Exhibit 10.8

FACILITY AGREEMENT PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF UP TO US$47,500,000

DRY BULK AMERICAS LTD.
and
DRY BULK AUSTRALIA LTD.
as Joint and Several Borrowers,

AND

The Banks and Financial Institutions listed on Schedule I hereto,
as Lenders,

AND

ING BANK N.V.,
London branch,
as Facility Agent and Security Trustee

AND

INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor

 

 

June 20, 2011

SK 02841 0012 1198227 v11

 
 

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TABLE OF CONTENTS

 
 

1.
DEFINITIONS 
 

 
 
1.1
Specific Definitions 
 

 
 
1.2
Computation of Time Periods; Other Definitional Provisions 
 

 
 
1.3
Accounting Terms 
 

 
 
1.4
Certain Matters Regarding Materiality 
 

 
 
2.
REPRESENTATIONS AND WARRANTIES 
 

 
 
2.1
Representations and Warranties 
 

 
 
(a)
Due Organization and Power 
 

 
 
(b)
Authorization and Consents 
 

 
 
(c)
Binding Obligations 
 

 
 
(d)
No Violation 
 

 
 
(e)
Filings; Stamp Taxes 
 

 
 
(f)
Litigation 
 

 
 
(g)
No Default 
 

 
 
(h)
Vessels 
 

 
 
(i)
Insurance 
 

 
 
(j)
Financial Information 
 

 
 
(k)
Tax Returns 
 

 
 
(l)
ERISA 
 

 
 
(m)
Chief Executive Office 
 

 
 
(n)
Foreign Trade Control Regulations 
 

 
 
(o)
Equity Ownership 
 

 
 
(p)
Environmental Matters and Claims 
 

 
 
(q)
Liens 
 

 
 
(r)
Indebtedness 
 

 
 
(s)
Payments Free of Taxes 
 

 
 
(t)
No Proceedings to Dissolve 
 

 
 
(u)
Solvency 
 

 
 
(v)
Compliance with Laws 
 

 
 
(w)
Survival 
 

 
 
3.
THE FACILITY 
 

 
 
3.1
Purposes 
 

 
 
3.2
Making of the Advances 
 

 
 
3.3
Drawdown Notice 
 

 
 
3.4
Effect of Drawdown Notice 
 

 
 
4.
CONDITIONS 
 

 
 
4.1
Conditions Precedent to this Agreement 
 

 
 
(a)
Corporate Authority 
 

 
 
(b)
The Agreement 
 

 
 
 
(d)
The Creditors 
 

 
 
(e)
Fees 
 

 
 
(f)
Environmental Claims 
 

 
 
(g)
Legal Opinions 
 

 
 
(h)
Director's Certificate 
 

 
 
(i)
Shipsales Contract 
 

 
 
(j)
Know Your Customer Requirements 
 

 
 
(k)
Revenue Sharing Agreement 
 

 
 
(l)
Financial Statements 
 

 
 
(m)
Licenses, Consents and Approvals 
 

 
 
(n)
Financing Arrangements of GREEN DALE and ASIAN KING 
 

 
 
4.2
Conditions Precedent to Availability of Tranche 1 
 

 
 
(a)
Vessel Documents 
 

 
 
(b)
Security Documents 
 

 
 
(c)
UCC Filings 
 

 
 
(d)
Vessel Appraisals 
 

 
 
(e)
ISM DOC 
 

 
 
(f)
Vessel Liens 
 

 
 
(g)
Vessel Delivery 
 

 
 
(h)
Registration of the Mortgage 
 

 
 
(i)
Vessel Insurances 
 

 
 
(j)
Insurance Report 
 

 
 
(k)
Legal Opinions 
 

 
 
4.3
Conditions Precedent to Initial Advance under Tranche 2 
 

 
 
(a)
Tranche 1 
 

 
 
(b)
Payments under the Shipsales Contract 
 

 
 
(c)
Security Documents 
 

 
 
(d)
UCC Filings 
 

 
 
(e)
Reserve Deposit 
 

 
 
(f)
Refund Guarantee 
 

 
 
(g)
Legal Opinions 
 

 
 
4.4
Conditions Precedent to Advances subsequent to the Initial Advance under Tranche
2 
 

 
 
(a)
Representations and Warranties True 
 

 
 
(b)
No Default 
 

 
 
(c)
Builder’s Invoice 
 

 
 
4.5
Conditions Precedent to Delivery Advance 
 

 
 
(a)
Vessel Documents 
 

 
 
(b)
Security Documents 
 

 
 
(c)
UCC Filings 
 

 
 
(d)
Vessel Appraisals 
 

 
 
(e)
ISM DOC 
 

 
 
(f)
Vessel Liens 
 

 
 
(g)
Vessel Delivery 
 

 
 
(h)
Registration of the Mortgage 
 

 
 
(i)
Vessel Insurances 
 

 
 
(j)
Insurance Report 
 

 
 
(k)
Legal Opinions 
 

 
 
(l)
Revenue Sharing Agreement 
 

 
 
4.6
Waiver of Conditions Precedent 
 

 
 
(a)
Satisfaction of Conditions 
 

 
 
(b)
Requirements 
 

 
 
(c)
Acknowledgment and Agreement 
 

 
 
4.7
Further Conditions Precedent 
 

 
 
(a)
Drawdown Notice 
 

 
 
(b)
Representations and Warranties True 
 

 
 
(c)
No Default 
 

 
 
(d)
No Material Adverse Effect 
 

 
 
4.8
Breakfunding Costs 
 

 
 
4.9
Satisfaction after Drawdown 
 

 
 
5.
REPAYMENT AND PREPAYMENT 
 

 
 
5.1
Repayment 
 

 
 
5.2
Voluntary Prepayment; No Re-borrowing 
 

 
 
5.3
Mandatory Prepayment; Sale or Loss of Vessel 
 

 
 
5.4
Optional Permanent Reduction of Facility 
 

 
 
5.5
Interest and Cost With Application of Prepayments 
 

 
 
5.6
Borrowers' Obligation Absolute 
 

 
 
6.
INTEREST AND RATE 
 

 
 
6.1
Payment of Interest; Interest Rate 
 

 
 
6.2
Maximum Interest 
 

 
 
7.
PAYMENTS 
 

 
 
7.1
Time and Place of Payments, No Set Off 
 

 
 
7.2
Tax Credits 
 

 
 
7.3
Computations; Banking Days 
 

 
 
8.
EVENTS OF DEFAULT 
 

 
 
8.1
Events of Default 
 

 
 
(a)
Principal Payments 
 

 
 
(b)
Interest and other Payments 
 

 
 
(c)
Representations, etc 
 

 
 
(d)
Impossibility, Illegality 
 

 
 
(e)
Mortgage 
 

 
 
(f)
Certain Covenants 
 

 
 
(g)
Covenants 
 

 
 
(h)
Indebtedness and Other Obligations 
 

 
 
(i)
Bankruptcy 
 

 
 
(j)
Judgments 
 

 
 
(k)
Inability to Pay Debts 
 

 
 
(l)
Termination of Operations; Sale of Assets 
 

 
 
(m)
Change in Financial Position 
 

 
 
(n)
Cross-Default 
 

 
 
(o)
ERISA Events 
 

 
 
(p)
Change of Control 
 

 
 
8.2
Indemnification 
 

 
 
8.3
Application of Moneys 
 

 
 
9.
COVENANTS 
 

 
 
9.1
Affirmative Covenants 
 

 
 
(a)
Performance of Agreements 
 

 
 
(b)
Notice of Default, etc 
 

 
 
(c)
Obtain Consents 
 

 
 
(d)
Financial Information 
 

 
 
(e)
Contingent Liabilities 
 

 
 
(f)
Vessel Covenants 
 

 
 
(g)
Vessel Valuations 
 

 
 
(h)
Corporate Existence 
 

 
 
(i)
Books and Records 
 

 
 
(j)
Taxes and Assessments 
 

 
 
(k)
Inspection 
 

 
 
(l)
Inspection and Survey Reports 
 

 
 
(m)
Compliance with Statutes, Agreements, etc 
 

 
 
(n)
Environmental Matters 
 

 
 
(o)
Insurance 
 

 
 
(p)
Vessel Insurance 
 

 
 
(q)
Vessel Management 
 

 
 
(r)
Brokerage Commissions, etc 
 

 
 
(s)
ISM Code, ISPS Code and MTSA Matters 
 

 
 
(t)
ERISA 
 

 
 
(u)
Evidence of Current COFR 
 

 
 
(v)
Security Documents 
 

 
 
(w)
Drawdown of Advance relating to Tranche 1 
 

 
 
(x)
Interest Rate Agreement Right of First and Last Refusal 
 

 
 
(y)
Pari Passu 
 

 
 
(z)
Listing on NYSE 
 

 
 
(aa)
Change of Ownership 
 

 
 
(bb)
Maintenance of Properties 
 

 
 
(cc)
Reserve Deposit 
 

 
 
9.2
Negative Covenants 
 

 
 
(a)
Liens 
 

 
 
(b)
Third Party Guaranties 
 

 
 
(c)
Liens on Shares of Borrowers 
 

 
 
(d)
Subordination of Inter-Company Indebtedness 
 

 
 
(e)
Transaction with Affiliates 
 

 
 
(f)
Change of Flag, Class, Management or Ownership 
 

 
 
(g)
Chartering 
 

 
 
(h)
Change in Business 
 

 
 
(i)
Sale of Assets 
 

 
 
(j)
Changes in Offices or Names 
 

 
 
(k)
Consolidation and Merger 
 

 
 
(l)
Change Fiscal Year 
 

 
 
(m)
Indebtedness 
 

 
 
(n)
Limitations on Ability to Make Distributions 
 

 
 
(o)
Change of Control 
 

 
 
(p)
No Money Laundering 
 

 
 
(q)
Shipsales Contract and Refund Guarantee 
 

 
 
(r)
Negative Pledge 
 

 
 
9.3
Financial Covenants 
 

 
 
(a)
Consolidated Indebtedness to Consolidated EBITDA Ratio 
 

 
 
(b)
Working Capital 
 

 
 
(c)
Consolidated Tangible Net Worth 
 

 
 
(d)
Consolidated EBITDA to Interest Expense 
 

 
 
9.4
Asset Maintenance 
 

 
 
10.
Grant of Security. 
 

 
 
11.
GUARANTEE 
 

 
 
11.1
The Guarantee 
 

 
 
11.2
Obligations Unconditional 
 

 
 
11.3
Reinstatement 
 

 
 
11.4
Subrogation 
 

 
 
11.5
Remedies 
 

 
 
11.6
Joint, Several and Solidary Liability 
 

 
 
11.7
Continuing Guarantee 
 

 
 
12.
ASSIGNMENT 
 

 
 
12.1
Assignment 
 

 
 
12.2
Register 
 

 
 
13.
ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC 
 

 
 
13.1
Illegality 
 

 
 
13.2
Increased Costs 
 

 
 
13.3
Nonavailability of Funds 
 

 
 
13.4
Market Disruption 
 

 
 
13.5
Notification of Market Disruption 
 

 
 
13.6
Alternative Rate of Interest During Market Disruption 
 

 
 
13.7
Lender's Certificate Conclusive 
 

 
 
13.8
Compensation for Losses 
 

 
 
14.
CURRENCY INDEMNITY 
 

 
 
14.1
Currency Conversion 
 

 
 
14.2
Change in Exchange Rate 
 

 
 
14.3
Additional Debt Due 
 

 
 
14.4
Rate of Exchange 
 

 
 
15.
FEES AND EXPENSES 
 

 
 
15.1
Fees 
 

 
 
15.2
Expenses 
 

 
 
16.
APPLICABLE LAW, JURISDICTION AND WAIVER 
 

 
 
16.1
Applicable Law 
 

 
 
16.2
Jurisdiction 
 

 
 
16.3
WAIVER OF IMMUNITY 
 

 
 
16.4
WAIVER OF JURY TRIAL 
 

 
 
17.
THE AGENTS 
 

 
 
17.1
Appointment of Agents 
 

 
 
17.2
Appointment of Security Trustee 
 

 
 
17.3
Distribution of Payments 
 

 
 
17.4
Holder of Interest in Note 
 

 
 
17.5
No Duty to Examine, Etc 
 

 
 
17.6
Agents as Lenders 
 

 
 
17.7
Acts of the Agents 
 

 
 
(a)
Obligations of the Agents 
 

 
 
(b)
No Duty to Investigate 
 

 
 
(c)
Discretion of the Agents 
 

 
 
(d)
Instructions of Majority Lenders 
 

 
 
17.8
Certain Amendments 
 

 
 
17.9
Assumption re Event of Default 
 

 
 
17.10
Limitations of Liability 
 

 
 
17.11
Indemnification of the Agent and Security Trustee 
 

 
 
17.12
Consultation with Counsel 
 

 
 
17.13
Resignation 
 

 
 
17.14
Representations of Lenders 
 

 
 
17.15
Notification of Event of Default 
 

 
 
17.16
No Agency or Trusteeship if ING only Lender 
 

 
 
18.
NOTICES AND DEMANDS 
 

 
 
18.1
Notices 
 

 
 
19.
MISCELLANEOUS 
 

 
 
19.1
Right of Set-Off 
 

 
 
19.2
Time of Essence 
 

 
 
19.3
Unenforceable, etc., Provisions - Effect 
 

 
 
19.4
References 
 

 
 
19.5
Further Assurances 
 

 
 
19.6
Prior Agreements, Merger 
 

 
 
19.7
Entire Agreement; Amendments 
 

 
 
19.8
Indemnification 
 

 
 
19.9
USA Patriot Act Notice; OFAC and Bank Secrecy Act 
 

 
 
19.10
Counterparts; Electronic Delivery 
 

 
 
19.11
Headings 
 

 

 
 

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TABLE OF CONTENTS
(continued)

SCHEDULES

 
I
The Lenders and the Commitments

II           Approved Ship Brokers
III           Liens
IV           Indebtedness

EXHIBITS

A            Form of Promissory Note
B            Form of Drawdown Notice
C            Form of Compliance Certificate
D            Form of Assignment and Assumption Agreement
E            Form of Earnings and Charterparties Assignment
F            Form of Insurances Assignment
G            Form of Shipsales Contract and Refund Guarantee Assignment
H            Form of Liberian First Preferred Mortgage
I            Form of Panamanian First Priority Naval Mortgage

 
 
 

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SENIOR SECURED TERM LOAN FACILITY AGREEMENT
 
THIS SENIOR SECURED TERM LOAN FACILITY AGREEMENT (the “Agreement”) is made as of
the 20th day of June 2011, by and among (1) DRY BULK AMERICAS LTD., a
corporation organized and existing under the laws of the British Virgin Islands
(“Dry Bulk Americas”) and DRY BULK AUSTRALIA LTD., a corporation organized and
existing under the laws of the British Virgin Islands (“Dry Bulk Australia”), as
joint and several borrowers (the “Borrowers” and each a “Borrower”),
(2) INTERNATIONAL SHIPHOLDING CORPORATION, a corporation organized and existing
under the laws of the State of Delaware, as guarantor (the “Guarantor”), (3) the
banks and financial institutions listed on Schedule I, as lenders (together with
any bank or financial institution which becomes a Lender pursuant to Section 12,
the “Lenders” and each a “Lender”), and (4) ING BANK N.V., London branch
(“ING”), as facility agent for the Lenders (in such capacity including any
successor thereto, the “Facility Agent”) and as security trustee for the Lenders
(in such capacity, the “Security Trustee” and, together with the Facility Agent,
the “Agents”).
 
WITNESSETH THAT:
 
WHEREAS, at the request of the Borrowers, each of the Agents has agreed to serve
in such capacity under the terms of this Agreement and the Lenders have agreed
to provide to the Borrowers, on a joint and several basis, a senior secured term
loan facility in the amount of up to Forty Seven Million Five Hundred Thousand
United States Dollars (US$47,500,000);
 
NOW, THEREFORE, in consideration of the premises set forth above, the covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as set forth below:
 
1. DEFINITIONS
 
1.1 Specific Definitions.  In this Agreement the words and expressions specified
below shall, except where the context otherwise requires, have the meanings
attributed to them below:
 
