and each Lender;

“Transferor” means [full name] of [lending office];

“Transferee” means [full name] of [lending office].

3  
The effective date of this Certificate is [l]  Provided that this Certificate
shall not come into effect unless it is signed by the Agent on or before that
date.

 
4  
[The Transferor assigns to the Transferee absolutely all rights and interests
(present, future or contingent) which the Transferor has as Lender under or by
virtue of the Agreement and every other Finance Document in relation to [l] per
cent. of its Contribution, which percentage represents $[l].

 
5  
[By virtue of this Certificate and Clause 25 of the Agreement, the Transferor is
discharged [entirely from its Commitment which amounts to $[l]] [from [l] per
cent. of its Commitment, which percentage represents $[l]] and the Transferee
acquires a Commitment of $[l].]

 
6  
The Transferee undertakes with the Transferor and each of the Relevant Parties
that the Transferee will observe and perform all the obligations under the
Finance Documents which Clause 25 of the Agreement provides will become binding
on it upon this Certificate taking effect.

 
7  
The Agent, at the request of the Transferee (which request is hereby made)
accepts, for the Agent itself and for and on behalf of every other Relevant
Party, this Certificate as a Transfer Certificate taking effect in accordance
with Clause 25 of the Agreement.

 
8      The Transferor:
 
(a)  
warrants to the Transferee and each Relevant Party that:

 
(i)  
the Transferor has full capacity to enter into this transaction and has taken
all corporate action and obtained all consents which are required in connection
with this transaction; and

 
 
 
84

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

 
 
 
(ii)  
this Certificate is valid and binding as regards the Transferor;

 
(b)  
warrants to the Transferee that the Transferor is absolutely entitled, free of
encumbrances, to all the rights and interests covered by the assignment in
paragraph 4; and

 
(c)  
undertakes with the Transferee that the Transferor will, at its own expense,
execute any documents which the Transferee reasonably requests for perfecting in
any relevant jurisdiction the Transferee's title under this Certificate or for a
similar purpose.

 
9      The Transferee:
 
(a)  
confirms that it has received a copy of the Agreement and each of the other
Finance Documents;

 
(b)  
agrees that it will have no rights of recourse on any ground against either the
Transferor, the Agent, the Security Trustee or any Lender in the event that:

 
(i)  
any of the Finance Documents prove to be invalid or ineffective;

 
(ii)  
the Borrower or any Obligor fails to observe or perform its obligations, or to
discharge its liabilities, under any of the Finance Documents;

 
(iii)  
it proves impossible to realise any asset covered by a Security Interest created
by a Finance Document, or the proceeds of such assets are insufficient to
discharge the liabilities of the Borrower or any Obligor under any of the
Finance Documents;

 
(c)  
agrees that it will have no rights of recourse on any ground against the Agent,
the Security Trustee or any Lender in the event that this Certificate proves to
be invalid or ineffective;

 
(d)  
warrants to the Transferor and each Relevant Party that:

 
(i)  
it has full capacity to enter into this transaction and has taken all corporate
action and obtained all consents which it needs to take or obtain in connection
with this transaction; and

 
(ii)  
that this Certificate is valid and binding as regards the Transferee;

 
(e)  
confirms the accuracy of the administrative details set out below regarding the
Transferee.

 
10  
The Transferor and the Transferee each undertake with the Agent and the Security
Trustee severally, on demand, fully to indemnify the Agent and/or the Security
Trustee in respect of any claim, proceeding, liability or expense (including all
legal expenses) which they or either of them may incur in connection with this
Certificate or any matter arising out of it, except such as are shown to have
been mainly and directly caused by the gross and culpable negligence or
dishonesty of the Agent's or the Security Trustee's own officers or employees.

 
11  
The Transferee shall repay to the Transferor on demand so much of any sum paid
by the Transferor under paragraph 9 as exceeds one-half of the amount demanded
by the Agent or the Security Trustee in respect of a claim, proceeding,
liability or expense which was not reasonably foreseeable at the date of this
Certificate; but nothing in this paragraph shall affect the liability of each of
the Transferor and the Transferee to the Agent or the Security Trustee for the
full amount demanded by it.

