Exhibit 10.9

 

 

$800,000,000

CREDIT AGREEMENT

 

among

 

GENERAL MARITIME CORPORATION,

 

VARIOUS LENDERS

 

and

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

 

as Administrative Agent and Collateral Agent

 

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

 

Dated as of October 26, 2005

 

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

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

 

HSH NORDBANK AG,

 

and

 

DNB NOR BANK ASA, NEW YORK BRANCH

 

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

 

as Joint Lead Arrangers and Joint Book Runners

 

 

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

 

TABLE OF CONTENTS

 

SECTION 1.  Amount and Terms of Credit Facility

 

 

 

 

 

 

1.01  The Commitments

 

 

1.02  Minimum Amount of Each Borrowing; Limitation on Number of Borrowings

 

 

1.03  Notice of Borrowing

 

 

1.04  Disbursement of Funds

 

 

1.05  Notes

 

 

1.06  Pro Rata Borrowings

 

 

1.07  Interest

 

 

1.08  Interest Periods

 

 

1.09  Increased Costs, Illegality, etc.

 

 

1.10  Compensation

 

 

1.11  Change of Lending Office

 

 

1.12  Replacement of Lenders

 

 

1.13  Vessel Exchanges

 

 

 

 

 

SECTION 2.  Letters of Credit

 

 

 

 

 

2.01  Letters of Credit

 

 

2.02  Letter of Credit Requests; Minimum Stated Amount

 

 

2.03  Letter of Credit Participations

 

 

2.04  Agreement to Repay Letter of Credit Drawings

 

 

2.05  Increased Costs

 

 

 

 

 

SECTION 3.  Commitment Commission; Fees; Reductions of Commitment

 

 

 

 

 

3.01  Commitment Commission

 

 

3.02  Voluntary Termination of Unutilized Commitments

 

 

3.03  Mandatory Reduction of Commitments

 

 

 

 

 

SECTION 4.  Prepayments; Payments; Taxes

 

 

 

 

 

4.01  Voluntary Prepayments

 

 

4.02  Mandatory Repayments and Commitment Reductions

 

 

4.03  Method and Place of Payment

 

 

4.04  Net Payments; Taxes

 

 

 

 

 

SECTION 5.  Conditions Precedent to the Initial Borrowing Date

 

 

 

 

 

5.01  Effective Date; Notes

 

 

5.02  Fees, etc.

 

 

5.03  Opinions of Counsel

 

 

5.04  Corporate Documents; Proceedings; etc

 

 

5.05  Shareholders’ Agreements; Management Agreements; Debt Agreements;
Employment Agreements; Tax Sharing Agreements

 

 

5.06  Subsidiaries Guaranty

 

 

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

 

5.07  Pledge and Security Agreement

 

5.08  Solvency Certificate

 

5.09  Financial Statements

 

5.10  Material Adverse Change; Approvals

 

5.11  Litigation

 

5.12  Appraisals

 

5.13  Refinancing

 

5.14  Assignments of Earnings and Insurances

 

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

 

5.16  Environmental Laws

 

5.17  Assignment of the Refund Guarantees

 

 

 

SECTION 6.  Conditions Precedent to All Credit Events

 

 

 

6.01  No Default; Representations and Warranties

 

6.02  Notice of Borrowing

 

 

 

SECTION 7.  Representations, Warranties and Agreements

 

 

 

7.01  Corporate/Limited Liability Company/Limited Partnership Status

 

7.02  Corporate Power and Authority

 

7.03  No Violation

 

7.04  Governmental Approvals

 

7.05  Financial Statements; Financial Condition; Undisclosed Liabilities.

 

7.06  Litigation

 

7.07  True and Complete Disclosure

 

7.08  Use of Proceeds; Margin Regulations

 

7.09  Tax Returns and Payments

 

7.10  Compliance with ERISA
[a05-18130_1ex10d9.htm#a7_10ComplianceWithErisa_iSchedul_172557]

 

7.11  The Security Documents
[a05-18130_1ex10d9.htm#a7_11TheSecurityDocuments_AfterTh_172602]

 

7.12  Capitalization
[a05-18130_1ex10d9.htm#a7_12Capitalization_aOnTheInitial_172604]

 

7.13  Subsidiaries
[a05-18130_1ex10d9.htm#a7_13Subsidiaries_OnTheEffectiveD_172605]

 

7.14  Compliance with Statutes, etc.
[a05-18130_1ex10d9.htm#a7_14ComplianceWithStatutesEtc_Th_172606]

 

7.15  Investment Company Act
[a05-18130_1ex10d9.htm#a7_15InvestmentCompanyAct_Neither_172609]

 

7.16  Public Utility Holding Company Act
[a05-18130_1ex10d9.htm#a7_16PublicUtilityHoldingCompanyA_172610]

 

7.17  Pollution and Other Regulations
[a05-18130_1ex10d9.htm#a7_17PollutionAndOtherRegulations_172611]

 

7.18  Labor Relations
[a05-18130_1ex10d9.htm#a7_18LaborRelations_NeitherTheBor_172616]

 