“Acceptable Accounting Firm”
shall mean PricewaterhouseCoopers LLP, or such other Securities and Exchange
Commission recognized accounting firm as shall be approved by the Facility
Agent, such approval not to be unreasonably withheld;
“Advance(s)”
shall mean the Initial Advance and any other amounts advanced to the Borrowers
pursuant to Section 3.2;
“Affiliate”
shall mean with respect to any Person, any other Person directly or indirectly
controlled by or under common control with such Person.  For the purposes of
this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”) as applied to any Person means
the possession directly or indirectly of the power to direct or cause the
direction of the management and policies of that Person whether through
ownership of voting securities or by contract or otherwise;
“Agents”
shall have the meaning ascribed thereto in the preamble;
“Agreement”
shall mean this Agreement, as the same shall be amended, restated, modified or
supplemented from time to time;
“Applicable Rate”
shall mean any rate of interest applicable to an Advance  from time to time
pursuant to Section 6.1;
“Assignment and Assumption Agreement(s)”
shall mean any Assignment and Assumption Agreement(s) executed pursuant to
Section 12 substantially in the form set out in Exhibit D;
“Assignment Notices”
shall mean (a) the notice with respect to the Earnings and Charterparties
Assignments substantially in the form set out in Exhibit A thereto, (b) the
notice with respect to the Insurances Assignments substantially in the form set
out in Exhibit C thereto, and (c) the notices with respect to the Shipsales
Contract and Refund Guarantee Assignments substantially in the forms set out in
Exhibit A(1) and Exhibit B(1) thereto;
“Assignments”
shall mean the Earnings and Charterparties Assignments, the Insurances
Assignments and the Shipsales Contract and Refund Guarantee Assignment;
“Availability Period”
shall mean, with respect to Tranche 2, the period beginning on the Closing Date
and ending on the date which is the earlier of (i) one hundred fifty (150) days
following the scheduled Delivery Date of the Newbuilding and (ii) the date on
which the Refund Guarantee expires;
“Banking Day(s)”
shall mean any day that is not a Saturday, Sunday or other day on which (a)
banks in New York, New York or London, England are authorized or required by law
to remain closed, or (b) banks are not generally open for dealing in dollar
deposits in the London interbank market;
“Borrowers”
shall have the meaning ascribed thereto in the preamble;
“Builder”
shall mean Tsuneishi Heavy Industries (CEBU) Inc., a Philippines corporation;
“BULK AUSTRALIA”
shall mean that certain 170,578 dwt capesize bulk carrier to be owned by Dry
Bulk Australia, built in 2003 and registered under the laws of Liberia with
Official No. 11789;
“C Transport”
shall mean C Transport Holding Ltd., a corporation incorporated under the laws
of Bermuda and a member of the Livanos Group;
“C Transport Maritime”
shall mean C Transport Maritime S.A.M., a company organized under the laws of
Monaco;
“Change of Control”
shall mean (a) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than the Johnsen Family, that becomes the beneficial
owner (as defined in Rules 13d-3 under the Exchange Act), directly or
indirectly, of more than 30% of the total voting power of the Guarantor or
(b) the Guarantor ceases to own, directly or indirectly, 100% of each of the
Borrowers or (c) the Board of Directors of either of the Borrowers or the
Guarantor ceases to consist of a majority of the directors existing on the date
hereof or directors nominated by at least two-thirds (2/3) of the then existing
directors;
“Classification Society”
shall mean a member of the International Association of Classification Societies
acceptable to the Lenders with whom a Vessel is entered and who conducts
periodic physical surveys and/or inspections of such Vessel;
“Closing Date”
shall mean the day and year first written above;
“Code”
shall mean the Internal Revenue Code of 1986, as amended, and any successor
statute and regulation promulgated thereunder;
“Collateral”
shall mean, all property or other assets, real or personal, tangible or
intangible, whether now owned or hereafter acquired in which the Security
Trustee or any Lender has been granted a security interest pursuant to a
Security Document or this Agreement;
“Commitment(s)”
shall mean in relation to a Lender, the portion of the Facility set out opposite
its name in Schedule I hereto or, as the case may be, in any relevant Assignment
and Assumption Agreement, as changed from time to time pursuant to the terms of
this Agreement;
“Commitment Fee”
shall have the meaning ascribed thereto in Section 15.1;
“Compliance Certificate”
shall mean a certificate certifying the compliance by each of the Security
Parties with all of its covenants contained herein and showing the calculations
thereof in reasonable detail, delivered by the chief financial officer of the
Guarantor to the Facility Agent from time to time pursuant to Section 9.1(d) in
the form set out in Exhibit C or in such other form as the Facility Agent may
agree;
“Consolidated EBITDA”
shall mean, for any period, with respect to the Guarantor and the Subsidiaries,
the sum of (without duplication) (a) Consolidated Net Income; (b) all Interest
Expenses of the Guarantor and the Subsidiaries; (c) income taxes of the
Guarantor and the Subsidiaries; and (d) depreciation and amortization, as well
as other non-cash charges to the extent they have been deducted from income, of
the Guarantor and the Subsidiaries determined on a consolidated basis in
accordance with GAAP for such period; provided that if any Subsidiary is not
wholly-owned by the Guarantor, Consolidated EBITDA shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount equal to (i)
the amount of Consolidated Net Income attributable to such Subsidiary multiplied
by (ii) the percentage ownership interest in the income of such Subsidiary not
owned by the Guarantor on the last day of such period, but adding back other
non-cash charges to the extent they have been deducted from income in accordance
with GAAP;
“Consolidated Indebtedness”
shall mean all Indebtedness of the Guarantor and the Subsidiaries determined on
a consolidated basis in accordance with GAAP;
“Consolidated Net Income”
shall mean, for any period, the consolidated net income of the Guarantor and the
Subsidiaries for such period, as shown on the consolidated financial statements
of the Guarantor and the Subsidiaries delivered in accordance with Section
9.1(d);
“Consolidated Tangible Net Worth”
shall mean, with respect to the Guarantor and the Subsidiaries, at any date for
which a determination is to be made (determined on a consolidated basis without
duplication in accordance with GAAP) (a) the amount of capital stock (including
its outstanding preferred stock); plus (b) the amount of surplus and retained
earnings (or, in the case of a surplus or retained earnings deficit, minus the
amount of such deficit); plus (c) deferred charges to the extent amortized and
acquired contract costs net of accumulated amortization as stated on the then
most recent audited balance sheet of the Guarantor; minus (d) the sum of (i) the
cost of treasury shares and (ii) the book value of all assets that should be
classified as intangibles (without duplication of deductions in respect of items
already deducted in arriving at surplus and retained earnings) but in any event
including goodwill, minority interests, research and development costs,
trademarks, trade names, copyrights, patents and franchises, unamortized debt
discount and expense, all reserves and any write up in the book value of assets
resulting from a revaluation thereof subsequent to December 31, 1996;
“Contract Price”
shall mean, with respect to the Newbuilding, the aggregate of One Billion Eight
Hundred Seven Million Six Hundred Fifty yen (¥1,807,650,000) and Seventeen
Million Seven Hundred Thousand United States Dollars (US$17,700,000);
“Creditors”
shall mean, together, the Agents and the Lenders, each a “Creditor”;
“Default”
shall mean any event that would, with the giving of notice or passage of time,
or both, be an Event of Default;
“Default Rate”
shall mean a rate per annum equal to one and one-half percent (1.50%) over the
Applicable Rate then in effect;
“Delivery Advance”
shall mean, with respect to Tranche 2, the Advance made on the Delivery Date of
the Newbuilding and which corresponds with the final installment due under the
Shipsales Contract;
“Delivery Date”
shall mean the date on which the Newbuilding is delivered to Dry Bulk Americas;
“DOC”
shall mean a document of compliance issued to an Operator in accordance with
rule 13 of the ISM Code;
“Dollars” and the sign “$”
shall mean the legal currency, at any relevant time hereunder, of the United
States of America and, in relation to all payments hereunder, in same day funds
settled through the New York Clearing House Interbank Payments System (or such
other Dollar funds as may be determined by the Facility Agent to be customary
for the settlement in New York City of banking transactions of the type herein
involved);
“Drawdown Date”
shall mean the date, being a Banking Day, upon which the Borrowers have
requested that an Advance be made available to the Borrowers, and such Advance
is made, as provided in Section 3;
“Drawdown Notice”
shall have the meaning ascribed thereto in Section 3.3;
“Dry Bulk Americas”
shall have the meaning ascribed thereto in the preamble;
“Dry Bulk Australia”
shall have the meaning ascribed thereto in the preamble;
“Dry Bulk Cape”
shall mean Dry Bulk Cape Holding Associated Inc., a corporation incorporated
under the laws of Panama and a member of the Livanos Group;
“Earnings and Charterparties Assignment(s)”
shall mean the first priority assignments of earnings, charterparties and
requisition compensation in respect of (i) the earnings of a Vessel from any and
all sources (including requisition compensation) and (ii) any charter or other
contract relating to a Vessel (including the Revenue Sharing Agreement), to be
executed by the Borrowers in favor of the Security Trustee pursuant to
Section 4.2(b)(iii) and Section 4.5(b)(iii), substantially in the form set out
in Exhibit E;
“Environmental Affiliate(s)”
shall mean, with respect to a Security Party, any Person or entity, the
liability of which for Environmental Claims any Security Party may have assumed
by contract or operation of law;
“Environmental Approval(s)”
shall have the meaning ascribed thereto in Section 2.1(p);
“Environmental Claim(s)”
shall have the meaning ascribed thereto in Section 2.1(p);
“Environmental Law(s)”
shall have the meaning ascribed thereto in Section 2.1(p);
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and
any successor statute and regulation promulgated thereunder;
“ERISA Affiliate”
shall mean a trade or business (whether or not incorporated) which is under
common control with the Borrowers, the Guarantor or any Subsidiary within the
meaning of Sections 414(b), (c), (m) or (o) of the Code;
“ERISA Funding Event”
means (i) any failure by any Plan to satisfy the minimum funding standards (for
purposes of Section 412 of the Code or Section 302 of ERISA), whether or not
waived, (ii) the filing pursuant to Section 412 of the Code or Section 303 of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan, (iii)  the failure by any member of the ERISA Group or any
ERISA Affiliate to make any required contribution to a Multiemployer Plan,
(iv) a determination that any Plan is, or is expected to be, in “at risk” status
(within the meaning of Section 430(i) of the Code), (v) the incurrence by any
member of the ERISA Group or any ERISA Affiliate of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or
(vi) a determination that a Multiemployer Plan is, or is expected to be, in
endangered status within the meaning of Section 432 of the Code or Section 305
of ERISA;
“ERISA Group”
shall mean the Borrowers, the Guarantor and each of their subsidiaries;
“ERISA Termination Event”
means (i) the imposition of any lien in favor of the PBGC of any Plan or
Multiemployer Plan, (ii) the receipt by any member of the ERISA Group or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee
to administer any Plan or Multiemployer Plan under Section 4042 of ERISA,
(iii) the receipt by any member of the ERISA Group or any ERISA Affiliate of any
notice that a Multiemployer Plan is in critical status within the meaning of
Section 432 of the Code or Section 305 of ERISA, (iv) the filing of a notice of
intent to terminate a Plan under Section 4041 of ERISA, (v) the imposition of
any liability on any member of the ERISA Group or any ERISA Affiliate in
connection with the termination of any Plan or Multiemployer Plan, (vi) the
occurrence of a “reportable event,” as defined in Section 4043 of ERISA with
respect to any Plan or Multiemployer Plan, or (vii) the occurrence of any other
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan;
“Event(s) of Default”
shall mean any of the events set out in Section 8.1;
“Exchange Act”
shall mean the Securities and Exchange Act of 1934, as amended;
“Facility”
shall mean the facility to be made available by the Lenders to the Borrowers, on
a joint and several basis, pursuant to Section 3 hereof consisting of the
Tranches, in the aggregate principal amount not to exceed Forty Seven Million
Five Hundred Thousand United States Dollars (US$47,500,000);
“Facility Agent”
shall have the meaning ascribed thereto in the preamble;
“Fair Market Value”
shall mean, in respect of each Vessel, the average of two appraisals (measured
in Dollars) on a “willing seller, willing buyer” basis of such Vessel free from
any charterparty or other employment contract from ship brokers listed in
Schedule II or such other independent ship brokers approved by the Majority
Lenders and addressed to the Facility Agent, no such appraisal to be dated more
than thirty (30) days prior to the date on which a determination of Fair Market
Value is required pursuant to this Agreement;
“Fee Letter”
shall mean the fee letter of even date herewith among the Borrowers and the
Facility Agent;
“Final Payment Date”
shall mean that date which is  seven (7) years from the Closing Date;
“Foreign Plan”
means an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is
excluded from coverage under ERISA by Section 4(b)(4) thereof and is maintained
or contributed to by any member of the ERISA Group or for which any member of
the ERISA Group has any liability;
“Foreign Termination Event”
means the occurrence of an event with respect to the funding or maintenance of a
Foreign Plan, that could reasonably be expected to result in an impairment of
the Collateral;
“Foreign Underfunding”
means the excess, if any, of the accrued benefit obligations of a Foreign Plan
(based on those assumptions used to fund that Foreign Plan or, if that Foreign
Plan is unfunded, based on those assumptions used for financial accounting
statement purposes or, if accrued benefit obligations are not calculated for
financial accounting purposes, based on such reasonable assumptions as may be
approved by the independent auditors of the applicable member of the ERISA Group
for these purposes) over the assets of such Foreign Plan;
“GAAP”
shall have the meaning ascribed thereto in Section 1.3;
“Guaranteed Obligations”
shall have the meaning ascribed thereto in Section 11.1;
“Guarantor”
shall have the meaning ascribed thereto in the preamble;
“Indebtedness”
shall mean, with respect to any Person at any date of determination (without
duplication), (i) all indebtedness of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of letters
of credit or other similar instruments (including reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or taking
delivery thereof or the completion of such services, except trade payables,
(v) all obligations on account of principal of such Person as lessee under
capitalized leases, (vi) all indebtedness of other Persons secured by a lien on
any asset of such Person, whether or not such indebtedness is assumed by such
Person; provided that the amount of such indebtedness shall be the lesser of
(a) the fair market value of such asset at such date of determination and
(b) the amount of such indebtedness, and (vii) all indebtedness of other Persons
guaranteed by such Person to the extent guaranteed; the amount of Indebtedness
of any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation, provided that the amount outstanding at any time of any
indebtedness issued with original issue discount is the face amount of such
indebtedness less the remaining unamortized portion of the original issue
discount of such indebtedness at such time as determined in conformity with
GAAP; and provided further that Indebtedness shall not include any liability for
current or deferred federal, state, local or other taxes, or any current trade
payables;
“Indemnitee”
shall have the meaning ascribed thereto in Section 19.8;
“Initial Advance”
shall mean, with respect to Tranche 2, that certain portion of such Tranche to
be advanced at the request of the Borrowers pursuant to Section 3.2 in an amount
equal to the amount that Dry Bulk Americas has paid to the Builder as
pre-delivery installments relating to the Newbuilding which is in excess of
thirty five percent (35%) of the Contract Price for the Newbuilding;
“Initial Payment Date”
shall mean, (i) with respect to Tranche 1, that date which is three (3) months
following the Drawdown Date and (ii) with respect to Tranche 2, the earlier of
that date which is (1) three (3) months following the Delivery Date and (2) the
end of the Availability Period;
“Insurances Assignment(s)”
shall mean the first priority assignments in respect of the insurances over each
of the Vessels, to be executed by the respective Borrower in favor of the
Security Trustee pursuant to Section 4.2(b)(ii) and Section 4.5(b)(ii),
substantially in the form set out in Exhibit F;
“Interest Expense”
shall mean, with respect to the Guarantor and the Subsidiaries, on a
consolidated basis, for any period (without duplication), interest expense,
whether paid or accrued (including the interest component of capitalized
leases), on all Indebtedness of the Guarantor and the Subsidiaries for such
period, net of interest income, all determined in accordance with GAAP;
“Interest Notice”
shall mean a notice from the Borrowers to the Facility Agent specifying the
duration of any relevant Interest Period;
“Interest Period(s)”
shall mean period(s) of three (3) or six (6) months as selected by the
Borrowers, or as otherwise agreed by the Lenders and the Borrowers;
“Interest Rate Agreements”
shall mean any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement entered into among the
Borrowers or the Guarantor with the Swap Bank, which is designed to protect the
Borrowers and the Guarantor against fluctuations in interest rates applicable
under this Agreement, to or under which the Borrowers or the Guarantor is a
party or a beneficiary on the date of this Agreement or becomes a party or a
beneficiary hereafter;
“ISM Code”
shall mean the International Safety Management Code for the Safe Operating of
Ships and for Pollution Prevention constituted pursuant to Resolution A.741(18)
of the International Maritime Organization and incorporated into the Safety of
Life at Sea Convention and includes any amendments or extensions thereto and any
regulation issued pursuant thereto;
“ISPS Code”
shall mean the International Ship and Port Facility Security Code adopted by the
International Maritime Organization at a conference in December, 2002 and
amending the Safety of Life at Sea Convention and includes any amendments or
extensions thereto and any regulation issued pursuant thereto;
“ISSC”
shall mean the International Ship Security Certificate issued pursuant to the
ISPS Code;
“Johnsen Family”
shall mean (i) Niels W. Johnsen, Erik F. Johnsen, Niels M. Johnsen and Erik L.
Johnsen; (ii) the wives and issue of Niels W. Johnsen, Erik F. Johnsen, Niels M.
Johnsen and Erik L. Johnsen; and (iii) any trust for the benefit of, or
controlled by, any of foregoing;
“LIBOR Rate”
shall mean, with respect to any Interest Period for any Advance, the rate per
annum determined by the Facility Agent to be (i) the rate of interest as
displayed on Reuters Screen LIBOR01 (British Bankers’ Association Interest
Settlement Dates) (or such other page as may replace such Reuters Screen LIBOR01
on such system or on any other system of the information vendor for the time
being designated by the British Bankers’ Association to calculate the BBA
Interest Settlement Rate (as defined in the British Bankers’ Association’s
Recommended Terms and Conditions (“BBAIRS” terms) dated August 1985)) as the
rate per annum at which deposits are being quoted to prime banks in Dollars for
the relevant Interest Period at the London Interbank Market as of 11:00 A.M.
London time, on the day that is two Banking Days prior to the first day of such
Interest Period, or (ii) if such rate does not appear on such page or such
service for the purposes of paragraph (i) or the Facility Agent determines that
no rate for the relevant period of time appears on such page or service, the
annual rate of interest rates quoted by the Facility Agent to leading banks in
the London Interbank Market in the ordinary course of business as of 11:00 A.M.
London time, on the day that is two Banking Days prior to the first day of such
Interest Period; provided, however, that if the Facility Agent (after
consultation with the Lenders) determines that the Lenders are not able to
borrow Dollars from leading banks in the London Interbank Market in the ordinary
course of business at published rates, LIBOR shall be determined in accordance
with Section 13.6;
“Livanos Group”
means the group of companies engaged in the shipping industry and directly or
indirectly owned by Ceres Shipping Ltd., a Bermuda corporation;
 
“Mandatory Costs”
shall mean in relation to the Facility or an unpaid sum the rate per annum
notified by any Lender to the Facility Agent to be the cost to that Lender of
compliance with all reserve asset, liquidity or cash margin or similar
requirement of any Federal Reserve Bank, any other central bank or European
Central Bank or the Financial Services Authority or similar institution whose
requirements such Lender complies with;
“Majority Lenders”
at any time shall mean Lenders having aggregate Commitments of more than 66.66%
of the Facility;
“Margin”
shall mean the rate per annum equal to two and one-half percent (2.50%);
“Material Adverse Effect”
shall mean a material adverse effect on the ability of either of the Borrowers
and/or the Guarantor to meet any of their respective obligations with regard to
(i) the Facility and the financing arrangements established in connection
therewith or (ii) any of their respective other obligations that are material to
the Borrowers and the Guarantor considered as a whole;
“Materials of Environmental Concern”
shall have the meaning ascribed thereto in Section 2.1(p);
“Mortgage(s)”
shall mean (i) the first preferred Liberian mortgage on the BULK AUSTRALIA, to
be executed by Dry Bulk Australia in favor of the Security Trustee pursuant to
Section 4.2(b)(i), substantially in the form set out in Exhibit H and (ii) the
first priority Panamanian naval mortgage on the Newbuilding to be executed by
Dry Bulk Americas in favor of the Security Trustee pursuant to Section
4.5(b)(i), substantially in the form set out in Exhibit I;
“MTSA”
shall mean the Maritime & Transportation Security Act, 2002, as amended, inter
alia, by Public Law 107-295;
“Multiemployer Plan”
shall mean, at any time, a “multiemployer plan” as defined in Section 4001(a)(3)
of ERISA to which any member of the ERISA Group or any ERISA Affiliate has any
liability or obligation to contribute or has within any of the six preceding
plan years had any liability or obligation to contribute;
“Newbuilding”
shall mean that certain 58,100 dwt handymax bulk carrier currently being
constructed by the Builder with an expected delivery date in the first quarter
of 2012, given Builder’s Hull No. SC-146, to be named BULK AMERICAS, and to be
registered under the laws of Panama;
“Note”
shall mean the promissory note to be executed by the Borrowers to the order of
the Facility Agent pursuant to Section 4.1(c), to evidence the Facility
substantially in the form set out in Exhibit A;
“Operator”
shall mean the Person who is concerned with the operation of any Vessel and
falls within the definition of “Company” set out in rule 1.1.2 of the ISM Code;
“Payment Dates”
shall mean, with respect to each Tranche, the Initial Payment Date relating to
such Tranche and the dates falling at three (3) month intervals thereafter, the
last of which is the Final Payment Date;
“PBGC”
shall mean the Pension Benefit Guaranty Corporation or any successor entity
thereto;
“Person”
shall mean any individual, sole proprietorship, corporation, partnership
(general or limited), limited liability company, business trust, bank, trust
company, joint venture, association, joint stock company, trust or other
unincorporated organization, whether or not a legal entity, or any government or
agency or political subdivision thereof;
“Plan”
shall mean any employee benefit plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 302 of ERISA, and in respect
to which any member of the ERISA Group or any ERISA Affiliate is (or, if such
plan were terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA;
“Proceeding”
shall have the meaning ascribed thereto in Section 8.1(i);
“Refund Guarantee”
shall mean that certain refund guarantee with respect to the Newbuilding dated
May 21, 2007 given by the Refund Guarantor in favor of Dry Bulk Americas;
“Refund Guarantor”
shall mean Mitsui & Co., Ltd.;
“Required Percentage”
shall mean (i) one hundred thirty five percent (135%) from the Closing Date
until the second anniversary thereof, (ii) one hundred forty percent (140%) from
the second anniversary of the Closing Date until the third anniversary thereof,
(iii) one hundred forty five percent (145%) from the third anniversary of the
Closing Date until the fourth anniversary thereof, (iv) one hundred fifty
percent (150%) from the fourth anniversary of the Closing Date until the sixth
anniversary thereof, and (v) one hundred fifty five percent (155%) from the
sixth anniversary of the Closing Date and at all times thereafter;
“Reserve Deposit”
shall mean that certain deposit maintained by Dry Bulk Australia with the
Facility Agent in an amount of Five Million United States Dollars ($5,000,000)
which shall be used to cover potential foreign exchange risks in connection with
the Shipsales Contract and provided that any amounts on deposit on the Delivery
Date of the Newbuilding shall be available for use by the Borrowers in
connection with the delivery of the Newbuilding;
“Revenue Sharing Agreement”
shall mean that certain revenue sharing agreement, dated March 25, 2011, as may
be amended, restated, supplemented, novated or substituted from time to time,
entered into by and between, inter alia, Dry Bulk Australia, as a member, Dry
Bulk Cape, as the company, and C Transport, as the manager, and to be entered
into by Dry Bulk Americas, pursuant to which, inter alia, the parties thereto
have agreed or will agree to share in the revenues generated by each of the
Vessels and pursuant to which C Transport has been appointed or will be
appointed commercial manager for each of the Vessels, according to the terms and
provisions thereof;
“Security Document(s)”
shall mean the Mortgages, the Assignments and any other documents that may be
executed as security for the Facility and the Borrowers' obligations in
connection therewith;
“Security Party(ies)”
shall mean each of the Borrowers and the Guarantor;
“Security Trustee”
shall have the meaning ascribed thereto in the preamble;
“Shipsales Contract”
shall mean that certain shipsales contract for the sale of the Newbuilding,
dated May 22, 2007, by and between Clio Marine Inc., as seller, and Dry Bulk
Americas, as purchaser;
“Shipsales Contract and Refund Guarantee Assignment”
shall mean the assignment of the Shipsales Contract and Refund Guarantee, to be
executed by Dry Bulk Americas in favor of the Security Trustee pursuant to
Section 4.3(a)(i), substantially in the form set out in Exhibit G;
“SMC”
shall mean the safety management certificate issued in respect of a Vessel in
accordance with rule 13 of the ISM code;
“subsidiary”
shall mean, with respect to any Person, any business entity of which more than
50% of the outstanding voting stock or other equity interest is owned directly
or indirectly by such Person and/or one or more other subsidiaries of such
Person;
“Subsidiary(ies)”
shall mean all of the subsidiaries of the Guarantor;
“Swap Bank”
shall mean ING;
“Taxes”
shall mean any present or future income or other taxes, levies, duties, charges,
fees, deductions or withholdings of any nature now or hereafter imposed, levied,
collected, withheld or assessed by any taxing authority whatsoever, except for
taxes on or measured by the overall net income of each Lender imposed by its
jurisdiction of incorporation or applicable lending office, the United States of
America, the State or City of New York or any governmental subdivision or taxing
authority of any thereof or by any other taxing authority having jurisdiction
over such Lender (unless such jurisdiction is asserted by reason of the
activities of the Borrowers or any of the Subsidiaries);
“Total Loss”
shall have the meaning ascribed thereto in the Mortgages;
“Tranche(s)”
shall mean any, all or any combination, as the context requires, of Tranche 1
and Tranche 2;
“Tranche 1”
shall mean the portion of the Facility attributable to BULK AUSTRALIA to be made
available by the Lenders to the Borrowers in a single Advance, provided, however
that the principal amount of Tranche 1 shall be the lesser of (i) sixty five
percent (65%) of the Fair Market Value of BULK AUSTRALIA on the Closing Date and
(ii) Twenty Four Million One Hundred Ninety Thousand United States Dollars
(US$24,190,000);
“Tranche 2”
shall mean the portion of the Facility attributable to the installment payments
under the Shipsales Contract to be made available by the Lenders to the
Borrowers in multiple Advances, provided, however that the aggregate principal
amount of Tranche 2 shall be the lesser of (i) sixty five percent (65%) of the
final delivered Fair Market Value of the Newbuilding, (ii) sixty five percent
(65%) of the installment payments made pursuant to the Shipsales Contract, and
(iii) Twenty Three Million Three Hundred Ten Thousand United States Dollars
(US$23,310,000);
“Transaction Documents”
shall mean each of this Agreement, the Note and the Security Documents;
“Vessel(s)”
shall mean any, all or any combination, as the context requires, of BULK
AUSTRALIA and the Newbuilding;