 
 
 
 
85

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

 
 
 

 
 

[Name of Transferor]  [Name of Transferee]     By: By:     Date: Date:     AGENT
     
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
      [Name of Agent]        By:       Date:      

 
 
 
 
 
 

 
 
86

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

 

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person
(Loan Administration Department):

Telephone:

Telex:

Fax:

Contact Person
(Credit Administration Department):

Telephone:

Telex:

Fax:

Account for payments:

Note:
This Transfer Certificate alone may not be sufficient to transfer a
proportionate share of the Transferor's interest in the security constituted by
the Finance Documents in the Transferor's or Transferee's jurisdiction.  It is
the responsibility of each Lender to ascertain whether any other documents are
required for this purpose.

 

 
87

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

 

SCHEDULE 7

 
MANDATORY COSTS
 
1  
The Mandatory Cost is an addition to the interest rate to compensate the Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other authority
which replaces all or any of its functions) or (b) the requirements of the
European Central Bank.

 
2  
On the first day of each Interest Period (or as soon as possible thereafter) the
Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate")
for each Lender in accordance with the paragraphs set out below.  The Mandatory
Cost will be calculated by the Agent as a weighted average of the Lenders'
Additional Cost Rates (weighted in proportion to the percentage participation of
each Lender in the Loan) and will be expressed as a percentage rate per annum.

 
3  
The Additional Cost Rate for any Lender lending from an office in the euro-zone
will be the percentage notified by that Lender to the Agent to be its reasonable
determination of the cost (expressed as a percentage of that Lender's
participation in the Loan) of complying with the minimum reserve requirements of
the European Central Bank as a result of participating in the Loan from that
office.

 
4  
The Additional Cost Rate for any Lender lending from an office in the United
Kingdom will be calculated by the Agent as follows:

 
(a)  
where the Loan is denominated in sterling:

 
BY + S(Y - Z) + F x 0.01 per cent per annum
           100 - (B + S)
 
(b)  
where the Loan is denominated in any currency other than sterling:

 
F x 0.01 per cent per annum
300
 
where:
 
 
B
is the percentage of eligible liabilities (assuming these to be in excess of any
stated minimum) which that Lender is from time to time required to maintain as
an interest free cash ratio deposit with the Bank of England to comply with cash
ratio requirements;

 
 
Y
is the percentage rate of interest (excluding the Margin and the Mandatory Cost
and, if the Loan is an overdue amount, the additional rate of interest specified
in Clause 8 (Default interest)) payable for the relevant Interest Period on the
Loan;

 
 
S
is the percentage (if any) of eligible liabilities which that Lender is required
from time to time to maintain as interest bearing special deposits with the Bank
of England;

 
 
Z
is the interest rate per annum payable by the Bank of England to that Lender on
special deposits; and

 
 
F
is the charge payable by that Lender to the Financial Services Authority under
paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or the
equivalent provisions in any replacement regulations (with, for this purpose,
the figure for the minimum amount in paragraph 2.02b or such equivalent
provision deemed to be zero), expressed in pounds per £1 million of the fee base
of that Lender.

 
 
 
 
88

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

 
 
 
5  
For the purpose of this Schedule:

 
(a)  
"eligible liabilities" and "special deposits" have the meanings given to them at
the time of application of the formula by the Bank of England;

 
(b)  
"fee base" has the meaning given to it in the Fees Regulations;

 
(c)  
"Fees Regulations" means the regulations governing periodic fees contained in
the Financial Services Authority Fees Manual or such other law or regulation as
may be in force from time to time in respect of the payment of fees for the
acceptance of deposits.

 
6  
In the application of the formula B, Y, S and Z are included in the formula as
figures and not as percentages, e.g. if B = 0.5% and Y = 15%, BY is calculated
as 0.5. x 15.  Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.

 
7  
If a Lender does not supply the information required by the Agent to determine
its Additional Cost Rate when requested to do so, the applicable Mandatory Cost
shall be determined on the basis of the information supplied by the remaining
Lenders.