7.19  Patents, Licenses, Franchises and Formulas
[a05-18130_1ex10d9.htm#a7_19PatentsLicensesFranchisesAnd_172617]

 

7.20  Indebtedness
[a05-18130_1ex10d9.htm#a7_20Indebtedness_SchedulevSetsFo_172618]

 

7.21  Insurance [a05-18130_1ex10d9.htm#a7_21Insurance_ScheduleviSetsFort_172619]

 

7.22  Concerning the Vessels
[a05-18130_1ex10d9.htm#a7_22ConcerningTheVessels_TheName_172621]

 

7.23  Citizenship
[a05-18130_1ex10d9.htm#a7_23Citizenship_TheBorrowerAndEa_172622]

 

7.24  Vessel Classification
[a05-18130_1ex10d9.htm#a7_24VesselClassification_EachMor_172624]

 

7.25  No Immunity
[a05-18130_1ex10d9.htm#a7_25NoImmunity_TheBorrowerDoesNo_172627]

 

7.26  Fees and Enforcement
[a05-18130_1ex10d9.htm#a7_26FeesAndEnforcement_NoFeesOrT_172628]

 

7.27  Form of Documentation
[a05-18130_1ex10d9.htm#a7_27FormofDocumentation_EachOfTh_172629]

 

 

ii

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

 

SECTION 8.  Affirmative Covenants
[a05-18130_1ex10d9.htm#Section8_AffirmativeCovenants_The_172631]

 

 

 

8.01  Information Covenants
[a05-18130_1ex10d9.htm#a8_01InformationCovenants_TheBorr_172636]

 

8.02  Books, Records and Inspections
[a05-18130_1ex10d9.htm#a8_02BooksRecordsAndInspections_T_172650]

 

8.03  Maintenance of Property; Insurance
[a05-18130_1ex10d9.htm#a8_03MaintenanceOfPropertyInsuran_172652]

 

8.04  Corporate Franchises
[a05-18130_1ex10d9.htm#a8_04CorporateFranchises_TheBorro_172654]

 

8.05  Compliance with Statutes, etc.
[a05-18130_1ex10d9.htm#a8_05ComplianceWithStatutesEtc_Th_172656]

 

8.06  Compliance with Environmental Laws
[a05-18130_1ex10d9.htm#a8_06ComplianceWithEnvironmentalL_172658]

 

8.07  ERISA [a05-18130_1ex10d9.htm#a8_07Erisa_AsSoonAsReasonablyPoss_172700]

 

8.08  End of Fiscal Years; Fiscal Quarters
[a05-18130_1ex10d9.htm#a8_08EndOfFiscalYearsFiscalQuarte_172704]

 

8.09  Performance of Obligations
[a05-18130_1ex10d9.htm#a8_09PerformanceOfObligations_The_172705]

 

8.10  Payment of Taxes
[a05-18130_1ex10d9.htm#a8_10PaymentOfTaxes_TheBorrowerWi_172707]

 

8.11  Further Assurances
[a05-18130_1ex10d9.htm#a8_11FurtherAssurances_aTheBorrow_172708]

 

8.12  Deposit of Earnings
[a05-18130_1ex10d9.htm#a8_12DepositOfEarnings_EachCredit_172712]

 

8.13  Ownership of Subsidiaries
[a05-18130_1ex10d9.htm#a8_13OwnershipOfSubsidiaries_aoth_172714]

 

8.14  Flag of Mortgaged Vessels
[a05-18130_1ex10d9.htm#a8_14FlagOfMortgagedVessels_aTheB_172716]

 

8.15  Vessel Delivery Dates
[a05-18130_1ex10d9.htm#a8_15VesselDeliveryDates_OnOrPrio_172717]

 

8.16  Assignment of Construction Contracts and Refund Guaranties
[a05-18130_1ex10d9.htm#a8_16AssignmentOfConstructionCont_172725]

 

 

 

SECTION 9.  Negative Covenants
[a05-18130_1ex10d9.htm#Section9_NegativeCovenants_TheBor_172732]

 

 

 

9.01  Liens [a05-18130_1ex10d9.htm#a9_01Liens_TheBorrowerWillNotAndW_172733]

 

9.02  Consolidation, Merger, Sale of Assets, etc.
[a05-18130_1ex10d9.htm#a9_02ConsolidationMergerSaleOfAss_172752]

 

9.03  Shareholder Payments
[a05-18130_1ex10d9.htm#a9_03ShareholderPayments_TheBorro_172757]

 

9.04  Indebtedness
[a05-18130_1ex10d9.htm#a9_04Indebtedness_aTheBorrowerWil_172802]

 

9.05  Advances, Investments and Loans
[a05-18130_1ex10d9.htm#a9_05AdvancesInvestmentsAndLoans__172804]

 

9.06  Transactions with Affiliates
[a05-18130_1ex10d9.htm#a9_06TransactionsWithAffiliates_T_172811]

 

9.07  Minimum Cash Balance
[a05-18130_1ex10d9.htm#a9_07MinimumCashBalance_TheBorrow_172816]

 

9.08  Maximum Leverage Ratio
[a05-18130_1ex10d9.htm#a9_08MaximumLeverageRatio_TheBorr_172817]

 