 
1.2 Computation of Time Periods; Other Definitional Provisions.  In this
Agreement, the Note and the other Security Documents, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding”; words importing either gender include the other gender; references
to “writing” include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement, the Note or such Security Document,
as applicable; references to agreements and other contractual instruments
(including this Agreement, the Note and the Security Documents) shall be deemed
to include all subsequent amendments, amendments and restatements, supplements,
extensions, replacements and other modifications to such instruments (without,
however, limiting any prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement, the Note or any Security
Document); references to any matter that is “approved” or requires “approval” of
a party shall mean approval given in the sole and absolute discretion of such
party unless otherwise specified.
 
1.3 Accounting Terms.  Unless otherwise specified herein, all accounting terms
used in this Agreement, the Note and in the Security Documents shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Facility Agent or to the
Lenders under this Agreement shall be prepared, in accordance with generally
accepted accounting principles for the United States (“GAAP”), as amended from
time to time including amendments to GAAP made as a result of the conformity of
GAAP to International Financial Reporting Standards, provided, however, that for
purposes of determining the Guarantor’s ratios and covenants set forth in
Section 9.3, GAAP shall be GAAP in effect as at March 31, 2011.
 
1.4 Certain Matters Regarding Materiality.  To the extent that any
representation, warranty, covenant or other undertaking of any of the Security
Parties in this Agreement is qualified by reference to those which are not
reasonably expected to result in a “Material Adverse Effect” or language of
similar import, no inference shall be drawn therefrom that any Agent or Lender
has knowledge or approves of any noncompliance by any of the Security Parties
with any governmental rule.
 
2. REPRESENTATIONS AND WARRANTIES
 
2.1 Representations and Warranties.  In order to induce the Creditors to enter
into this Agreement and to make the Facility available, each Security Party
hereby represents and warrants to the Creditors (which representations and
warranties shall survive the execution and delivery of this Agreement and the
Note and the drawdown of the Facility) that:
 
(a) Due Organization and Power.  Each Security Party is duly incorporated and is
validly existing in good standing under the laws of its jurisdiction of
incorporation, has full power to carry on its business as now being conducted
and to enter into and perform its obligations under this Agreement, the Note and
the Security Documents to which it is a party, and has complied with all
statutory, regulatory and other requirements relative to such business and such
agreements;
 
(b) Authorization and Consents.  All necessary corporate action has been taken
to authorize, and all necessary consents and authorities have been obtained and
remain in full force and effect to permit, each Security Party to enter into and
perform its obligations under this Agreement, the Note and the Security
Documents and, in the case of the Borrowers to borrow, service and repay the
Facility and, as of the date of this Agreement, no further consents or
authorities are necessary for the service and repayment of the Facility or any
part thereof;
 
(c) Binding Obligations.  This Agreement, the Note and the Security Documents
constitute or will, when executed and delivered, constitute the legal, valid and
binding obligations of each Security Party that is a party thereto enforceable
against such Security Party in accordance with their respective terms, except to
the extent that such enforcement may be limited by equitable principles,
principles of public policy or applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting generally the enforcement of
creditors' rights;
 
(d) No Violation.  The execution and delivery of, and the performance of the
provisions of, this Agreement, the Note and those of the Security Documents to
which it is to be a party by each Security Party do not contravene any
applicable law or regulation existing at the date hereof or any contractual
restriction binding on such Security Party or the certificate of incorporation
or by-laws (or equivalent instruments) thereof and that the proceeds of the
Facility shall be used by the Borrowers exclusively for their own account;
 
(e) Filings; Stamp Taxes.  Other than the recording of the Mortgages with the
appropriate authorities for the Republic of Liberia and Panama, as applicable,
and the filing of Uniform Commercial Code Financing Statements with the Recorder
of Deeds in the District of Columbia and the Secretary of State of the State of
Alabama in respect of the Assignments, and the payment and filing or recording
fees consequent thereto, it is not necessary for the legality, validity,
enforceability or admissibility into evidence of this Agreement, the Note or the
Security Documents that any of them or any document relating thereto be
registered, filed, recorded or enrolled with any court or authority in any
relevant jurisdiction or that any stamp, registration or similar Taxes be paid
on or in relation to this Agreement, the Note or any of the Security Documents;
 
(f) Litigation.  No action, suit or proceeding is pending or threatened against
any Security Party before any court, board of arbitration or administrative
agency which could or might have a Material Adverse Effect;
 
(g) No Default.  No Security Party is in default under any material agreement by
which it is bound, or is in default in respect of any material financial
commitment or obligation;
 
(h) Vessels.  Upon delivery of the relevant Vessel to the relevant Borrower,
each of the Vessels:
 
(i)  
will be in the sole and absolute ownership of the relevant Borrower and duly
registered in such Borrower's name under the Liberian or Panamanian flag, as the
case may be, unencumbered, save and except for its Mortgage and as permitted
thereby;

 
(ii)  
will be classed in the highest classification and rating for vessels of the same
age and type with its Classification Society without any material outstanding
recommendations;

 
(iii)  
will be operationally seaworthy and in every way fit for its intended service;
and

 
(iv)  
will be insured in accordance with the provisions of the Mortgage recorded
thereagainst and the requirements thereof in respect of such insurances will
have been complied with;

 
(i) Insurance.  Each of the Security Parties has insured its properties and
assets against such risks and in such amounts as are customary for companies
engaged in similar businesses;
 
(j) Financial Information.  Except as otherwise disclosed in writing to the
Facility Agent on or prior to the date hereof, all financial statements,
information and other data furnished by any Security Party to the Facility Agent
are complete and correct, such financial statements have been prepared in
accordance with GAAP and accurately and fairly present the financial condition
of the parties covered thereby as of the respective dates thereof and the
results of the operations thereof for the period or respective periods covered
by such financial statements, and since the date of the Guarantor's financial
statements most recently delivered to the Facility Agent there has been no
Material Adverse Effect as to any of such parties and none thereof has any
contingent obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate except as disclosed in such
statements, information and data;
 
(k) Tax Returns.  Each Security Party has filed all material tax returns
required to be filed thereby and has paid all taxes payable thereby which have
become due, other than those not yet delinquent or the nonpayment of which would
not have a Material Adverse Effect and except for those taxes being contested in
good faith and by appropriate proceedings or other acts and for which adequate
reserves shall have been set aside on its books;
 
(l) ERISA.   The execution and delivery of this Agreement and the consummation
of the transactions hereunder will not involve any “prohibited transaction” for
purposes of Section 406 of ERISA or Section 4975 of the Code and no condition
exists or event or transaction has occurred in connection with any Plan
maintained or contributed to by (or required to be maintained or contributed to
by) any member of the ERISA Group or any ERISA Affiliate resulting from the
failure of any thereof to comply with ERISA that is reasonably likely to result
in any member of the ERISA Group or any ERISA Affiliate incurring any liability,
fine or penalty which individually or in the aggregate could have a Material
Adverse Effect.  No ERISA Termination Event or Foreign Termination Event has
occurred or could be reasonably expected to occur nor does any ERISA Funding
Event or Foreign Underfunding exist or has occurred or could be reasonably
expected to exist or to occur;
 
(m) Chief Executive Office.  The chief executive office and chief place of
business of each Security Party and the office in which the records relating to
the earnings and other receivables of each Security Party are kept is, and will
continue to be, located at 11 North Water Street, Suite 18290, Mobile, Alabama
36602, USA;
 
(n) Foreign Trade Control Regulations.  To the best knowledge of each of the
Security Parties, none of the transactions contemplated herein will violate the
provisions of any statute, regulation or resolution enacted by the United States
of America, any other nation or group of nations, or the United Nations to
prohibit or limit economic transactions with certain foreign Persons including,
but not limited to, the Comprehensive Iran Sanctions, Accountability and
Divestment Act of 2010 and any of the provisions, without limitation, of the
Foreign Assets Control Regulations of the United States of America (Title 31,
Code of Federal Regulations, Chapter V, Part 500, et seq., as amended);
 
(o) Equity Ownership.  Each of the Borrowers is owned, directly or indirectly,
one hundred percent (100%) by the Guarantor;
 
(p) Environmental Matters and Claims.  (a) Except as heretofore disclosed in
writing to the Facility Agent (i) each of the Borrowers and its Affiliates
(which for purposes of this Section 2.1(p) shall be deemed to include the
Guarantor and its Affiliates) will, when required to operate their business as
then being conducted, be in compliance with all applicable United States federal
and state, local, foreign and international laws, regulations, conventions and
agreements relating to pollution prevention or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, navigable waters, waters of the contiguous zone, ocean waters and
international waters), including, without limitation, laws, regulations,
conventions and agreements relating to (1) emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous materials, oil, hazardous substances, petroleum and
petroleum products and by-products (“Materials of Environmental Concern”), or
(2) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(“Environmental Laws”); (ii) each of the Borrowers and its Affiliates will, when
required, have all permits, licenses, approvals, rulings, variances, exemptions,
clearances, consents or other authorizations required under applicable
Environmental Laws (“Environmental Approvals”) and will, when required, be in
compliance with all Environmental Approvals required to operate their business
as then being conducted; (iii) neither of the Borrowers has nor has any
Affiliate thereof received any notice of any claim, action, cause of action,
investigation or demand by any person, entity, enterprise or government, or any
political subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability for, or a requirement to
incur, material investigator costs, cleanup costs, response and/or remedial
costs (whether incurred by a governmental entity or otherwise), natural
resources damages, property damages, personal injuries, attorneys' fees and
expenses, or fines or penalties, in each case arising out of, based on or
resulting from (1) the presence, or release or threat of release into the
environment, of any Materials of Environmental Concern at any location, whether
or not owned by such person, or (2) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or Environmental
Approval (“Environmental Claim”) (other than Environmental Claims that have been
fully and finally adjudicated or otherwise determined and all fines, penalties
and other costs, if any, payable by the Security Parties in respect thereof have
been paid in full or which are fully covered by insurance (including permitted
deductibles)); and (iv) there are no circumstances that may prevent or interfere
with such full compliance in the future; and (b) except as heretofore disclosed
in writing to the Facility Agent there is no Environmental Claim pending or
threatened against either of the Borrowers or any Affiliate thereof and there
are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or
disposal of any Materials of Environmental Concern, that could form the basis of
any Environmental Claim against such persons the adverse disposition of which
may result in a Material Adverse Effect;
 
(q) Liens.  Other than as disclosed in Schedule III, there are no liens of any
kind on any property owned by any Security Party other than those liens created
pursuant to this Agreement or the Security Documents or permitted thereby;
 
(r) Indebtedness.  Other than as disclosed in Schedule IV, none of the Security
Parties has any Indebtedness;
 
(s) Payments Free of Taxes.  All payments made or to be made by the Security
Parties under or pursuant to this Agreement, the Note and the Security Documents
shall be made free and clear of, and without deduction or withholding for an
account of, any Taxes;
 
(t) No Proceedings to Dissolve.  There are no proceedings or actions pending or
contemplated by any Security Party or, to the best knowledge of any Security
Party, contemplated by any third party, to dissolve or terminate any Security
Party.
 
(u) Solvency.  On the Closing Date, in the case of each of the Security Parties,
(a) the sum of its assets, at a fair valuation, does and will exceed its
liabilities, including, to the extent they are reportable as such in accordance
with GAAP, contingent liabilities, (b) the present fair market salable value of
its assets is not and shall not be less than the amount that will be required to
pay its probable liability on its then existing debts, including, to the extent
they are reportable as such in accordance with GAAP, contingent liabilities, as
they mature, (c) it does not and will not have unreasonably small working
capital with which to continue its business and (d) it has not incurred, does
not intend to incur and does not believe it will incur debts beyond its ability
to pay such debts as they mature;
 
(v) Compliance with Laws.  Each of the Security Parties is in compliance with
all applicable laws, except where any failure to comply with any such applicable
laws would not, alone or in the aggregate, have a Material Adverse Effect; and
 
(w) Survival.  All representations, covenants and warranties made herein and in
any certificate or other document delivered pursuant hereto or in connection
herewith shall survive the making of the Facility and the issuance of the Note.
 
3. THE FACILITY
 
3.1 Purposes.  The Lenders shall make each Tranche available to the Borrowers,
on a joint and several basis, for the purpose of partially financing the
acquisition costs of the BULK AUSTRALIA and providing pre-delivery and
post-delivery financing for the Newbuilding.
 
3.2 Making of the Advances.  Each of the Lenders, relying upon each of the
representations and warranties set out in Section 2, hereby severally and not
jointly agrees with the Borrowers that, subject to and upon the terms of this
Agreement, it will, on the Drawdown Dates, make its portion of the relevant
Advance, in Federal or other funds, immediately available in London to the
Facility Agent at its address set forth on Schedule I or to such account of the
Facility Agent most recently designated by it for such purpose by notice to the
Lenders.  Unless the Facility Agent determines that any applicable condition
specified in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 or 4.7 has not been
satisfied, the Facility Agent will make the funds so received from the Lenders
available to the Borrowers at their address set forth in Section 18 or as
otherwise directed by the Borrowers, subject to the receipt of the funds by the
Facility Agent as provided in the immediately preceding sentence, on the
Drawdown Dates, and in any event as soon as practicable after receipt.
 
3.3 Drawdown Notice.  The Borrowers shall, at least five (5) Banking Days (or
fewer Banking Days if agreed by the Lenders) before a Drawdown Date serve a
notice (a “Drawdown Notice”), substantially in the form of Exhibit B, on the
Facility Agent, which notice shall (a) be in writing addressed to the Facility
Agent, (b) be effective on receipt by the Facility Agent, (c) specify the amount
of the Facility to be drawn, (d) specify the Tranche to which such Advance
relates, (e) specify the Banking Day on which the Facility is to be drawn, (f) 
specify the disbursement instructions and, with respect to an Advance of Tranche
2, relevant installment under the Shipsales Contract (which shall be consistent
in all material respects with Article 2 of the Shipsales Contract), (g) specify
the initial Interest Period and (h) be irrevocable.
 
3.4 Effect of Drawdown Notice.  Delivery of a Drawdown Notice shall be deemed to
constitute a warranty by each of the Borrowers (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
on and as of the date of the Drawdown Notice and will be true and correct on and
as of the Drawdown Date as if made on such date, and (b) that no Event of
Default nor any event which with the giving of notice or lapse of time or both
would constitute an Event of Default has occurred and is continuing.
 
4. CONDITIONS
 
4.1 Conditions Precedent to this Agreement.  The obligation of the Lenders to
make the Facility available to the Borrowers under this Agreement shall be
expressly subject to the following conditions precedent:
 
(a) Corporate Authority.  The Facility Agent shall have received the following
documents in form and substance satisfactory to the Facility Agent and its legal
advisers:
 
(i)  
copies, certified as true and complete by an officer or director of each of the
Security Parties, of the resolutions of its board of directors and, with respect
to the Borrowers, ultimate shareholders evidencing approval of the Transaction
Documents to which each is a party and authorizing an appropriate officer or
officers or director or directors or attorney-in-fact or attorneys-in-fact to
execute the same on its behalf, including the execution of the Drawdown
Notice(s);

 
(ii)  
copies, certified as true and complete by an officer or director of each of the
Security Parties, of the certificate or articles of incorporation and by-laws or
similar constituent document thereof;

 
(iii)  
copies, certified as true and complete by an officer or director of each of the
Security Parties, of the names and true signatures of the officers or directors
or attorneys-in-fact of such Security Parties authorized to sign each
Transaction Document to which it is or is to be a party and the other documents
to be delivered hereunder and thereunder;

 
(iv)  
certificate of the jurisdiction of incorporation of each Security Party as to
the good standing thereof; and

 
(v)  
a certificate signed by a director or the Chairman, President, Executive Vice
President, Vice President, Treasurer, Comptroller, Controller or Chief Financial
Officer of each of the Security Parties to the effect that (A) no Default or
Event of Default shall have occurred and be continuing and (B) the
representations and warranties of such Security Party contained in this
Agreement are true and correct as of the date of such certificate.

 
(b) The Agreement.  Each of the Security Parties shall have duly executed and
delivered this Agreement to the Facility Agent.
 
(c) The Note.  Each of the Borrowers shall have duly executed and delivered the
Note to the Facility Agent.
 
(d) The Creditors.  The Facility Agent shall have received executed counterparts
of this Agreement from each of the Lenders.
 
(e) Fees.  The Creditors shall have received payment in full of all fees and
expenses due to each thereof pursuant to the terms hereof on the date when due
including, without limitation, all fees and expenses due under Section 15.
 
(f) Environmental Claims.  The Lenders shall be satisfied that none of the
Security Parties is subject to any Environmental Claim which could reasonably be
expected to have a Material Adverse Effect.
 