 
8  
If a change in circumstances has rendered, or will render, the formula
inappropriate, the Agent shall notify the Borrower of the manner in which the
Mandatory Cost will subsequently be calculated.  The manner of calculation so
notified by the Agent shall, in the absence of manifest error, be binding on the
Borrower.

 
 
 

 
 
89

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

 

SCHEDULE 8

 
FORM OF MORTGAGE
 
 
 
 
 

 
 

 

 
90

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

 

SCHEDULE 9

 
FORM OF COMPLIANCE CERTIFICATE
 
This Compliance Certificate (this “Certificate”) is delivered to you on behalf
of the Company (as hereinafter defined) pursuant to Clause 12.1(c)(iv) of the
Loan Agreement, dated [ ] (as amended, supplemented, restated or modified from
time to time, the “Loan Agreement”), among Genco Shipping & Trading Limited, a
corporation organized under the laws of the Marshall Islands (the “Company”),
the Guarantors listed on Schedule 2 thereto, the Lenders from time to time party
thereto, and Crédit Agricole Corporate and Investment, as Agent and Security
Trustee. Terms defined in the Loan Agreement and not otherwise defined herein
are used herein as therein defined.
 
1
I am the duly elected, qualified and acting Chief Financial Officer of the
Company.

 
2  
I have reviewed and am familiar with the contents of this Certificate. I am
providing this Certificate solely in my capacity as an officer of the
Company.  The matters set forth herein are true to the best of my knowledge
after diligent inquiry.

 
3  
I have reviewed the terms of the Loan Agreement and the other Finance Documents
and have made or caused to be made under my supervision, a review in reasonable
detail of the transactions and financial condition of the Company during the
accounting period covered by the financial statements attached hereto as ANNEX 1
(the “Financial Statements”).  The Financial Statements have been prepared in
accordance with the requirements of the Loan Agreement.

 
4  
Attached hereto as ANNEX 2 are the computations showing (in reasonable detail)
compliance with the covenants specified therein.  All such computations are true
and correct.

 
5  
On the date hereof, the representations and warranties contained in the Loan
Agreement and in the other Finance Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on the date hereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.

 
6  
[On the date hereof, no Default or Event of Default has occurred and is
continuing.]1

 

 
 
 

 

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

 
1 If any Default or Event of Default exists, include a description thereof,
specifying the nature and extent thereof (in reasonable detail).

 
91

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

 

 

ANNEX I to
Compliance Certificate
 

IN WITNESS WHEREOF, I have executed this Certificate on behalf of the Company
this ____ day of [DATE], 200__.
 

GENCO SHIPPING & TRADING LIMITED
 
 
By______________________

 
 
 
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 
 

 
92

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

 

 

ANNEX 2 to
Compliance Certificate
 

COMPLIANCE WORKSHEET
 

The calculations described herein is as of __________ __, ____ (the “Computation
Date”) and pertains to the period from __________ __, ____ to __________ __,
____ (the “Test Period”).
 
Part A.  Minimum Consolidated Interest Coverage Ratio
 
1
Consolidated Net Income for the Test Period.      $_______________

 
2  
Provisions for taxes based on income for the Test
Period.          $_______________

 
3  
Consolidated interest expense for the Test Period.           $_______________

 
4  
Amortization or write-off of deferred financing costs to the extent deducted in
determining Consolidated Net Income for the Test Period.$_______________

 
5  
Depreciation expense of the Company and its Subsidiaries for the Test Period.
$_______________

 
6  
Amortization expense of the Company and its Subsidiaries for the Test Period.
$_______________

 
7  
Losses on sales of assets (excluding sales in the ordinary course of business)
and other extraordinary losses for the Test Period.$_______________

 
8  
Gains on sales of assets (excluding sales in the ordinary course of business)
and other extraordinary gains for the Test Period.$_______________

 
9  
Consolidated EBITDA (sum of Items 1 through 7 minus Item
8).                                                                                                                     $_______________