(g) Legal Opinions.  The Facility Agent, on behalf of the Agents and the
Lenders, shall have received opinions addressed to the Facility Agent from
(i) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., special
counsel to the Security Parties, (ii) Seward & Kissel LLP, special counsel to
the Agents and the Lenders and (iii) Appleby, special British Virgin Islands
counsel to the Agents and Lenders, in each case in such form as the Facility
Agent may require, as well as such other legal opinions as the Lenders shall
have required as to all or any matters under the laws of the State of Delaware,
the State of New York, the United States of America, and the British Virgin
Islands covering certain of the representations and warranties and conditions
which are the subjects of Sections 2 and 4, respectively.
 
(h) Director's Certificate.  The Facility Agent shall have received a
certificate signed by a director of each of the Borrowers certifying that under
applicable law existing on the date hereof, the Borrowers shall not be compelled
by law to withhold or deduct any Taxes from any amounts to become payable to the
Facility Agent for the account of the Creditors hereunder.
 
(i) Shipsales Contract.  The Borrowers shall have delivered to the Facility
Agent a true and complete copy of the Shipsales Contract.
 
(j) Know Your Customer Requirements.  The Facility Agent shall have received
documentation, and other evidence as is reasonably requested by the Facility
Agent in order for each of the Lenders to carry out and be satisfied with the
results of all necessary “know your client” or other checks which is required to
carry out in relation to the transactions contemplated by this Agreement, the
Notes and the Security Documents, including but not limited to:
 
(i)  
completed bank account opening mandates including a list of all account holders
authorized signatories and specimens of their signatures;

 
(ii)  
certified list of directors, including titles, business and residential
addresses and dates of birth;

 
(iii)  
certified true copy of photo identification (i.e. passport or driving license)
and evidence of residential address (i.e. utility bill or bank statement) for
all authorized signatories;

 
(iv)  
completed form 4-329 for each account signatory;

 
(v)  
with respect to each Borrower, certificate of ultimate beneficial ownership,
certified by the Chairman, President or Chief Financial Officer of the
Guarantor; and

 
(vi)  
non-resident declaration forms, if applicable.

 
(k) Revenue Sharing Agreement.  Dry Bulk Australia shall have delivered to the
Facility Agent a true and complete copy of the Revenue Sharing Agreement.
 
(l) Financial Statements.  Each of the Security Parties shall deliver to the
Facility Agent consolidated financial statements for the period ending December
31, 2010.
 
(m) Licenses, Consents and Approvals.  The Facility Agent shall have received
satisfactory evidence that all necessary licenses, consents and approvals in
connection with the transactions contemplated by this Agreement, the Note, the
Security Document and any Interest Rate Agreement have been obtained.
 
(n) Financing Arrangements of GREEN DALE and ASIAN KING.  The Facility Agent
shall have received evidence, certified as true and complete, of the financing
arrangements pertaining to the GREEN DALE, to be owned by Waterman Steamship
Corporation and registered under the laws of the United States of America with
Official No. 1086206, and the ASIAN KING, to be owned by LCI Shipholding Inc.
and registered under the laws of Panama with Patente Regulamentaria de
Navigacion Registration No. 27684-PEXT-2, and such financing arrangements shall
be satisfactory to the Facility Agent, in its sole discretion.
 
4.2 Conditions Precedent to Availability of Tranche 1.  The obligation of the
Lenders to make Tranche 1 available to the Borrowers under this Agreement shall
be expressly subject to the following conditions precedent:
 
(a) Vessel Documents.  The Facility Agent shall have received evidence
satisfactory to it and its counsel that the BULK AUSTRALIA is:
 
(i)  
in the sole and absolute ownership of Dry Bulk Australia and duly registered in
Dry Bulk Australia’s name under the Liberian flag free of all liens and
encumbrances of record other than its Mortgage;

 
(ii)  
insured in accordance with the provisions of the relevant Mortgage and all
requirements of the relevant Mortgage in respect of such insurance have been
fulfilled (including, but not limited to, letters of undertaking from the
insurance brokers, including confirmation notices of assignment, notices of
cancellation and loss payable clauses acceptable to the Lenders);

 
(iii)  
classed in the highest classification and rating for vessels of the same age and
type with its Classification Society without any material outstanding
recommendations; and

 
(iv)  
operationally seaworthy and in every way fit for its intended service;

 
(b) Security Documents.  Dry Bulk Australia shall have executed and delivered to
the Facility Agent:
 
(i)  
the Mortgage over the BULK AUSTRALIA;

 
(ii)  
the Insurances Assignment for the BULK AUSTRALIA;

 
(iii)  
the Earnings and Charterparties Assignment for the BULK AUSTRALIA; and

 
(iv)  
the Assignment Notices with respect to (ii) and (iii) above.

 
(c) UCC Filings.  The Facility Agent shall have received evidence that Uniform
Commercial Code Financing Statements have been filed in the District of Columbia
and the State of Alabama and in such other jurisdictions as the Facility Agent
may reasonably require.
 
(d) Vessel Appraisals.  The Facility Agent shall have received appraisals, in
form and substance satisfactory to the Facility Agent, as to the Fair Market
Value of the BULK AUSTRALIA.
 
(e) ISM DOC.  To the extent required to be obtained by the ISM Code, the
Security Trustee shall have received a copy of the DOC for the BULK AUSTRALIA.
 
(f) Vessel Liens.  The Facility Agent shall have received evidence satisfactory
to it and to its legal advisor that, save for the liens created by the relevant
Mortgage and the relevant Assignments, there are no liens, charges or
encumbrances of any kind whatsoever on the BULK AUSTRALIA or on its earnings
except as permitted hereby or by any of the Security Documents.
 
(g) Vessel Delivery.  The Facility Agent shall be satisfied that satisfactory
arrangements have been made for (x) the registration of the BULK AUSTRALIA in
the name of Dry Bulk Australia under the Liberian flag, (y) the execution of its
Mortgage and (z) the recordation of its Mortgage with the appropriate
authorities in the Republic of Liberia.
 
(h) Registration of the Mortgage.  The Facility Agent shall have received
satisfactory evidence that the Mortgage on the BULK AUSTRALIA has been duly
registered under the laws of the Republic of Liberia and constitutes a first
priority mortgage lien under the laws of such jurisdiction and a foreign
“preferred mortgage” under Chapter 313 of Title 46 of the United States Code (46
U.S.C. §§ 31301 et seq.).
 
(i) Vessel Insurances.  The Facility Agent shall have received any evidence the
Facility Agent shall reasonably require that the BULK AUSTRALIA is insured in
accordance with its Mortgage and that all requirements in respect of such
insurances have been complied with.
 
(j) Insurance Report.  The Facility Agent shall have received a detailed report
from a firm of independent marine insurance brokers appointed by the Facility
Agent in respect of the insurances on the BULK AUSTRALIA, in form and substance
satisfactory to the Facility Agent, the cost of which will be for the account of
the Borrowers.
 
(k) Legal Opinions.  The Facility Agent, on behalf of the Agents and the
Lenders, shall have received opinions addressed to the Facility Agent from
(i) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., special
counsel to the Security Parties, (ii) Seward & Kissel LLP, special counsel to
the Agents and the Lenders and (iii) Appleby, special British Virgin Islands
counsel to the Agents and Lenders, in each case in such form as the Facility
Agent may require, as well as such other legal opinions as the Lenders shall
have required as to all or any matters under the laws of the State of Delaware,
the State of New York, the United States of America, the British Virgin Islands
and the Republic of Liberia covering certain of the representations and
warranties and conditions which are the subjects of Sections 2 and 4,
respectively.
 
4.3 Conditions Precedent to Initial Advance under Tranche 2.  The obligation of
the Lenders to make the Initial Advance under Tranche 2 available to the
Borrowers under this Agreement shall be expressly subject to the following
conditions precedent:
 
(a) Tranche 1.  All of the conditions precedent set forth in Sections 4.1 and
4.2 shall have been met.
 
(b) Payments under the Shipsales Contract.  The Borrowers shall have delivered
to the Facility Agent evidence satisfactory to the Facility Agent that the
Borrowers have paid thirty five percent (35%) of the Contract Price for the
Newbuilding.
 
(c) Security Documents.  Dry Bulk Americas shall have executed and delivered to
the Facility Agent:
 
(i)  
the Shipsales Contract and Refund Guarantee Assignment relating to the
Newbuilding; and

 
(ii)  
the Assignment Notice and the acknowledgement thereof in respect of (i) above.

 
(d) UCC Filings.  The Facility Agent shall have received evidence that Uniform
Commercial Code Financing Statements have been filed in the District of Columbia
and the State of Alabama and in such other jurisdictions as the Facility Agent
may reasonably require.
 
(e) Reserve Deposit.  Dry Bulk Australia shall have deposited the Reserve
Deposit with the Facility Agent.
 
(f) Refund Guarantee.  The Borrowers shall have delivered to the Facility Agent
a true and complete copy of the Refund Guarantee and the Refund Guarantor shall
be acceptable to the Facility Agent in its sole discretion.
 
(g) Legal Opinions.  The Facility Agent, on behalf of the Agents and the
Lenders, shall have received opinions addressed to the Facility Agent from
(i) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., special
counsel to the Security Parties, (ii) Seward & Kissel LLP, special counsel to
the Agents and the Lenders and (iii) Appleby, special British Virgin Islands
counsel to the Agents and Lenders, in each case in such form as the Facility
Agent may require, as well as such other legal opinions as the Lenders shall
have required as to all or any matters under the laws of the State of Delaware,
the State of New York, the United States of America, and the British Virgin
Islands covering certain of the representations and warranties and conditions
which are the subjects of Sections 2 and 4, respectively.
 
4.4 Conditions Precedent to Advances subsequent to the Initial Advance under
Tranche 2.  With respect to Tranche 2, the obligation of the Lenders to make any
Advance subsequent to the Initial Advance available to the Borrowers under this
Agreement on the relevant Drawdown Dates shall be expressly subject to the
following conditions precedent:
 
(a) Representations and Warranties True.  The representations stated in
Section 2 being true and correct as if made on that date.
 
(b) No Default.  No Default or Event of Default having occurred and being
continuing or would result from the making of the requested Advance.
 
(c) Builder’s Invoice.  The Facility Agent having received (i) a copy of an
invoice from the Builder which includes, at a minimum, the amount payable to the
Builder at the time of such Advance, and the installment which is being financed
with the proceeds of such Advance; and (ii) evidence satisfactory to it that all
prior construction milestones have been completed pursuant to the Shipsales
Contract.
 
4.5 Conditions Precedent to Delivery Advance.  With respect to Tranche 2, the
obligation of the Lenders to make the Delivery Advance available to the
Borrowers under this Agreement on the relevant final Drawdown Date shall be
expressly subject to the following conditions precedent:
 
(a) Vessel Documents.  The Facility Agent shall have received evidence
satisfactory to it and its counsel that the Newbuilding, upon its delivery to
Dry Bulk Americas, will be:
 
(i)  
in the sole and absolute ownership of Dry Bulk Americas and duly registered in
Dry Bulk Americas’ name under the Panamanian flag free of all liens and
encumbrances of record other than its Mortgage;

 
(ii)  
insured in accordance with the provisions of the relevant Mortgage and all
requirements of the relevant Mortgage in respect of such insurance have been
fulfilled (including, but not limited to, letters of undertaking from the
insurance brokers, including confirmation notices of assignment, notices of
cancellation and loss payable clauses acceptable to the Lenders);

 
(iii)  
classed in the highest classification and rating for vessels of the same age and
type with its Classification Society without any material outstanding
recommendations; and

 
(iv)  
operationally seaworthy and in every way fit for its intended service;

 
(b) Security Documents.  Dry Bulk Americas shall have executed and delivered to
the Facility Agent:
 
(i)  
the Mortgage over the Newbuilding;

 
(ii)  
the Insurances Assignment for the Newbuilding;

 
(iii)  
the Earnings and Charterparties Assignment for the Newbuilding; and

 
(iv)  
the Assignment Notices with respect to (ii) and (iii) above.

 
(c) UCC Filings.  The Facility Agent shall have received evidence that Uniform
Commercial Code Financing Statements have been filed in the District of Columbia
and the State of Alabama and in such other jurisdictions as the Facility Agent
may reasonably require.
 
(d) Vessel Appraisals.  The Facility Agent shall have received appraisals, in
form and substance satisfactory to the Facility Agent, as to the Fair Market
Value of the Newbuilding.
 
(e) ISM DOC.  To the extent required to be obtained by the ISM Code the Security
Trustee shall have received a copy of the DOC for the Newbuilding.
 
(f) Vessel Liens.  The Facility Agent shall have received evidence satisfactory
to it and to its legal advisor that, save for the liens created by the relevant
Mortgage and the relevant Assignments, there are no liens, charges or
encumbrances of any kind whatsoever on the Newbuilding or on its earnings except
as permitted hereby or by any of the Security Documents.
 
(g) Vessel Delivery.  The Facility Agent shall be satisfied that satisfactory
arrangements have been made for (x) the registration of the Newbuilding being
delivered in the name of Dry Bulk Americas under the Panamanian flag, (y) the
execution of its Mortgage and (z) the recordation of its Mortgage with the
appropriate authorities in Panama.
 
(h) Registration of the Mortgage.  The Facility Agent shall have received
satisfactory evidence that the Mortgage on the Newbuilding has been duly
registered under the laws of Panama and constitutes a first priority mortgage
lien under the laws of such jurisdiction and a foreign “preferred mortgage”
under Chapter 313 of Title 46 of the United States Code (46 U.S.C. §§ 31301 et
seq.).
 
(i) Vessel Insurances.  The Facility Agent shall have received any evidence the
Facility Agent shall reasonably require that the Newbuilding is insured in
accordance with its Mortgage and that all requirements in respect of such
insurances have been complied with.
 
(j) Insurance Report.  The Facility Agent shall have received a detailed report
from a firm of independent marine insurance brokers appointed by the Facility
Agent in respect of the insurances on the Newbuilding, in form and substance
satisfactory to the Facility Agent, the cost of which will be for the account of
the Borrowers.
 
(k) Legal Opinions.  The Facility Agent, on behalf of the Agents and the
Lenders, shall have received opinions addressed to the Facility Agent from
(i) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., special
counsel to the Security Parties, (ii) Seward & Kissel LLP, special counsel to
the Agents and the Lenders, (iii) Appleby, special British Virgin Islands
counsel to the Agents and Lenders, and (iv) Patton, Moreno & Asvat, special
Panamanian counsel to the Agents and Lenders, in each case in such form as the
Facility Agent may require, as well as such other legal opinions as the Lenders
shall have required as to all or any matters under the laws of the State of
Delaware, the State of New York, the United States of America, the British
Virgin Islands and Panama covering certain of the representations and warranties
and conditions which are the subjects of Sections 2 and 4, respectively.
 
(l) Revenue Sharing Agreement.  The Facility Agent shall have received
satisfactory evidence that Dry Bulk Americas has entered into the Revenue
Sharing Agreement or a time charter with respect to the Newbuilding that is
based on the then current market terms and conditions and is otherwise
acceptable to the Majority Lenders in form and substance, such acceptance not to
be unreasonably withheld.
 
4.6 Waiver of Conditions Precedent.  Notwithstanding anything in Section 4.5 to
the contrary, with respect to the Newbuilding:
 
(a) Satisfaction of Conditions.  If the Facility Agent permits the Delivery
Advance relating to the Newbuilding to be borrowed before certain of the
conditions referred to in Section 4.5 are satisfied, each of the Borrowers shall
ensure that such conditions are satisfied within five (5) Business Days after
the Drawdown Date relating to the Delivery Advance for the Newbuilding (or such
longer period as the Facility Agent may specify); and
 
(b) Requirements.  With respect to the Newbuilding, the Delivery Advance may be
borrowed no more than five (5) days before the applicable conditions set forth
in Section 4.5 are satisfied provided that:
 
(i)  
the Facility Agent shall on the date on which the Delivery Advance for the
Newbuilding is funded (or as soon thereafter as practicable) (A) preposition an
amount equal to the aggregate principal amount of such Delivery Advance at a
bank or other financial institution (the “Builder’s Bank”) satisfactory to the
Facility Agent, and (B) issue a SWIFT MT 199 or other similar communication
(each such communication, a “Disbursement Authorization”), the wording and
format of which shall be acceptable to the Facility Agent, authorizing the
release of such funds by the Builder’s Bank on the Delivery Date upon receipt of
a Protocol of Delivery and Acceptance in respect of the Newbuilding duly
executed by the Builder and Dry Bulk Americas, provided that if delivery of the
Newbuilding does not occur within five (5) Business Days after the scheduled
Delivery Date, the funds held at the Builder’s Bank shall be returned to the
Facility Agent for further distribution to the Lenders;

 
(c) Acknowledgment and Agreement.  For the avoidance of doubt, the parties
hereto acknowledge and agree that:
 
(i)  
the date on which the Lenders fund the Delivery Advance relating to the
Newbuilding constitutes the Drawdown Date in respect of such Delivery Advance
and all interest and fees thereon shall accrue from such date;

 
(ii)  
the Facility Agent and the Lenders suspend fulfillment of the conditions
precedent set forth in Section 4.5 solely for the time period on and between the
Drawdown Date relating to the Newbuilding and the Delivery Date therefor, and
each of the Borrowers acknowledges and agrees that fulfillment of such
conditions precedent to the satisfaction of the Facility Agent and written
confirmation thereof to the Borrowers promptly after the conditions precedent
have been satisfied shall be required as a condition precedent to the respective
Borrower’s execution of the Protocol of Delivery and Acceptance referred to in
Section 4.6(b)(i);

 
(iii)  
from the date the proceeds of the Delivery Advance relating to the Newbuilding
are deposited at the Builder’s Bank to the Delivery Date for the Newbuilding
(or, if delivery of the Newbuilding does not occur within the time prescribed in
the Disbursement Authorization, the date on which the funds are returned to the
Facility Agent for further distribution to the Lenders), the Borrowers shall be
entitled to interest on the Delivery Advance at the applicable rate, if any,
paid by the Builder’s Bank for such deposited funds; and

 
(iv)  
if the Newbuilding is not delivered within the time prescribed in the
Disbursement Authorization and the proceeds of the Delivery Advance relating to
the Newbuilding are returned to the Facility Agent and distributed to the
Lenders, (A) the Borrowers shall pay all accrued interest and fees in respect of
such returned proceeds on the date such proceeds are returned to the Facility
Agent and (B) the amount of the Facility available for borrowing will be
increased by an amount equal to the aggregate principal amount of the Facility
proceeds so returned.

 
4.7 Further Conditions Precedent.  The obligation of the Lenders to make any
Advance available to the Borrowers shall also be expressly conditional upon:
 
(a) Drawdown Notice.  The Facility Agent having received a Drawdown Notice in
accordance with the terms of Section 3.3.
 
(b) Representations and Warranties True.  The representations stated in
Section 2 being true and correct as if made on that date.
 
(c) No Default.  No Default or Event of Default having occurred and being
continuing or would result from the making of the requested Advance.
 
(d) No Material Adverse Effect.  There having been no Material Adverse Effect
since December 31, 2010.
 
4.8 Breakfunding Costs.  In the event that, on the date specified for the making
of an Advance in the relevant Drawdown Notice, the Lenders shall not be obliged
under this Agreement to make the requested Advance available under this
Agreement, each of the Borrowers shall indemnify and hold the Lenders fully
harmless against any losses which the Lenders (or any thereof) may sustain as a
result of borrowing or agreeing to borrow funds to meet the drawdown requirement
of such Drawdown Notice and the certificate of the relevant Lender or Lenders
shall, absent manifest error, be conclusive and binding on each of the Borrowers
as to the extent of any such losses.
 
4.9 Satisfaction after Drawdown.  Without prejudice to any of the other terms
and conditions of this Agreement, in the event all of the Lenders elect, in
their sole discretion, to make the Facility available prior to the satisfaction
of all or any of the conditions referred to in Sections 4.1, 4.2, 4.3, 4.4, 4.5
or 4.7, each of the Borrowers hereby covenants and undertakes to satisfy or
procure the satisfaction of such condition or conditions within seven (7) days
after the Drawdown Date (or such longer period as the Majority Lenders, in their
sole discretion, may agree).
 
5. REPAYMENT AND PREPAYMENT
 
5.1 Repayment.  Subject to the provisions of this Section 5 regarding
application of prepayments, the Borrowers shall repay the principal of each
Tranche in consecutive quarterly installments beginning on the Initial Payment
Date for such Tranche and ending on the Final Payment Date for such
Tranche.  Each installment made in connection with Tranche 1 shall be in an
amount equal to one-twenty eighth (1/28th) of the amount of Tranche 1 made
available to the Borrowers.  Each installment made in connection with Tranche 2
shall be in an amount equal to one-sixtieth (1/60th) of the aggregate amount of
Tranche 2 made available to the Borrowers.  The last installment for each
Tranche shall be in an amount necessary to repay such Tranche in full together
with accrued but unpaid interest.  The last installment for each Tranche shall
be paid on the Final Payment Date.  The last installment paid under this
Agreement shall be paid together with any other amounts owing by any Security
Party to any Creditor pursuant to this Agreement, the Note or any Security
Document.  The Borrowers’ obligations to repay the Facility shall be joint and
several.
 
5.2 Voluntary Prepayment; No Re-borrowing.  The Borrowers may prepay, upon five
(5) Banking Days written notice, which notice shall be irrevocable, the Facility
or any portion thereof, without penalty, provided that if such prepayment is
made on a day other than a Payment Date, such prepayment shall be made together
with the costs and expenses provided for in Section 5.5.  Each prepayment shall
be in a minimum amount of Five Million United States Dollars (US$5,000,000),
plus any One Million United States Dollar (US$1,000,000) multiple thereof, or
the full amount of the Facility then outstanding.  Notwithstanding the
provisions of Section 5.5(b), so long as no Default or Event of Default has
occurred or is continuing, amounts prepaid under this Section 5.2 shall be
applied against the Tranches at the Borrowers’ option.  No part of the Facility
once repaid or prepaid will be available for re-borrowing.
 
5.3 Mandatory Prepayment; Sale or Loss of Vessel.  Upon (i) the sale of a
Vessel, or (ii) the sale, transfer or assignment of the Shipsales Contract from
Dry Bulk Americas to a third party, or (iii) the earlier of (x) ninety (90) days
after the Total Loss (as such term is defined in each Mortgage) of a Vessel or
(y) the date on which the insurance proceeds in respect of such loss are
received by the relevant Borrower or the Security Trustee as assignee thereof,
the Borrowers shall repay the relevant Tranche in full.
 
5.4 Optional Permanent Reduction of Facility.  The Borrowers shall have the
right at any time prior to the final Drawdown Date, upon five (5) Banking Days
written notice to the Facility Agent, to permanently reduce the Facility.  Each
permanent reduction shall be in a minimum amount of Five Million United States
Dollars (US$5,000,000), plus any One Million United States Dollar (US$1,000,000)
multiple thereof.  Should the Borrowers exercise the permanent reduction option
provided in this Section 5.4 each Lender’s Commitment shall be reduced
pro-rata.  If the Borrowers reduce the Facility pursuant to this Section 5.4
such that the available amount of the Facility is less than the aggregate
outstanding amount of the Facility, the Borrowers shall repay the Facility so
that (i) the available amount of the Facility shall be equal to or greater than
the aggregate outstanding amount of the Facility and (ii) the Borrowers are in
compliance with Section 9.4.
 
5.5 Interest and Cost With Application of Prepayments.  Any and all prepayments
hereunder, whether mandatory or voluntary, shall be applied in the following
order:
 
(a) firstly, towards accrued and unpaid interest and for fees due under this
Agreement; and
 
(b) secondly, towards the installments of the Tranches in the inverse order of
their due dates for payment.
 
5.6 Borrowers' Obligation Absolute.  The Borrowers’ obligation to pay each
Creditor hereunder and under the Note shall be absolute, unconditional,
irrevocable and joint and several, and shall be paid strictly in accordance with
the terms hereof and thereof, under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrowers may have
or may have had against the Creditors.
 
6. INTEREST AND RATE
 
6.1 Payment of Interest; Interest Rate.  (a) Each of the Borrowers hereby
promises to pay to the Lenders interest on the unpaid principal amount of each
Tranche for the period commencing on the initial Drawdown Date for such Tranche
until but not including the stated maturity thereof (whether by acceleration or
otherwise) or the date of prepayment thereof at the Applicable Rate, which shall
be the rate per annum which is equal to the aggregate of (a) the LIBOR Rate plus
(b) the Margin plus (c) Mandatory Costs (if any).  The Facility Agent shall
promptly notify the Borrowers and the Lenders in writing of the Applicable Rate
as and when determined.  Each such determination, absent manifest error, shall
be conclusive and binding upon the Borrowers.
 
(b) Notwithstanding the foregoing, each of the Borrowers agrees that after the
occurrence and during the continuance of an Event of Default, the Facility shall
bear interest at the Default Rate.  In addition, each of the Borrowers hereby
promises to pay interest (to the extent that the payment of such interest shall
be legally enforceable) on any overdue interest, and on any other amount payable
by the Borrowers hereunder which shall not be paid in full when due (whether at
stated maturity, by acceleration or otherwise), for the period commencing on the
due date thereof until but not including the date the same is paid in full at
the Default Rate.
 
(c) The Borrowers shall give the Facility Agent an Interest Notice specifying
the Interest Period selected at least three (3) Banking Days prior to the end of
any then existing Interest Period, which notice the Facility Agent agrees to
forward on to all Lenders as soon as practicable.  If at the end of any then
existing Interest Period the Borrowers fail to give an Interest Notice, the
relevant Interest Period shall be three (3) months.  The Borrowers' right to
select an Interest Period shall be subject to the restriction that no selection
of an Interest Period shall be effective unless each Lender is satisfied that
the necessary funds will be available to such Lender for such period and that no
Event of Default or event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default shall have occurred and be
continuing.
 
(d) Accrued interest on each Tranche shall be payable in arrears on the last day
of each Interest Period relating to such Tranche, except that if the Borrowers
shall select an Interest Period in excess of three (3) months, accrued interest
shall be payable during such Interest Period on each three (3) month anniversary
of the commencement of such Interest Period and upon the end of such Interest
Period.
 
(e) Interest payable at the Default Rate shall be payable from time to time on
demand of the Facility Agent.
 
6.2 Maximum Interest.  Anything in this Agreement or the Note to the contrary
notwithstanding, the interest rate on the Facility shall in no event be in
excess of the maximum rate permitted by applicable law.
 
7. PAYMENTS
 
7.1 Time and Place of Payments, No Set Off.  All payments to be made hereunder
by the Borrowers shall be made to the Facility Agent, not later than 3 p.m.
London time (any payment received after 3 p.m. London time shall be deemed to
have been paid on the next Banking Day) on the due date of such payment, at its
office located at 60 London Wall, London EC2M 5TQ, England or to such other
office of the Facility Agent as the Facility Agent may direct, without set-off
or counterclaim and free from, clear of, and without deduction for, any Taxes,
provided, however, that if the Borrowers shall at any time be compelled by law
to withhold or deduct any Taxes from any amounts payable to the Lenders
hereunder, then the Borrowers shall pay such additional amounts in Dollars as
may be necessary in order that the net amounts received after withholding or
deduction shall equal the amounts which would have been received if such
withholding or deduction were not required and, in the event any withholding or
deduction is made, whether for Taxes or otherwise, the Borrowers shall promptly
send to the Facility Agent such documentary evidence with respect to such
withholding or deduction as may be required from time to time by the Lenders.
 
7.2 Tax Credits.  If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrowers have paid additional amounts
as aforesaid (and each Lender agrees to use its best efforts to obtain the
benefit of any such credit which may be available to it, provided it has
knowledge that such credit is in fact available to it), then such Lender shall
reimburse the Borrowers for the amount of the credit so obtained.  Each Lender
agrees that in the event that Taxes are imposed on account of the situs of its
loans hereunder, such Lender, upon acquiring knowledge of such event, shall, if
commercially reasonable, shift such loans on its books to another office of such
Lender so as to avoid the imposition of such Taxes.
 
7.3 Computations; Banking Days.
 
(a) All computations of interest and fees shall be made by the Facility Agent or
the Lenders, as the case may be, on the basis of a 360-day year, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which interest or fees are payable.  Each
determination by the Facility Agent or the Lenders of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
 
(b) Whenever any payment hereunder or under the Note shall be stated to be due
on a day other than a Banking Day, such payment shall be due and payable on the
next succeeding Banking Day unless the next succeeding Banking Day falls in the
following calendar month, in which case it shall be payable on the immediately
preceding Banking Day.
 
8. EVENTS OF DEFAULT
 
8.1 Events of Default.  In the event that any of the following events shall
occur and be continuing:
 
(a) Principal Payments.  Any principal of the Facility is not paid on the due
date therefor; or
 
(b) Interest and other Payments.  Any interest on the Facility or any other
amount becoming payable under this Agreement and under any Transaction Document
or under any of them, is not paid within three (3) Banking Days from the date
when due; or
 
(c) Representations, etc.  Any representation, warranty or other statement made
by any of the Security Parties in this Agreement or in any other instrument,
document or other agreement delivered in connection herewith proves to have been
untrue or misleading in any material respect as at the date as of which it was
made; or
 
(d) Impossibility, Illegality.  It becomes impossible or unlawful for any of the
Security Parties to fulfill any of the covenants and obligations contained
herein or in any Transaction Document, or for any of the Lenders to exercise any
of the rights vested in any of them hereunder or under the other Transaction
Documents and such impossibility or illegality, in the reasonable opinion of
such Lender, will have a Material Adverse Effect on any of its rights hereunder
or under the other Transaction Documents or on any of its rights to enforce any
thereof; or
 
(e) Mortgage.  (i) The Mortgage relating to the BULK AUSTRALIA is not delivered
on the Drawdown Date relating to such Vessel, (ii) the Mortgage relating to the
NEWBUILDING is not delivered on within five (5) days after the Drawdown Date
relating to such Vessel, or (iii) there is any default under either of the
Mortgages; or
 
(f) Certain Covenants.  Any Security Party defaults in the performance or
observance of any covenant contained in Section 9.1(b), 9.1(m), 9.2(i) and
9.3(a) through (d) inclusive; or
 
(g) Covenants.  One or more of the Security Parties default in the performance
of any term, covenant or agreement contained in this Agreement or in the other
Transaction Documents, or in any other instrument, document or other agreement
delivered in connection herewith or therewith, in each case other than an Event
of Default referred to elsewhere in this Section 8.1, and such default continues
unremedied for the shorter of (i) a period of fifteen (15) days after written
notice thereof has been given to the relevant Security Party or Security Parties
by the Facility Agent at the request of any Lender or (ii) a period of thirty
(30) days from the date of such default; or
 
(h) Indebtedness and Other Obligations.  Any Security Party defaults in the
payment when due (subject to any applicable grace period) of any Indebtedness or
of any other indebtedness, in either case, in an outstanding principal amount
equal to or exceeding Two Million Dollars ($2,000,000) or such Indebtedness or
other indebtedness is, or by reason of such default is subject to being,
accelerated or any party becomes entitled to enforce the security for any such
Indebtedness or other indebtedness and such party shall take steps to enforce
the same, unless such default or enforcement is being contested in good faith
and by appropriate proceedings or other acts and such  Security Party has set
aside on its books adequate reserves with respect thereto; or
 
(i) Bankruptcy.  Any Security Party commences any proceedings relating to any
substantial portion of its property under any reorganization, arrangement or
readjustment of debt, dissolution, winding up, adjustment, composition,
bankruptcy or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect (a “Proceeding”), or there is commenced against any thereof
any Proceeding and such Proceeding remains undismissed or unstayed for a period
of sixty (60) days; or any receiver, trustee, liquidator or sequestrator of, or
for, any thereof or any substantial portion of the property of any thereof is
appointed and is not discharged within a period of sixty (60) days; or any
thereof by any act indicates consent to or approval of or acquiescence in any
Proceeding or to the appointment of any receiver, trustee, liquidator or
sequestrator of, or for, itself or any substantial portion of its property; or
 
(j) Judgments.  Any judgment or order is made the effect whereof would be to
render invalid this Agreement or any other Transaction Document or any material
provision thereof or any Security Party asserts that any such agreement or
provision thereof is invalid; or judgments or orders for the payment of money
(not paid or fully covered by insurance, subject to applicable deductibles) in
excess of $2,500,000 in the aggregate for the Guarantor or its Subsidiaries (or
its equivalent in any other currency) shall be rendered against the Guarantor
and/or any of its Subsidiaries and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days; or
 
(k) Inability to Pay Debts.  Any Security Party is unable to pay or admits its
inability to pay its debts as they fall due or a moratorium shall be declared in
respect of any Indebtedness of any thereof; or
 
(l) Termination of Operations; Sale of Assets.  Except as expressly permitted
under this Agreement, any Security Party ceases its operations or sells or
otherwise disposes of all or substantially all of its assets or all or
substantially all of the assets of any Security Party are seized or otherwise
appropriated; or
 
(m) Change in Financial Position.  Any change in the financial position of any
Security Party which, in the reasonable opinion of the Majority Lenders, shall
have a Material Adverse Effect; or
 
(n) Cross-Default.  Any Security Party defaults under any material contract or
agreement to which it is a party or by which it is bound; or
 
(o) ERISA Events.  Any (i) ERISA Funding Event or Foreign Underfunding shall
occur or exist that, when taken together with all other ERISA Funding Events and
Foreign Underfundings that exist or have occurred, in the opinion of the
Facility Agent, could reasonably be expected to result in a Material Adverse
Effect or (ii) an ERISA Termination Event or a Foreign Termination Event shall
occur;
 
(p) Change of Control.  A Change of Control has occurred;
 
then, the Lenders' obligation to make the Facility available shall cease and the
Facility Agent on behalf of the Lenders may, with the Majority Lenders' consent
and shall, upon the Majority Lenders' instruction, by notice to the Borrowers,
declare the entire Facility, accrued interest and any other sums payable by the
Borrowers hereunder, under the Note and under the other Transaction Documents
due and payable whereupon the same shall forthwith be due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; provided that upon the happening of an event specified in
subclauses (i) or (k) of this Section 8.1, the Facility, accrued interest and
any other sums payable by the Borrowers hereunder, under the Note and under the
other Transaction Documents shall be immediately due and payable without
declaration, presentment, demand, protest or other notice to the Borrowers all
of which are expressly waived.  In such event, the Creditors, or any thereof,
may proceed to protect and enforce their respective rights by action at law,
suit in equity or in admiralty or other appropriate proceeding, whether for
specific performance of any covenant contained in this Agreement or in the Note
or in any other Transaction Document or in aid of the exercise of any power
granted herein or therein, or the Lenders or the Facility Agent may proceed to
enforce the payment of the Note when due or to enforce any other legal or
equitable right of the Lenders, or proceed to take any action authorized or
permitted by applicable law for the collection of all sums due, or so declared
due, including, without limitation, the right to appropriate and hold or apply
(directly, by way of set-off or otherwise) to the payment of the obligations of
the Borrowers to any of the Creditors hereunder, under the Note and/or under the
other Transaction Documents (whether or not then due) all moneys and other
amounts of the Borrowers then or thereafter in possession of any Creditor, the
balance of any deposit account (demand or time, matured or unmatured) of the
Borrowers then or thereafter with any Creditor and every other claim of the
Borrowers then or thereafter against any of the Creditors.
 
8.2 Indemnification.  Each of the Borrowers agrees to, and shall, indemnify and
hold each of the Creditors harmless against any loss, as well as against any
reasonable costs or expenses (including reasonable legal fees and expenses),
which any of the Creditors sustains or incurs as a consequence of any default in
payment of the principal amount of the Facility, interest accrued thereon or any
other amount payable hereunder, under the Note or under the other Transaction
Documents including, but not limited to, all actual losses incurred in
liquidating or re-employing fixed deposits made by third parties or funds
acquired to effect or maintain the Facility or any portion thereof.  Any
Creditor's certification of such costs and expenses shall, absent any manifest
error, be conclusive and binding on the Borrowers.
 
8.3 Application of Moneys.  Except as otherwise provided in any Security
Document, all moneys received by the Creditors under or pursuant to this
Agreement, the Note or any of the Security Documents after the happening of any
Event of Default (unless cured to the satisfaction of the Majority Lenders)
shall be applied by the Facility Agent (pro-rata amongst the Tranches) in the
following manner:
 
(a) firstly, in or towards the payment or reimbursement of any expenses or
liabilities incurred by any of the Creditors in connection with the
ascertainment, protection or enforcement of its rights and remedies hereunder,
under the Note and under the other Transaction Documents;
 
(b) secondly, in or towards payment of any interest owing in respect of the
Facility;
 
(c) thirdly, in or towards repayment of the principal of the Facility;
 
(d) fourthly, in or towards payment of all other sums which may be owing to any
of the Creditors under this Agreement, under the Note and under the other
Transaction Documents;
 
(e) fifthly, in or towards payments of any amounts then owed under any Interest
Rate Agreement; and
 
(f) sixthly, the surplus (if any) shall be paid to the Borrowers or to
whomsoever else may be entitled thereto.
 
9. COVENANTS
 
9.1 Affirmative Covenants.  Each of the Security Parties hereby covenants and
undertakes with the Lenders that, from the date hereof and so long as any
principal, interest or other moneys are owing in respect of this Agreement, the
Note or any of the Security Documents, it will:
 
(a) Performance of Agreements.  Duly perform and observe, and procure the
observance and performance by all other parties thereto (other than the Lenders)
of, the terms of this Agreement, the Note and the Security Documents;
 
(b) Notice of Default, etc.  Promptly upon obtaining knowledge thereof, inform
the Facility Agent of the occurrence of (a) any Event of Default or of any event
which, with the giving of notice or lapse of time, or both, would constitute an
Event of Default, (b) any litigation or governmental proceeding pending or
threatened against any Security Party which could reasonably be expected to have
a Material Adverse Effect, (c) the withdrawal of either Vessel's rating by its
Classification Society or the issuance by the Classification Society of any
material recommendation or notation affecting class and (d) any other event or
condition which is reasonably likely to have a Material Adverse Effect, in each
case promptly, and in any event within three (3) Banking Days after becoming
aware of the occurrence thereof;
 
(c) Obtain Consents.  Without prejudice to Section 2.1 and this Section 9.1,
obtain every consent and do all other acts and things which may from time to
time be necessary or advisable for the continued due performance of all of its
and the other Security Parties' respective obligations under this Agreement,
under the Note and under the Security Documents;
 
(d) Financial Information.  Deliver to the Facility Agent with sufficient copies
for the Lenders to be distributed to the Lenders by the Facility Agent promptly
upon the receipt thereof:
 
(i)  
as soon as available, but not later than ninety (90) days after the end of each
fiscal year of the Guarantor, complete copies of the consolidated financial
reports of the Guarantor and its Subsidiaries inclusive of a financial report of
each of the Borrowers (together with a Compliance Certificate that includes,
inter alia, a reconciliation of all of the differences between GAAP as at March
31, 2011 and GAAP as at the time of delivery), all in reasonable detail which
shall include at least the consolidated balance sheet of the Guarantor and its
Subsidiaries and a balance sheet for each of the Borrowers as of the end of such
year and the related statements of income for such year (as well as the related
statement of sources and uses of funds for such year for the Guarantor only),
each as prepared in accordance with GAAP, all in reasonable detail, which shall
be prepared by an Acceptable Accounting Firm and, with respect to the Guarantor,
be audited reports;

 
(ii)  
as soon as available, but not less than forty-five (45) days after the end of
each of the first three quarters of each fiscal year of the Guarantor, a
quarterly interim balance sheets and profit and loss statements of the Guarantor
and its Subsidiaries and the related profit and loss statements and sources and
uses of funds (together with a Compliance Certificate that includes, inter alia,
a reconciliation of all of the differences between GAAP as at March 31, 2011 and
GAAP as at the time of delivery), all in reasonable detail, unaudited, but
certified to be true and complete by the chief financial officer of the
Guarantor;

 
(iii)  
promptly upon the mailing thereof to the shareholders of the Guarantor, copies
of all financial statements, reports, proxy statements and other communications
provided to the Guarantor's shareholders;