 
10  
Consolidated Interest Expense for the four immediately preceding fiscal
quarters.$_______________

 
11  
Consolidated Interest Coverage Ratio (Item 9:/ Item10).      __________:1.00

 
12  
Minimum Consolidated Interest Coverage Ratio on the Computation Date.2.00:1.00

 
 

 
93

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

 

 
Part B.  Maximum Leverage Ratio
 
13  
Average Consolidated Net Indebtedness on the Computation
Date.       $_______________

 
14  
Consolidated EBITDA on the Computation Date.       $_______________

 
15  
Leverage Ratio (Item 13:Item 14) on the Computation Date.      __________:1.00

 
16  
Maximum permitted Leverage Ratio pursuant to Clause 12.2(d) of the Loan
Agreement: 5.50:1.00

 
Part C.  Security Cover
 
17  
Aggregate principal amount of outstanding Loans on the Computation
Date.$_______________

 
18  
Aggregate Appraised Value on the Computation Date.        $_______________

 
19  
Minimum permitted Aggregate Appraised Value (Item 17 multiplied by
1.30).$_______________

 
Part D.  Minimum Consolidated Net Worth

20  
Consolidated Net Worth on the Computation Date, which must be greater than (five
hundred and ninety million and seven hundred and fifty thousand Dollars)
$590,750,000 plus 80% of any future equity offering, as required pursuant to
Clause 12.2(f) of the Loan Agreement.

 
 
 

 
94

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

 

 
EXECUTION PAGE[S]
 
BORROWER
     
SIGNED by
)  /s/ Alice Thomas for and on behalf of  )  Alice Thomas GENCO SHIPPING ) 
Attorney-in-Fact
& TRADING LIMITED
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)
) 
    GUARANTORS       SIGNED by )  /s/ Alice Thomas for and on behalf of )  Alice
Thomas
GENCO BAY LIMITED
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)  Attorney-in-Fact
)
 
 
 
    SIGNED by )  /s/ Alice Thomas for and on behalf of )  Alice Thomas GENCO
OCEAN LIMITED )  Attorney-in-Fact
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)     SIGNED by )  /s/ Alice Thomas for and on behalf of )  Alice Thomas GENCO
AVRA LIMITED )  Attorney-in-Fact
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)     SIGNED by )  /s/ Alice Thomas for and on behalf of )  Alice Thomas GENCO
MARE LIMITED )  Attorney-in-Fact
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)     SIGNED by   )  /s/ Alice Thomas for and on behalf of )  Alice Thomas GENCO
SPIRIT LIMITED )  Attorney-in-Fact
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick 
)     LENDERS       SIGNED by )  /s/ Kofi Owusu Bempah for and on behalf of ) 
KOFI OWUSU BEMPAH  CRÉDIT AGRICOLE )  (Attorney-in-Fact) CORPORATE AND ) 
INVESTMENT BANK ) 
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)        

 
 
95
 
 
 
 

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SIGNED by )  /s/ Kofi Owusu Bempah for and on behalf of )  KOFI OWUSU BEMPAH 
Crédit Industriel    (Attorney-in-Fact) et Commercial      
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)
    SIGNED by )  /s/ Kofi Owusu Bempah for and on behalf of  )  KOFI OWUSU
BEMPAH  Skandinaviska Enskilda )  (Attorney-in-Fact) Banken AB (publ) )   )
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)     AGENT       SIGNED by )  /s/ Kofi Owusu Bempah for and on behalf of  ) 
KOFI OWUSU BEMPAH  CRÉDIT AGRICOLE )  (Attorney-in-Fact) CORPORATE AND )
INVESTMENT BANK )
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick
)     SECURITY TRUSTEE       SIGNED by   )  /s/ Kofi Owusu Bempah for and on
behalf of  )  KOFI OWUSU BEMPAH  CRÉDIT AGRICOLE )  (Attorney-in-Fact) CORPORATE
AND ) INVESTMENT BANK )
in the presence of
Vicky Cox
Trainee EC2V6DN
Orrick 
)    

 
96