 
(iv)  
within ten (10) days of the Guarantor's receipt thereof, copies of all audit
letters or other correspondence from any external auditors including material
financial information in respect of the Guarantor and its Subsidiaries; and

 
(v)  
such other statements (including, without limitation, monthly consolidated
statements of operating revenues and expenses), lists of assets and accounts,
budgets, forecasts, reports and other financial information with respect to its
business as the Facility Agent may from time to time reasonably request,
certified to be true and complete by the chief financial officer of the
Guarantor;

 
(e) Contingent Liabilities.  For inclusion with each Compliance Certificate
delivered in connection with Sections 9.1(d)(i) and 9.1(d)(ii), and in any event
upon the reasonable request of the Facility Agent, an accounting of all of the
contingent liabilities of each Security Party;
 
(f) Vessel Covenants.  with respect to each of the Vessels:
 
(i)          keep the Vessels registered in the name of the applicable Borrower;
 
(ii)          keep the Vessels in good and safe condition and state of repair;
 
 
(iii)
keep the Vessels insured in accordance with the provisions of the relevant
Mortgage recorded against it and the requirements thereof in respect of such
insurances have been complied with;

 
 
(iv)
notify the Facility Agent of all modifications to either of the Vessels and of
the removal of any parts or equipment from either of the Vessels; and

 
 
(v)
provide the Facility Agent with all requested Vessel related information;

 
(g) Vessel Valuations.  For inclusion with each Compliance Certificate delivered
pursuant to Section 9.1(d)(i), and in any event upon the reasonable request of
the Facility Agent, the Borrowers shall obtain appraisals of the Fair Market
Value of each Vessel.  All valuations are to be at the Borrowers' cost.  In the
event the Borrowers fail or refuse to obtain the valuations requested pursuant
to this Section 9.1 within ten (10) days of the Facility Agent's request
therefor, the Facility Agent will be authorized to obtain such valuations, at
the Borrowers' cost, from two of the approved ship brokers listed on Schedule
II, which valuations shall be deemed the equivalent of valuations duly obtained
by the Borrowers pursuant to this Section 9.1(g), but the Facility Agent's
actions in doing so shall not excuse any default of the Borrowers under this
Section 9.1(g);
 
(h) Corporate Existence.  Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and all
licenses, franchises, permits and assets necessary to the conduct of its
business;
 
(i) Books and Records.  At all times keep proper books of record and account
into which full and correct entries shall be made in accordance with GAAP;
 
(j) Taxes and Assessments.  Pay and discharge all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
property prior to the date upon which penalties attach thereto; provided,
however, that it shall not be required to pay and discharge, or cause to be paid
and discharged, any such tax, assessment, charge or levy so long as the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and it shall set aside on its books adequate reserves with respect thereto;
 
(k) Inspection.  Allow any representative or representatives designated by the
Facility Agent, subject to applicable laws and regulations, to visit and inspect
any of its properties, and, on request, to examine its books of account,
records, reports and other papers and to discuss its affairs, finances and
accounts with its officers, all at such reasonable times and as often as the
Facility Agent reasonably requests;
 
(l) Inspection and Survey Reports.  If the Lenders shall so request, the
Borrowers shall provide the Lenders with copies of all internally generated
inspection or survey reports on any Vessel;
 
(m) Compliance with Statutes, Agreements, etc.  Do or cause to be done all
things necessary to comply with all material contracts or agreements to which
any of the Security Parties is a party, and all material laws, and the rules and
regulations thereunder, applicable to such Security Party, including, without
limitation, those laws, rules and regulations relating to employee benefit plans
and environmental matters except where failure to do so would not be reasonably
likely to have a Material Adverse Effect;
 
(n) Environmental Matters.  Promptly upon the occurrence of any of the following
conditions, provide to the Facility Agent a certificate of a chief executive
officer of the Guarantor, specifying in detail the nature of such condition and
its proposed response or the proposed response of any Environmental
Affiliate:  (a) its receipt or the receipt by any Environmental Affiliate of any
written communication whatsoever that alleges that such Person is not in
compliance with any applicable Environmental Law or Environmental Approval, if
such noncompliance could reasonably be expected to have a Material Adverse
Effect, (b) knowledge by it or any Environmental Affiliate that there exists any
Environmental Claim pending or threatened against any such Person, which could
reasonably be expected to have a Material Adverse Effect, or (c) any release,
emission, discharge or disposal of any material that could form the basis of any
Environmental Claim against it or against any Environmental Affiliate, if such
Environmental Claim could reasonably be expected to have a Material Adverse
Effect.  Upon the written request by the Facility Agent, the Borrowers will
submit to the Facility Agent at reasonable intervals, a report providing an
update of the status of any issue or claim identified in any notice or
certificate required pursuant to this subsection;
 
(o) Insurance.  Maintain with financially sound and reputable insurance
companies insurance on all its properties and against all such risks and in at
least such amounts and with such deductibles as are usually insured against by
companies of established reputation engaged in the same or similar business from
time to time;
 
(p) Vessel Insurance.  With respect to each Vessel, (i) insure, and keep
insured, or procure that the Borrowers, as owners, will insure and keep the
Vessels insured in accordance with the terms of the Mortgages, more specifically
each Vessel will be insured with respect to all risks hull and machinery
(including excess risks which shall not exceed twenty percent (20%) of the total
hull and machinery coverage), provided that the total hull coverage and excess
risk coverage is to be at least the higher of (a) the aggregate Fair Market
Value of such Vessel at the most recent date at which such Fair Market Value
shall have been determined pursuant to this Agreement or (b) one hundred twenty
five percent (125%) of the amount outstanding under the relevant Tranche, (ii)
notify the Facility Agent in writing, at least twenty-one (21) days prior to all
insurance renewals, (iii) deliver to Facility Agent all letters of undertaking,
copies of all insurance policies and certificates of entry on terms acceptable
to the Facility Agent and its advisors, (iv) ensure that Facility Agent is named
as loss payee on all insurances and (v) reimburse Facility Agent for payment of
mortgagee’s interest insurance and mortgagee’s additional perils (pollution)
insurance to be subscribed by the Facility Agent in an amount equal to one
hundred twenty five percent (125%) of the amount outstanding under each Tranche;
 
(q) Vessel Management.  Upon the delivery of each Vessel, (i) cause such Vessel
to be technically managed by (1) the Guarantor, (2) a wholly-owned subsidiary of
the Guarantor, or (3) C Transport Maritime, and (ii) commercially managed by (1)
the Guarantor, (2) a wholly owned subsidiary of the Guarantor or (3) C
Transport;
 
(r) Brokerage Commissions, etc.  Indemnify and hold each of the Agents and the
Lenders harmless from any claim for any brokerage commission, fee or
compensation from any broker or third party resulting from the transactions
contemplated hereby;
 
(s) ISM Code, ISPS Code and MTSA Matters.  Upon the delivery of a Vessel, (i)
procure that the Operator will comply with and ensure that such Vessel will
comply with the requirements of the ISM Code, ISPS Code and MTSA in accordance
with the implementation schedules thereof, including (but not limited to) the
maintenance and renewal of valid certificates, and when required, security
plans, pursuant thereto throughout the term of the Facility; and (ii) procure
that the Operator will immediately inform the Facility Agent if there is any
threatened or actual withdrawal of its DOC, SMC or the ISSC in respect of such
Vessel; and (iii) procure that the Operator will promptly inform the Facility
Agent upon the issuance to either of the Borrowers or Operator of a DOC and to
such Vessel of an SMC or ISSC;
 
(t) ERISA.  Forthwith upon (i) the occurrence of any ERISA Termination Event or
Foreign Termination Event or (ii) the occurrence or existence of any ERISA
Funding Event or Foreign Underfunding, furnish or cause to be furnished to the
Lenders written notice thereof;
 
(u) Evidence of Current COFR.  To the extent that any Vessel travels in United
States waters or becomes flagged in the United States, if the Lenders shall so
request, provide the Lenders with copies of the current Certificate of Financial
Responsibility pursuant to the Oil Pollution Act 1990 for such Vessel;
 
(v) Security Documents.  Within three (3) Banking Days of the delivery of the
Newbuilding, cause the Security Documents required pursuant to Section 4.5(b)
relating to such Vessel to be executed and, with respect to its Mortgage,
recorded with the appropriate authorities in Panama;
 
(w) Drawdown of Advance relating to Tranche 1.  Within ten (10) Banking Days of
the date hereof, deliver a Drawdown Notice to the Facility Agent with respect to
the Advance for Tranche 1;
 
(x) Interest Rate Agreement Right of First and Last Refusal.  Provide the Swap
Bank the right of first and last refusal on any Interest Rate Agreement relating
to the Facility;
 
(y) Pari Passu.  Ensure that its respective unsecured obligations, if any, under
this Agreement, the Note, and the Security Documents shall at all times rank at
least pari passu with all of its present and future unsecured and unsubordinated
indebtedness, if any, with the exception of any obligations which are
mandatorily preferred by any applicable laws to companies generally and not by
contract;
 
(z) Listing on NYSE.  With respect to the Guarantor, maintain its listing on the
New York Stock Exchange;
 
(aa) Change of Ownership.  Ensure no change in the ownership of the capital
stock or other equity interest of either of the Borrowers, except for changes
such that the Guarantor or one of its wholly-owned subsidiaries owns one hundred
percent (100%) of such capital stock or other equity interest.
 
(bb) Maintenance of Properties.  Keep all material property necessary in its
business in good working order and condition (ordinary wear and tear and loss or
damage by casualty or condemnation excepted).
 
(cc) Reserve Deposit.  Procure that Dry Bulk Australia shall deposit the Reserve
Deposit with the Facility Agent prior to the Initial Advance under Tranche 2 and
maintain the Reserve Deposit with the Facility Agent until the Newbuilding’s
Delivery Date.
 
9.2 Negative Covenants.  Each of the Security Parties hereby covenants and
undertakes with the Lenders that, from the date hereof and so long as any
principal, interest or other moneys are owing in respect of this Agreement, the
Note or any other Transaction Documents, it will not, without the prior written
consent of the Majority Lenders (or all of the Lenders if required pursuant to
Section 17.8):
 
(a) Liens.  Create, assume or permit to exist, any mortgage, pledge, lien,
charge, encumbrance or any security interest whatsoever upon any Collateral or,
in respect of each of the Borrowers and the Guarantor, other property except:
 
(i)  
liens disclosed in Schedule III;

 
(ii)  
liens to secure Indebtedness permitted under Section 9.2(m), such liens to be
limited to the vessels constructed or acquired;

 
(iii)  
liens for taxes not yet payable for which adequate reserves have been
maintained;

 
(iv)  
the Mortgages, the Assignments and other liens in favor of the Security Trustee
or the Lenders;

 
(v)  
liens, charges and encumbrances against either Vessel permitted to exist under
the terms of the Mortgages;

 
(vi)  
pledges of certificates of deposit or other cash collateral securing
reimbursement obligations in connection with letters of credit now or
hereinafter issued for its account in connection with the establishment of its
financial responsibility under 33C.F.R. Part 130 or 46 C.F.R. Part 540, as the
case may be, as the same may be amended and replaced;

 
(vii)  
pledges or deposits to secure obligations under workmen's compensation laws or
similar legislation, deposits to secure public or statutory obligations,
warehousemen's or other like liens, or deposits to obtain the release of such
liens and deposits to secure surety, appeal or customs bonds on which it is the
principal, as to all of the foregoing, only to the extent arising and continuing
in the ordinary course of business; and

 
(viii)  
other liens, charges and encumbrances incidental to the conduct of its business,
the ownership of its property and assets which are not more than 30 days overdue
and which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of its
business;

 
(b) Third Party Guaranties.  Guaranty the obligations of any third party, except
a direct or indirect subsidiary of the Guarantor, whether or not affiliated with
such Security Party;
 
(c) Liens on Shares of Borrowers.  With respect to the Guarantor, create, assume
or permit to exist, any mortgage, pledge, lien, charge, encumbrance or any
security interest whatsoever upon the shares of either of the Borrowers;
 
(d) Subordination of Inter-Company Indebtedness.  With respect to the Guarantor,
procure that, upon the occurrence and during the continuance of an Event of
Default, no payments are made by any Security Party on any inter-company
Indebtedness until such time as the Facility is repaid in full;
 
(e) Transaction with Affiliates.  Enter into any transaction with an Affiliate,
other than on an arms length basis;
 
(f) Change of Flag, Class, Management or Ownership.  After delivery of either
Vessel to the respective Borrower, change the flag of such Vessel other than to
a jurisdiction reasonably acceptable to the Lenders, its Classification Society
other than to another member of the International Association of Classification
Societies reasonably acceptable to the Lenders, the technical management of such
Vessel other than to one or more technical management companies reasonably
acceptable to the Lenders or the immediate or ultimate ownership of such Vessel;
 
(g) Chartering.  Enter into any bareboat charter party agreement with respect to
either Vessel;
 
(h) Change in Business.  Materially change the nature of its business or
commence any business materially different from its current business;
 
(i) Sale of Assets.  Other than as reasonably acceptable to the Majority
Lenders, sell, or otherwise dispose of, any Vessel, the Shipsales Contract or
any other asset (including by way of spin-off, installment sale or otherwise)
which is substantial in relation to its assets taken as a whole; provided,
however, that the Borrowers may sell any Vessel to a third party in an arm's
length transaction provided that the proceeds of such sale are distributed in
accordance with Section 5.3 of this Agreement;
 
(j) Changes in Offices or Names.  Change the location of its chief executive
office, its chief place of business or the office in which its records relating
to the earnings or insurances of any Vessel are kept or change its name unless
the Lenders shall have received sixty (60) days prior written notice of such
change;
 
(k) Consolidation and Merger.  Consolidate with, or merge into, any corporation
or other entity, or merge any corporation or other entity into it; provided,
however, that the Guarantor may merge with any Subsidiary or any other Person if
(A) at the time of such transaction and after giving effect thereto, no Default
or Event of Default shall have occurred or be continuing, (B) the surviving
entity of such consolidation or merger shall be the Guarantor and (C) after
giving effect to the transaction, the Guarantor's Consolidated Tangible Net
Worth shall be greater or equal to its Consolidated Tangible Net Worth prior to
the merger;
 
(l) Change Fiscal Year.  In the case of the Guarantor, change its fiscal year;
 
(m) Indebtedness.  In the case of the Security Parties, incur any new
Indebtedness (which, for the sake of clarity, shall exclude any Indebtedness
pursuant to this Agreement) other than Indebtedness incurred to finance the
acquisition and/or construction of any vessels, provided that the principal
amount of such Indebtedness shall not exceed eighty percent (80%) of such
acquisition and/or construction price, unless such Indebtedness is subordinated
to all existing Indebtedness and this Facility;
 
(n) Limitations on Ability to Make Distributions.  Create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary to pay dividends or make any other distributions
on its capital stock or limited liability company interests, as the case may be,
to the Borrowers or the Guarantor;
 
(o) Change of Control.  Cause or permit a Change of Control;
 
(p) No Money Laundering.  Contravene any law, official requirement or other
regulatory measure or procedure implemented to combat “money laundering” (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities) and comparable United States Federal and state laws;
 
(q) Shipsales Contract and Refund Guarantee.  Amend any material provision in
the Shipsales Contract or the Refund Guarantee, without the prior written
consent of the Facility Agent; and
 
(r) Negative Pledge  Create, assume or permit to exist, any mortgage, pledge,
lien, charge, encumbrance or any security interest whatsoever upon the Reserve
Deposit other than in favor of the Creditors.
 
9.3 Financial Covenants.  The Guarantor hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of this Agreement, the Note or any of the
Security Documents, it will:
 
(a) Consolidated Indebtedness to Consolidated EBITDA Ratio.  Maintain, on a
consolidated basis, a ratio of Consolidated Indebtedness to Consolidated EBITDA
of not more than 4.25 to 1.00, as measured at the end of each fiscal quarter
based on the four most recent fiscal quarters for which financial information is
available;
 
(b) Working Capital.  Maintain on a consolidated basis a ratio of current assets
to current liabilities of not less than 1.00 to 1.00, as measured at the end of
each fiscal quarter;
 
(c) Consolidated Tangible Net Worth.  Maintain a Consolidated Tangible Net
Worth, as measured at the end of each fiscal quarter, in an amount of not less
than the sum of (i) ninety percent (90%) of Consolidated Tangible Net Worth as
of December 31, 2010 and (ii) the sum of fifty percent (50%) of (A) all net
income of the Guarantor (on a consolidated basis) earned after December 31,
2010, and (B) the proceeds from the issuance of any common and/or preferred
stock of the Guarantor on or after December 31, 2010; and
 
(d) Consolidated EBITDA to Interest Expense.  Maintain a ratio of Consolidated
EBITDA to Interest Expense of not less than 2.50 to 1.00, measured at the end of
each fiscal quarter based on the four most recent fiscal quarters for which
financial information is available.
 
9.4 Asset Maintenance.  If at any time during the term of this Agreement, the
aggregate Fair Market Value of the Vessels delivered to a Borrower is less than
the Required Percentage of the outstanding amount of the Facility (calculated
only for Tranches where the Vessel pertaining to such Tranche has been
delivered), the Borrowers shall, within a period of thirty (30) days following
receipt by the Borrowers of written notice from the Facility Agent notifying the
Borrowers of such shortfall and specifying the amount thereof (which amount
shall, in the absence of manifest error, be deemed to be conclusive and binding
on the Borrowers), either (1) prepay such amount of the relevant Tranche or
Facility (as applicable) (together with interest thereon and any other monies
payable in respect of such prepayment pursuant to Section 5.5) as shall result
in the Fair Market Value of the relevant Vessel or Vessels (as applicable) being
not less than the Required Percentage of the outstanding amount of the relevant
Tranche or Facility (as applicable), or (2) place on charged deposits with the
Facility Agent an amount in Dollars (together with interest thereon and any
other monies payable in respect of such prepayment pursuant to Section 5.5) as
shall result in the Fair Market Value of the relevant Vessel or Vessels (as
applicable) together with the amount deposited being not less than the Required
Percentage of the outstanding amount of the relevant Tranche or Facility (as
applicable).  Any charged deposit shall be released to the Borrowers when the
Fair Market Value of the relevant Vessel or Vessels (as applicable) is not less
than the Required Percentage of the outstanding amount of the relevant Tranche
or Facility (as applicable).
 
10. GRANT OF SECURITY.
 
10.1           Each of the Borrowers does hereby transfer, convey, mortgage,
hypothecate, pledge, assign and grant a first priority security interest to the
Security Trustee, in and to any Interest Rate Agreement to which it is a party
to the extent of its right, title and interest therein TO HAVE AND TO HOLD any
such Interest Rate Agreement or forward foreign exchange contract unto the
Security Trustee, and its successors and assigns, as security for the due and
punctual payment and performance of its obligations hereunder and under the
Note; provided however that, and these presents are subject to the condition
that, if the Borrowers shall have paid or caused to be paid or performed all of
the obligations hereunder and under the Note which are due and owing on or
before the Final Payment Date and no Event of Default shall have occurred and be
subsisting, the security interest created by this Agreement shall terminate and
be discharged and upon the request of the Borrowers, the Lenders shall execute
and deliver to the Borrowers, at the expense of the Borrowers, such instruments
of satisfaction and release as may be appropriate.
 
11. GUARANTEE
 
11.1 The Guarantee.  The Guarantor hereby irrevocably and unconditionally
guarantees to each of the Creditors and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Facility made by the
Lenders to the Borrowers and evidenced by the Note and all other amounts from
time to time owing to the Creditors by the Borrowers under this Agreement, under
the Note, under any Interest Rate Agreements and under any of the Security
Documents, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the “Guaranteed Obligations”).  The
Guarantor hereby further agrees that if the Borrowers shall fail to pay in full
when due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Guarantor will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
 
11.2 Obligations Unconditional.  The obligations of the Guarantor under Section
11.1 are absolute, unconditional and irrevocable, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Borrowers under this Agreement, the Note or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of, or security for, any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 11.2 that the obligations of the Guarantor hereunder shall be absolute,
unconditional and irrevocable, under any and all circumstances.  Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of the
Guarantor hereunder, which shall remain absolute, unconditional and irrevocable
as described above:
 
a)  
at any time or from time to time, without notice to the Guarantor, the time for
any performance of or compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;

 
b)  
any of the acts mentioned in any of the provisions of this Agreement or the Note
or any other agreement or instrument referred to herein or therein shall be done
or omitted;

 
c)  
the maturity of any of the Guaranteed Obligations shall be accelerated, or any
of the Guaranteed Obligations shall be modified, supplemented or amended in any
respect, or any right under this Agreement or the Note or any other agreement or
instrument referred to herein or therein shall be waived or any other guarantee
of any of the Guaranteed Obligations or any security therefor shall be released
or exchanged, in whole or in part, or otherwise dealt with; or

 
d)  
any lien or security interest granted to, or in favor of, the Security Trustee
or any Lender or Lenders as security for any of the Guaranteed Obligations shall
fail to be perfected.

 
The Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that any Agent or any
Lender exhaust any right, power or remedy or proceed against the Borrowers under
this Agreement or the Note or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
 
11.3 Reinstatement.  The obligations of the Guarantor under this Section 11
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrowers in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any Proceedings and the
Guarantor agrees that it will indemnify each Creditor on demand for all
reasonable costs and expenses (including, without limitation, fees of counsel)
incurred by such Creditor in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
 
11.4 Subrogation.  The Guarantor hereby irrevocably waives, but only until all
amounts payable hereunder by the Guarantor to the Creditors (or any of them)
have been paid in full, any and all rights to which any of them may be entitled
by operation of law or otherwise, upon making any payment hereunder to be
subrogated to the rights of the payee against the Borrowers with respect to such
payment or to be reimbursed, indemnified or exonerated by or to seek
contribution from the Borrowers in respect thereof.
 
11.5 Remedies.  The Guarantor agrees that, as between the Guarantor and the
Lenders, the obligations of the Borrowers under this Agreement and the Note may
be declared to be forthwith due and payable as provided in Section 8 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Section 8) for purposes of Section 11.1 notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Borrowers and that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Borrowers) shall forthwith become due and payable
by the Guarantor for purposes of Section 11.1.
 
11.6 Joint, Several and Solidary Liability.  The Guarantor's obligations and
liability under this Agreement shall be on a “solidary” or “joint and several”
basis along with the Borrowers to the same degree and extent as if the Guarantor
had been and/or will be a co-borrower, co-principal obligor and/or co-maker of
the Guaranteed Obligations.  In the event that there is more than one Guarantor
under this Agreement, or in the event that there are other guarantors, endorsers
or sureties of all or any portion of the Guaranteed Obligations, the Guarantor's
obligations and liability hereunder shall further be on a “solidary” or “joint
and several” basis along with such other guarantors, endorsers and/or sureties.
 
11.7 Continuing Guarantee.  The guarantee in this Section 11 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.
 
12. ASSIGNMENT
 
12.1 Assignment.  This Agreement shall be binding upon, and inure to the benefit
of, each of the Security Parties and each of the Creditors and their respective
successors and assigns, except that neither the Guarantor nor either of the
Borrowers may assign any of its respective rights or obligations hereunder
without the written consent of the Lenders.  Each Lender shall be entitled to
assign its rights and obligations under this Agreement or grant participation(s)
in the Facility to any subsidiary, holding company or other affiliate of such
Lender, to any subsidiary or other affiliate company of any thereof or, with the
consent of the Borrowers (except upon the occurrence and during the continuation
of an Event of Default, in which case the Borrowers' consent shall not be
required) and the Agents, in the case of the Borrowers such consent not to be
unreasonably withheld, to any other bank or financial institution (in a minimum
amount of not less than US$5,000,000), and such Lender shall forthwith give
notice of any such assignment or participation to the Borrowers and pay the
Facility Agent an assignment fee of $3,000 for each such assignment or
participation; provided, however, that any such assignment must be made pursuant
to an Assignment and Assumption Agreement.  Each of the Borrowers will take all
reasonable actions requested by the Agents or any Lender to effect such
assignment, including, without limitation, the execution of a written consent to
any Assignment and Assumption Agreement.  Notwithstanding any provision herein
to the contrary, each Lender may, without consulting with or obtaining consent
from either Security Party, at any time charge, assign or otherwise create
security in or over (whether by way of collateral or otherwise) all or any of
its rights under this Agreement, the Note or any Security Document to secure
obligations of that Lender including, without limitation, any charge, assignment
or other security to secure obligations to a federal reserve or central bank,
except that no such charge, assignment or security shall release a Lender from
any of its obligations under this Agreement, the Note or any Security Document
or substitute the beneficiary of the relevant charge, assignment or other
security for the Lender as a party to this Agreement, the Note or any Security
Document or require any payments to be made by a Security Party or grant to any
person any more extensive rights than those required to be made or granted to
the relevant Lender under this Agreement, the Note or any Security Document.
 
12.2 Register.  The Facility Agent, acting for this purpose as an agent of each
of the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption Agreement delivered to it and a register for the recordation of
the names and addresses of the Lenders and principal amount of the Facility
owing to each Lender pursuant to the terms hereof from time to time (the
“Register”).  The entries in the Register shall be conclusive, and the
Borrowers, the Facility Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by the Borrowers and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.  Upon
its receipt of a duly completed Assignment and Assumption Agreement executed by
an assigning Lender and an assignee, the assignment fee referred to above and
any written consent to such assignment required, the Facility Agent shall accept
such Assignment and Assumption Agreement and record the information contained
therein in the Register; provided that if either the assigning Lender or the
assignee shall have failed to make any payment required to be made by it
pursuant to this Agreement, the Facility Agent shall have no obligation to
accept such Assignment and Assumption Agreement and record the information
therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
 
13. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
 
13.1 Illegality.  In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof, a
Lender has a reasonable basis to conclude that it has become unlawful for any
Lender to maintain or give effect to its obligations as contemplated by this
Agreement, such Lender shall inform the Facility Agent and the Borrowers to that
effect, whereafter the liability of such Lender to make its Commitment available
shall forthwith cease and each of the Borrowers shall be required either to
repay to such Lender that portion of the Facility advanced by such Lender
immediately or, if such Lender so agrees, to repay such portion of the Facility
to the Lender on the last day of the calendar month in accordance with and
subject to the provisions of Section 13.8.  In any such event, but without
prejudice to the aforesaid obligations of each of the Borrowers to repay such
portion of the Facility, each of the Borrowers and the relevant Lender shall
negotiate in good faith with a view to agreeing on terms for making such portion
of the Facility available from another jurisdiction or otherwise restructuring
such portion of the Facility on a basis which is not unlawful.
 
13.2 Increased Costs.  If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental
or other authority, shall:
 
(i)  
subject any Lender to any Taxes with respect to its income from the Facility, or
any part thereof, or

 
(ii)  
change the basis of taxation to any Lender of payments of principal or interest
or any other payment due or to become due pursuant to this Agreement (other than
a change in the basis effected by the jurisdiction of organization of such
Lender, the jurisdiction of the principal place of business of such Lender, the
United States of America, the State or City of New York or any governmental
subdivision or other taxing authority having jurisdiction over such Lender
(unless such jurisdiction is asserted by reason of the activities of any
Security Party) or such other jurisdiction where the Facility may be payable),
or

 
(iii)  
impose, modify or deem applicable any reserve requirements or require the making
of any special deposits against or in respect of any assets or liabilities of,
deposits with or for the account of, or loans by, a Lender, or

 
(iv)  
impose on any Lender any other condition affecting the Facility or any part
thereof,

 
and the result of the foregoing is either to increase the cost to such Lender of
making available or maintaining its Commitment or any part thereof or to reduce
the amount of any payment received by such Lender, then and in any such case if
such increase or reduction in the opinion of such Lender materially affects the
interests of such Lender under or in connection with this Agreement:
 
(a) such Lender shall notify the Facility Agent and the Borrowers of the
happening of such event, and
 
(b) each of the Borrowers agrees forthwith upon demand to pay to such Lender
such amount as such Lender certifies to be necessary to compensate such Lender
for such additional cost or such reduction; provided however, that the foregoing
provisions shall not be applicable in the event that increased costs to the
Lender result from the exercise by the Lender of its right to assign its rights
or obligations under Section 12.
 
13.3 Nonavailability of Funds.  If the Facility Agent shall determine that, by
reason of circumstances affecting the London Interbank Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate, the Facility Agent shall give notice of such determination to
the Borrowers and the Lenders.  The Borrowers, the Facility Agent and the
Majority Lenders shall then negotiate in good faith in order to agree upon a
mutually satisfactory interest rate to be substituted for that which would
otherwise have applied under this Agreement.  If the Borrowers, the Facility
Agent and the Majority Lenders are unable to agree upon such a substituted
interest rate within thirty (30) days of the giving of such determination
notice, the Facility Agent shall set an interest rate to take effect at the
Facility Agent's direction, which rate shall be equal to the Margin plus the
cost to the Lenders (as certified by each Lender) of funding the Facility.
 
13.4 Market Disruption.  The following provisions of Sections 13.5 and 13.6
apply if:
 
(a)      the LIBOR Rate is not available for an Interest Period on the date of
determination of the LIBOR Rate; or
 
(b)          at least one (1) Banking Day before the start of an Interest
Period, the Lenders having Advances together amounting to 50% or more of the
Facility (or, if an Advance has not been made, Commitments amounting to 50% or
more of the total Commitments) notify the Facility Agent that the LIBOR Rate
fixed by the Facility Agent would not accurately reflect the cost to those
Lenders of funding their respective Advances (or any part thereof) during the
Interest Period.
 
13.5 Notification of Market Disruption.  The Facility Agent shall promptly
notify the Borrowers and each of the Lenders, stating the circumstances falling
within Section 13.4 which have caused its notice to be given (the
"Market-Disruption Notification"); provided, however, that the level of detail
of the Market-Disruption Notification shall be in the Facility Agent’s sole
discretion and the Market-Disruption Notification itself shall, absent manifest
error, be final, conclusive and binding on all parties hereto.
 
13.6 Alternative Rate of Interest During Market Disruption.  For so long as the
circumstances falling within Section 13.4 are continuing, the Facility Agent
shall, on behalf of the Lenders, negotiate with the Borrowers in good faith with
a view to modifying this Agreement to provide a substitute basis for determining
the rate of interest and if no such agreement can be reached by the Borrowers
and the Facility Agent prior to the expiry of the then current Interest Period,
the Facility Agent shall with the agreement of each Lender, for each one-month
period, set an interest rate representing the actual cost of funding of the
Lenders in Dollars of their respective Advances plus the Margin.  Such
alternative pricing agreed upon pursuant to this Section 13.6 shall be binding
on all parties hereto.  The procedure provided for by this Section 13.6 shall be
repeated if the relevant circumstances are continuing at the end of each such
one month period.
 
13.7 Lender's Certificate Conclusive.  A certificate or determination notice of
the Facility Agent or any Lender, as the case may be, as to any of the matters
referred to in this Section 13 shall, absent manifest error, be conclusive and
binding on each of the Borrowers.
 
13.8 Compensation for Losses.  Where any portion of the Facility is to be repaid
by the Borrowers pursuant to this Section 13, each of the Borrowers agrees
simultaneously with such repayment to pay to the relevant Lender all accrued
interest to the date of actual payment on the amount repaid and all other sums
then payable by the Borrowers to the relevant Lender pursuant to this Agreement,
together with such amounts as may be certified by the relevant Lender to be
necessary to compensate such Lender for any actual loss, premium or penalties
incurred or to be incurred thereby on account of funds borrowed to make, fund or
maintain its Commitment or such portion thereof for the remainder (if any) of
the then current calendar month, but otherwise without penalty or premium.
 
14. CURRENCY INDEMNITY
 
14.1 Currency Conversion.  If for the purpose of obtaining or enforcing a
judgment in any court in any country it becomes necessary to convert into any
other currency (the “judgment currency”) an amount due in Dollars under this
Agreement or the other Transaction Documents then the conversion shall be made,
in the discretion of the Facility Agent, at the rate of exchange prevailing
either on the date of default or on the day before the day on which the judgment
is given or the order for enforcement is made, as the case may be (the
“conversion date”), provided that the Facility Agent shall not be entitled to
recover under this section any amount in the judgment currency which exceeds at
the conversion date the amount in Dollars due under this Agreement, the Note
and/or the other Transaction Documents.
 
14.2 Change in Exchange Rate.  If there is a change in the rate of exchange
prevailing between the conversion date and the date of actual payment of the
amount due, the Borrowers shall pay such additional amounts (if any, but in any
event not a lesser amount) as may be necessary to ensure that the amount paid in
the judgment currency when converted at the rate of exchange prevailing on the
date of payment will produce the amount then due under this Agreement, the Note
and/or the other Transaction Documents in Dollars; any excess over the amount
due received or collected by the Lenders shall be remitted to the Borrowers.
 
14.3 Additional Debt Due.  Any amount due from the Borrowers under this
Section 14 shall be due as a separate debt and shall not be affected by judgment
being obtained for any other sums due under or in respect of this Agreement, the
Note and/or any of the Security Documents.
 
14.4 Rate of Exchange.  The term “rate of exchange” in this Section 14 means the
rate at which the Facility Agent in accordance with its normal practices is able
on the relevant date to purchase Dollars with the judgment currency and includes
any premium and costs of exchange payable in connection with such purchase.
 
15. FEES AND EXPENSES
 
15.1 Fees.  The Borrowers shall pay, for the account of the Lenders, a fee (the
“Commitment Fee”) equal to forty percent (40%) of the Margin payable quarterly
on the average daily undrawn portion of the Facility beginning on the Closing
Date.  The Borrowers shall also pay all fees in the Fee Letter.
 
15.2 Expenses.  Each of the Borrowers agrees, whether or not the transactions
hereby contemplated are consummated, on demand to pay, or reimburse the Agents
for their payment of, the reasonable expenses of the Agents and (after the
occurrence and during the continuance of an Event of Default) the Lenders
incident to said transactions (and in connection with any supplements,
amendments, waivers or consents relating thereto or incurred in connection with
the enforcement or defense of any of the Agents' and the Lenders' rights or
remedies with respect thereto or in the preservation of the Agents' and the
Lenders' priorities under the documentation executed and delivered in connection
therewith) including, without limitation, all reasonable costs and expenses of
preparation, negotiation, execution and administration of this Agreement and the
documents referred to herein, the reasonable fees and disbursements of the
Agents' counsel in connection therewith, as well as the reasonable fees and
expenses of any independent appraisers, surveyors, engineers and other
consultants retained by the Agents in connection with this transaction, all
reasonable costs and expenses, if any, in connection with the enforcement of
this Agreement and the other Transaction Documents and stamp and other similar
taxes, if any, incident to the execution and delivery of the documents
(including, without limitation, the other Transaction Documents) herein
contemplated and to hold the Agents and the Lenders free and harmless in
connection with any liability arising from the nonpayment of any such stamp or
other similar taxes.  Such taxes and, if any, interest and penalties related
thereto as may become payable after the date hereof shall be paid immediately by
the Borrowers to the Agents or the Lenders, as the case may be, when liability
therefor is no longer contested by such party or parties or reimbursed
immediately by the Borrowers to such party or parties after payment thereof (if
the Agents or the Lenders, at their sole discretion, chooses to make such
payment).
 
16. APPLICABLE LAW, JURISDICTION AND WAIVER
 
16.1 Applicable Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
 
16.2 Jurisdiction.  The Security Parties hereby irrevocably submit to the
jurisdiction of the courts of the State of New York and of the United States
District Court for the Southern District of New York in any action or proceeding
brought against it by any of the Lenders or the Agents under this Agreement or
under any document delivered hereunder and hereby irrevocably agrees that valid
service of summons or other legal process on it may be effected by serving a
copy of the summons and other legal process in any such action or proceeding on
either of the Security Parties by mailing or delivering the same by hand to the
relevant Security Party at the address indicated for notices in
Section 18.1.  The service, as herein provided, of such summons or other legal
process in any such action or proceeding shall be deemed personal service and
accepted by the relevant Security Party as such, and shall be legal and binding
upon the relevant Security Party for all the purposes of any such action or
proceeding.  Final judgment (a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of any indebtedness of the
relevant Security Party to the Lenders or the Agent) against the relevant
Security Party in any such legal action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment.  The Security
Parties will advise the Facility Agent promptly of any change of address for the
purpose of service of process.  Notwithstanding anything herein to the contrary,
the Lenders may bring any legal action or proceeding in any other appropriate
jurisdiction.
 
16.3 WAIVER OF IMMUNITY.  TO THE EXTENT THAT ANY OF THE SECURITY PARTIES HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY
LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR
REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH OF THE SECURITY PARTIES
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
 
16.4 WAIVER OF JURY TRIAL.  IT IS MUTUALLY AGREED BY AND AMONG EACH OF THE
SECURITY PARTIES AND EACH OF THE CREDITORS THAT EACH OF THEM HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
 
17. THE AGENTS
 
17.1 Appointment of Agents.  Each of the Lenders irrevocably appoints and
authorizes the Facility Agent to take such action as facility agent on its
behalf and to exercise such powers under this Agreement, the Note and the other
Transaction Documents as are delegated to the Facility Agent by the terms hereof
and thereof.  Neither the Facility Agent nor any of its directors, officers,
employees or agents shall be liable for any action taken or omitted to be taken
by it or them under this Agreement, the Note or the other Transaction Documents
or in connection therewith, except for its or their own gross negligence or
willful misconduct.
 
17.2 Appointment of Security Trustee.  Each of the Lenders irrevocably appoints,
designates and authorizes the Security Trustee to act as security trustee on its
behalf with regard to (i) the security, powers, rights, titles, benefits and
interests (both present and future) constituted by and conferred on the Lenders
or any of them or for the benefit thereof under or pursuant to this Agreement or
any of the other Transaction Documents (including, without limitation, the
benefit of all covenants, undertakings, representations, warranties and
obligations given, made or undertaken to any Lender in the Agreement or the
other Transaction Documents), (ii) all moneys, property and other assets paid or
transferred to or vested in any Lender or any agent of any Lender or received or
recovered by any Lender or any agent of any Lender pursuant to, or in connection
with, this Agreement or the other Transaction Documents whether from any
Security Party or any other person and (iii) all money, investments, property
and other assets at any time representing or deriving from any of the foregoing,
including all interest, income and other sums at any time received or receivable
by any Lender or any agent of any Lender in respect of the same (or any part
thereof).  The Security Trustee hereby accepts such appointment but shall have
no obligations under this Agreement, under the Note or under any of the Security
Documents except those expressly set forth herein and therein.
 
17.3 Distribution of Payments.  Whenever any payment is received by the Facility
Agent or the Security Trustee from the Borrowers or the Guarantor for the
account of the Lenders, or any of them, whether of principal or interest on the
Note, commissions, fees under Section 15 or otherwise, it will thereafter cause
to be distributed on the day of receipt if received before 10 a.m. London time,
or on the day after receipt if received thereafter, like funds relating to such
payment ratably to the Lenders according to their respective Commitments, in
each case to be applied according to the terms of this Agreement.  Unless the
Facility Agent or the Security Trustee, as the case may be, shall have received
notice from the Borrowers prior to the date when any payment is due hereunder
that the Borrowers will not make any payment on such date, the Facility Agent or
the Security Trustee may assume that the Borrowers have made such payment to the
Facility Agent or the Security Trustee, as the case may be, on the relevant date
and the Facility Agent or the Security Trustee may, in reliance upon such
assumption, make available to the Lenders on such date a corresponding amount
relating to such payment ratably to the Lenders according to their respective
Commitments.  If and to the extent that the Borrowers shall not have so made
such payment available to the Facility Agent or the Security Trustee, as the
case may be, the Lenders and the Borrowers (but without duplication) severally
agree to repay to the Facility Agent or the Security Trustee, as the case may
be, forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the Lenders
until the date such amount is repaid to the Facility Agent or the Security
Trustee, as the case may be, as calculated by the Facility Agent or Security
Trustee to reflect its cost of funds.
 
17.4 Holder of Interest in Note.  The Agents may treat each Lender as the holder
of all of the interest of such Lender in the Note.
 
17.5 No Duty to Examine, Etc.  The Agents shall not be under a duty to examine
or pass upon the validity, effectiveness or genuineness of any of this
Agreement, the other Transaction Documents or any instrument, document or
communication furnished pursuant to this Agreement or in connection therewith or
in connection with any other Transaction Document, and the Agents shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be.
 
17.6 Agents as Lenders.  With respect to that portion of the Facility made
available by it, each Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were not an Agent, and
the term “Lender” or “Lenders” shall include the Agent in its capacity as a
Lender.  Each Agent and its affiliates may accept deposits from, lend money to
and generally engage in any kind of business with, the Borrowers and the
Guarantor as if it were not an Agent.
 
17.7 Acts of the Agents.  Each Agent shall have duties and discretion, and shall
act as follows:
 
(a) Obligations of the Agents.  The obligations of each Agent under this
Agreement, the Note and the other Transaction Documents are only those expressly
set forth herein and therein;
 
(b) No Duty to Investigate.  No Agent shall at any time, unless requested to do
so by a Lender or Lenders, be under any duty to enquire whether an Event of
Default, or an event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred or to investigate the
performance of this Agreement, the Note or any Security Document by any Security
Party;
 
(c) Discretion of the Agents.  Each Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement and the other Transaction Documents, unless the Facility
Agent shall have been instructed by the Majority Lenders to exercise such rights
or to take or refrain from taking such action; provided, however, that no Agent
shall be required to take any action which exposes it to personal liability or
which is contrary to this Agreement or applicable law; and
 
(d) Instructions of Majority Lenders.  Each Agent shall in all cases be fully
protected in acting or refraining from acting under this Agreement or under any
other Transaction Document in accordance with the instructions of the Majority
Lenders, and any action taken or failure to act pursuant to such instructions
shall be binding on all of the Lenders.
 
17.8 Certain Amendments.  Neither this Agreement, the Note nor any of the
Security Documents nor any terms hereof or thereof may be amended unless such
amendment is approved by the Borrowers and the Majority Lenders, provided that
no such amendment shall, without the consent of each Lender affected thereby,
(i) reduce the interest rate or extend the time of payment of scheduled
principal payments or interest or fees on the Facility, or reduce the principal
amount of the Facility or any fees hereunder, (ii) increase or decrease the
Commitment of any Lender or subject any Lender to any additional obligation (it
being understood that a waiver of any Event of Default or any mandatory
repayment of the Facility shall not constitute a change in the terms of any
Commitment of any Lender), (iii) amend, modify or waive any provision of this
Section 17.8, (iv) amend the definition of Majority Lenders or any other
definition referred to in this Section 17.8, (v) consent to the assignment or
transfer by either of the Borrowers of any of its rights and obligations under
this Agreement, (vi) release any Security Party from any of its obligations
under any Security Document except as expressly provided herein or in such
Security Document or (vii) amend any provision relating to the maintenance of
collateral under Section 9.4.  All amendments approved by the Majority Lenders
under this Section 17.8 must be in writing and signed by the Borrowers and each
of the Lenders.  In the event that any Lender is unable to or refuses to sign an
amendment approved by the Majority Lenders hereunder, such Lender hereby
appoints the Agent as its Attorney-In-Fact for the purposes of signing such
amendment.  No provision of this Section 17 or any other provisions relating to
the Agent may be modified without the consent of the Agent.
 
17.9 Assumption re Event of Default.  Except as otherwise provided in
Section 17.15, the Facility Agent and the Security Trustee shall be entitled to
assume that no Event of Default, or event which with the giving of notice or
lapse of time, or both, would constitute an Event of Default, has occurred and
is continuing, unless it has been notified by any Security Party of such fact,
or has been notified by a Lender that such Lender considers that an Event of
Default or such an event (specifying in detail the nature thereof) has occurred
and is continuing.  In the event that either thereof shall have been notified by
any Security Party or any Lender in the manner set forth in the preceding
sentence of any Event of Default or of an event which with the giving of notice
or lapse of time, or both, would constitute an Event of Default, the Facility
Agent shall notify the Lenders and shall take action and assert such rights
under this Agreement, under the Note and under Security Documents as the
Majority Lenders shall request in writing.
 
17.10 Limitations of Liability.  No Agent or Lender shall be under any liability
or responsibility whatsoever:
 
(a) to any Security Party or any other person or entity as a consequence of any
failure or delay in performance by, or any breach by, any other Lenders or any
other person of any of its or their obligations under this Agreement or under
any Security Document;
 
(b) to any Lender or Lenders as a consequence of any failure or delay in
performance by, or any breach by, any Security Party of any of its respective
obligations under this Agreement or under the other Transaction Documents; or
 
(c) to any Lender or Lenders for any statements, representations or warranties
contained in this Agreement, in any Security Document or in any document or
instrument delivered in connection with the transaction hereby contemplated; or
for the validity, effectiveness, enforceability or sufficiency of this
Agreement, any other Transaction Document or any document or instrument
delivered in connection with the transactions hereby contemplated.
 
17.11 Indemnification of the Agent and Security Trustee.  The Lenders agree to
indemnify each Agent (to the extent not reimbursed by the Security Parties or
any thereof), pro rata according to the respective amounts of their Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including legal fees and expenses incurred in
investigating claims and defending itself against such liabilities) which may be
imposed on, incurred by or asserted against, such Agent in any way relating to
or arising out of this Agreement or any other Transaction Document, any action
taken or omitted by such Agent thereunder or the preparation, administration,
amendment or enforcement of, or waiver of any provision of, this Agreement or
any other Transaction Document, except that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the  gross
negligence or willful misconduct of either such Agent.
 
17.12 Consultation with Counsel.  Each of the Facility Agent and the Security
Trustee may consult with legal counsel selected by such Agent and shall not be
liable for any action taken, permitted or omitted by it in good faith in
accordance with the advice or opinion of such counsel.
 
17.13 Resignation.  Any Agent may resign at any time by giving sixty (60) days'
written notice thereof to the other Agents, the Lenders and the Borrowers.  Upon
any such resignation, the Lenders shall have the right to appoint a successor
Agent.  If no successor Agent shall have been so appointed by the Lenders and
shall have accepted such appointment within sixty (60) days after the retiring
Agent's giving notice of resignation, then the retiring Agent may, on behalf of
the Lenders, appoint a successor Agent which shall be a bank or trust company of
recognized standing.  The appointment of any successor Agent shall be subject to
the prior written consent of the Borrowers, such consent not to be unreasonably
withheld.  After any retiring Agent's resignation as Agent hereunder, the
provisions of this Section 17 shall continue in effect for its benefit with
respect to any actions taken or omitted by it while acting as Agent.
 
17.14 Representations of Lenders.  Each Lender represents and warrants to each
other Lender and the Agent that:
 
(a) in making its decision to enter into this Agreement and to make its
Commitment available hereunder, it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Security Parties, that it has made an independent credit judgment and that it
has not relied upon any statement, representation or warranty by any other
Lender or any Agent; and
 
(b) so long as any portion of its Commitment remains outstanding, it will
continue to make its own independent evaluation of the financial condition and
affairs of the Security Parties.
 
17.15 Notification of Event of Default.  The Facility Agent hereby undertakes to
promptly notify the Lenders, and the Lenders hereby promptly undertake to notify
the Facility Agent and the other Lenders, of the existence of any Event of
Default which shall have occurred and be continuing of which such party has
actual knowledge.
 
17.16 No Agency or Trusteeship if ING only Lender.  If at any time ING is the
only Lender, all references to the terms “Facility Agent” and “Security Trustee”
shall be deemed to be references to ING as Lender and not as agent or security
trustee.
 
18. NOTICES AND DEMANDS
 
18.1 Notices.  All notices, requests, demands and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to the Borrowers
or the Guarantor at the address or facsimile number set forth below and to the
Lenders and the Agents at their address and facsimile numbers set forth in
Schedule I or at such other address or facsimile numbers as such party may
hereafter specify for the purpose by notice to each other party hereto.  Each
such notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section and telephonic confirmation of receipt thereof is obtained or
(ii) if given by mail, prepaid overnight courier or any other means, when
received at the address specified in this Section or when delivery at such
address is refused.
 
If to the Borrowers or the Guarantor:
 
11 North Water Street, Suite 18290
 
Mobile, Alabama 36602
 
Facsimile No.:  (251)-243-9121
 
Attention: Chief Financial Officer
 
With a copy to
 
One Whitehall Street
 
New York, NY 10004
 
Facsimile No.:  (212) 514-5692
 
Attention:  Mr. Niels M. Johnsen
 
19. MISCELLANEOUS
 
19.1 Right of Set-Off.  Upon the occurrence and during the continuance of any
Event of Default, the Facility Agent and each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held (including, but not limited to, the
Reserve Deposit) and other indebtedness at any time owing by the Facility Agent
or such Lender to or for the credit or the account of the Borrowers or any other
Security Party against any and all of the obligations of the Borrowers or other
Security Party now or hereafter existing under the Transaction Documents,
irrespective of whether the Facility Agent or such Lender shall have made any
demand under this Agreement and although such Obligations may be unmatured.  The
Facility Agent and each Lender agrees promptly to notify the Borrowers after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.  The
rights of the Facility Agent and each Lender under this Section 19.1 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that the Facility Agent or such Lender may have.  The rights
of the Facility Agent and each Lender under this Section 19.1 shall terminate as
soon as the full amount of the Reserve Deposit is withdrawn.
 
19.2 Time of Essence.  Time is of the essence of this Agreement but no failure
or delay on the part of any Creditor to exercise any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise by any Creditor of any power or right hereunder preclude any other or
further exercise thereof or the exercise of any other power or right.  The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
 
19.3 Unenforceable, etc., Provisions - Effect.  In case any one or more of the
provisions contained in this Agreement or in the other Transaction Documents
would, if given effect, be invalid, illegal or unenforceable in any respect
under any law applicable in any relevant jurisdiction, said provision shall not
be enforceable against the relevant Security Party, but the validity, legality
and enforceability of the remaining provisions herein or therein contained shall
not in any way be affected or impaired thereby.
 
19.4 References.  References herein to Articles, Sections, Exhibits and
Schedules are to be construed as references to articles, sections of, exhibits
to, and schedules to, this Agreement or the other Transaction Documents as
applicable, unless the context otherwise requires.
 
19.5 Further Assurances.  Each of the Security Parties hereby agrees that if
this Agreement or any of the other Transaction Documents shall, in the
reasonable opinion of the Lenders, at any time be deemed by the Lenders for any
reason insufficient in whole or in part to carry out the true intent and spirit
hereof or thereof, it will execute or cause to be executed such other and
further assurances and documents as in the opinion of the Lenders may be
required in order to more effectively accomplish the purposes of this Agreement
and/or the other Transaction Documents.
 
19.6 Prior Agreements, Merger.  Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Creditors, on the other part, relating to the transactions contemplated hereby,
whether written or oral, are superseded by and merged into this Agreement and
the other agreements (the forms of which are exhibited hereto) to be executed
and delivered in connection herewith to which the Security Parties, the Agent,
the Security Trustee and/or the Lenders are parties, which alone fully and
completely express the agreements between the Security Parties, the Agents, and
the Lenders.
 
19.7 Entire Agreement; Amendments.  This Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to
an Assignment and Assumption Agreement.  Subject to Section 17.8, any provision
of this Agreement or any other Transaction Document may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrowers, the Agents, and the Majority Lenders.  This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts together shall constitute one and the same instrument.
 
19.8 Indemnification.  Neither any Creditor nor any of its directors, officers,
agents or employees shall be liable to any of the Security Parties for any
action taken or not taken thereby in connection herewith in the absence of its
own gross negligence or willful misconduct.  Each of the Borrowers and the
Guarantor hereby jointly and severally agree to indemnify the Creditors, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement, any actual or proposed use of
proceeds of the Facility hereunder, or any related transaction or claim;
provided that (i) no Indemnitee shall have the right to be indemnified hereunder
for such Indemnitee's own gross negligence or willful misconduct as determined
by a court of competent jurisdiction and (ii) to the extent permitted by law,
the Indemnitee shall provide the Security Parties with prompt notice of any such
investigative, administrative or judicial proceeding after the Indemnitee
becomes aware of such proceeding; provided, however, that the Indemnitee's
failure to provide such notice in a timely manner shall not relieve the Security
Parties of their obligations hereunder.
 
19.9 USA Patriot Act Notice; OFAC and Bank Secrecy Act.  The Facility Agent
hereby notifies each of the Security Parties that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26,
2001) (the “Patriot Act”), and the policies and practices of the Facility Agent,
each of the Creditors is required to obtain, verify and record certain
information and documentation that identifies each of the Security Parties,
which information includes the name and address of each of the Security Parties
and such other information that will allow the Creditors to identify each of the
Security Parties in accordance with the Patriot Act.  In addition, each of the
Security Parties shall: (a) ensure that no Person who owns a controlling
interest in or otherwise controls any of the Security Parties or any subsidiary
of any thereof is or shall be listed on the Specially Designated Nationals and
Blocked Person List or other similar lists maintained by the Office of Foreign
Assets Control (“OFAC”), the Department of the Treasury or included in any
Executive Orders; (b) not use or permit the use of the proceeds of the Facility
to violate any of the foreign asset control regulations of OFAC or any enabling
statute or Executive Order relating thereto; and (c) comply, and cause any of
its subsidiaries to comply, with all applicable Bank Secrecy Act laws and
regulations, as amended.
 
19.10 Counterparts; Electronic Delivery.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute one and the same instrument.  Delivery of
an executed counterpart of this Agreement by facsimile or electronic
transmission shall be deemed as effective as delivery of an originally executed
counterpart.  In the event that any of the Security Parties deliver an executed
counterpart of this Agreement by facsimile or electronic transmission, such
Security Parties shall also deliver an originally executed counterpart as soon
as practicable, but the failure of such Security Parties to deliver an
originally executed counterpart of this Agreement shall not affect the validity
or effectiveness of this Agreement.
 
19.11 Headings.  In this Agreement, Section headings are inserted for
convenience of reference only and shall not be taken into account in the
interpretation of this Agreement.
 
[Remainder of Page Intentionally Left Blank]
 

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IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the day and year first
above written.
 
DRY BULK AMERICAS LTD.,
as Borrower
 
By:_/s/ DAVID B DRAKE________________
Name: DAVID B. DRAKE
Title:   Attorney In Fact
   
DRY BULK AUSTRALIA LTD.,
as Borrower
 
By:_/s/ DAVID B. DRAKE      _________ ___
Name: DAVID B. DRAKE
Title:   Attorney In Fact
   
INTERNATIONAL SHIPHOLDING CORPORATION,
as Guarantor
 
By:_/s/ MANUEL G. ESTRADA            _____
Name: MANUEL G. ESTRADA
Title:  Vice President – CFO
   
ING BANK N.V., London branch,
as Facility Agent, Security Trustee and Lender
 
By:_/s/  ADAM BYRNE            ____ _____
Name: ADAM BYRNE
Title:  Director
   
By:_/s/  RORY HUSSEY           ____ _____
Name: RORY HUSSEY
Title:  Managing Director
 

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SCHEDULE I

LENDERS                                                                                                                     COMMITMENT

ING BANK N.V.
London branch
60 London Wall
London EC2M 5TQ
England
Facsimile No.:                                +44 207 767 7252
Telephone No.:+44 207 767 1112
Email:  ABF.Infra.Portfolio.Management@uk.ing.com
Attention:  Graham Wallden
 
All communications shall also include a copy to:
 
Facsimile No.:                                +44 207 767 7324
Telephone No.:+44 207 767 6522
Email: ian.tofts@uk.ing.com
Attention: Ian Tofts, Loan Operations
 
US$47,500,000

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SCHEDULE II

Approved Ship Brokers

R.S. Platou Shipbrokers
a.s.                                                                        Banchero-Costa
& C. s.p.a.
Haakon VII's gate
10                                                                                     2,
Via Pammatone
Oslo,
Norway                                                                                                16121
Genoa
Telephone No.: +47 23 11 20
00                                                                  Italy
Facsimile No.: +47 23 11 23
11                                                                    Telephone:    
+39 010 5631 1
                            Telefax:           +39 010 5631 215

Fearnleys A/S
Grev Wedels plass 9
Oslo, Norway
Telephone No.: +47 22 93 60 00
Facsimile No.: +47 22 93 61 50

H. Clarkson & Company
12 Camomile Street
London EC3A 7BP
England
Telephone No.: +44 207 334 0000
Facsimile No.: +44 207 283 5260

Braemar Shipbrokers Ltd.
35 Cosway Street
London NW1 5BT
England
Telephone No.: +44 207 535 2600
Facsimile No.: +44 207 535 2601

Jacq. Pierot Jr. & Sons, Inc. (USA)
29 Broadway
New York, NY 10006
Telephone No.: (212) 344 3840
Facsimile No.: (212) 943 6598

Barry Rogliano Salles
11 Boulevard Jean Mermoz
92200 Neuilly sur Seine
France
Telephone:     +33 1 41 92 12 34
Telefax:           +33 1 41 92 12 44

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SCHEDULE III

Security Party Liens as of the Closing Date

International Shipholding Corporation
 

None

 
Dry Bulk Americas Ltd.

None

Dry Bulk Australia Ltd.

Mortgage, Earnings Assignment and Insurances Assignment in favor of HSH Nordbank
AG on the vessel Bulk Australia.  (This loan to be repaid with this Facility
directly.)

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SCHEDULE IV

Security Party Indebtedness as of the Closing Date

International Shipholding Corporation
 
1.  
Guarantee of indebtedness in the amount of $17,333,333.33 to DnB NOR Bank ASA
and others, which indebtedness has a maturity date of September 26, 2015.

 
2.  
Guarantee of indebtedness in the amount of $34,990,000.00 to Deutsche
Schiffsbank AG and others, which indebtedness has a maturity date of September
30, 2013.

 
3.  
Guarantee of indebtedness of $13,265,000.00 to Liberty Community Ventures III,
L.L.C., which indebtedness has a maturity date of December 14, 2012.

 
4.  
Guarantee of indebtedness in the amount of $14,528,947.36 to Regions Bank, which
indebtedness has a maturity date of August 27, 2014.

 
5.  
Guarantee of indebtedness in the amount of $43,188,888.84 to Regions Bank, which
indebtedness has a maturity date of July 1, 2017.

 
6.  
Guarantee of indebtedness in the amount of Japanese Yen 4,847,375,002.00 to DnB
NOR Bank ASA and Deutsche Schiffsbank Aktiengesellschaft, which indebtedness has
a maturity date of September 15, 2020.

 
7.  
Counter guarantee of indebtedness in the amount of $4,702,000.00 to DnB NOR Bank
ASA, which indebtedness has a maturity date of September 2013.  (Basis delivery
of last, 10th, vessel scheduled for July 2011).

 
8.  
Guarantee of indebtedness in the amount up to $45,900,000.00 to DnB NOR Bank
ASA, which indebtedness has a maturity date of June, 2018.

 

 
Dry Bulk Australia Ltd.

1.  
Secured indebtedness in the amount of $43,935,689.95 under the Facility
Agreement dated November 28, 2005 between Dry Bulk Australia Ltd., Dry Bulk
Africa Ltd., Dry Bulk Cedar Ltd. and Dry Bulk Fern Ltd. as co-borrowers and HSH
Nordbank AG as facility agent.

 

Dry Bulk Americas Ltd.

None

Security Parties

International Shipholding Corporation, Dry Bulk Australia Ltd., Dry Bulk
Americas Ltd. as Co-Borrowers together with Enterprise Ship Company, Inc.,
Sulphur Carriers, Inc., Gulf South Shipping Pte Ltd., CG Railway, Inc., LCI
Shipholdings, Inc., Central Gulf Lines, Inc., East Gulf Shipholding, Inc., MPV,
Inc. and Waterman Steamship Corporation (all Co-Borrowers) under an Unsecured
Line of Credit Revolver of $35,000,000 with Regions Bank dated March 7, 2008, as
amended.