9.09  Minimum Consolidated Net Worth
[a05-18130_1ex10d9.htm#a9_09MinimumConsolidatedNetWorth__172819]

 

9.10  Collateral Maintenance
[a05-18130_1ex10d9.htm#a9_10CollateralMaintenance_TheBor_172821]

 

9.11  Limitation on Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc.
[a05-18130_1ex10d9.htm#a9_11LimitationOnModificationsOfC_172825]

 

9.12  Limitation on Certain Restrictions on Subsidiaries
[a05-18130_1ex10d9.htm#a9_12LimitationOnCertainRestricti_172828]

 

9.13  Limitation on Issuance of Capital Stock
[a05-18130_1ex10d9.htm#a9_13LimitationOnIssuanceOfCapita_172834]

 

9.14  Business [a05-18130_1ex10d9.htm#a9_14Business_TheBorrowerAndItsSu_172836]

 

 

 

SECTION 10.  Events of Default
[a05-18130_1ex10d9.htm#Section10_EventsOfDefault_UponThe_172838]

 

 

 

10.01  Payments [a05-18130_1ex10d9.htm#a10_01Payments_TheBorrowerShallid_172841]

 

10.02  Representations, etc.
[a05-18130_1ex10d9.htm#a10_02RepresentationsEtc_AnyRepre_172845]

 

10.03  Covenants
[a05-18130_1ex10d9.htm#a10_03Covenants_AnyCreditPartySha_172848]

 

10.04  Default Under Other Agreements
[a05-18130_1ex10d9.htm#a10_04DefaultUnderOtherAgreements_172850]

 

10.05  Bankruptcy, etc.
[a05-18130_1ex10d9.htm#a10_05BankruptcyEtc_TheBorrowerOr_172852]

 

10.06  ERISA [a05-18130_1ex10d9.htm#a10_06Erisa_aAnyPlanShallFailToSa_172853]

 

10.07  Security Documents
[a05-18130_1ex10d9.htm#a10_07SecurityDocuments_AtAnyTime_172857]

 

10.08  Subsidiaries Guaranty
[a05-18130_1ex10d9.htm#a10_08SubsidiariesGuaranty_AfterT_172859]

 

10.09  Judgments
[a05-18130_1ex10d9.htm#a10_09Judgments_OneOrMoreJudgment_172900]

 

 

iii

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

 

10.10  Change of Control
[a05-18130_1ex10d9.htm#a10_10ChangeOfControl_AChangeOfCo_172902]

 

 

 

SECTION 11.  Definitions and Accounting Terms
[a05-18130_1ex10d9.htm#Section11_DefinitionsAndAccountin_172923]

 

 

 

11.01  Defined Terms
[a05-18130_1ex10d9.htm#a11_01DefinedTerms_AsUsedInThisAg_172929]

 

 

 

SECTION 12.  Agency and Security Trustee Provisions
[a05-18130_1ex10d9.htm#Section12_AgencyAndSecurityTruste_173034]

 

 

 

12.01  Appointment
[a05-18130_1ex10d9.htm#a12_01Appointment_atheLendersHere_173035]

 

12.02  Nature of Duties
[a05-18130_1ex10d9.htm#a12_02NatureOfDuties_TheAgentsSha_173038]

 

12.03  Lack of Reliance on the Agents
[a05-18130_1ex10d9.htm#a12_03LackOfRelianceOnTheAgents_I_173039]

 

12.04  Certain Rights of the Agents
[a05-18130_1ex10d9.htm#a12_04CertainRightsOfTheAgents_If_173047]

 

12.05  Reliance [a05-18130_1ex10d9.htm#a12_05Reliance_EachOfTheAgentsSha_173049]

 

12.06  Indemnification
[a05-18130_1ex10d9.htm#a12_06Indemnification_ToTheExtent_173051]

 

12.07  The Administrative Agent in its Individual Capacity
[a05-18130_1ex10d9.htm#a12_07TheAdministrativeAgentInIts_173052]

 

12.08  Holders [a05-18130_1ex10d9.htm#a12_08Holders_TheAdministrativeAg_173058]

 

12.09  Resignation by the Administrative Agent
[a05-18130_1ex10d9.htm#a12_09ResignationByTheAdministrat_173059]

 

12.10  The Joint Lead Arrangers
[a05-18130_1ex10d9.htm#a12_10TheJointLeadArrangers_Notwi_173103]

 

 

 

SECTION 13.  Miscellaneous
[a05-18130_1ex10d9.htm#Section13_Miscellaneous__173107]

 

 

 

13.01  Payment of Expenses, etc.
[a05-18130_1ex10d9.htm#a13_01PaymentOfExpensesEtc_TheBor_173110]

 

13.02  Right of Setoff
[a05-18130_1ex10d9.htm#a13_02RightOfSetoff_InAdditionToA_173112]

 

13.03  Notices [a05-18130_1ex10d9.htm#a13_03Notices_ExceptAsOtherwiseEx_173115]

 

13.04  Benefit of Agreement
[a05-18130_1ex10d9.htm#a13_04BenefitOfAgreement_aThisAgr_173117]

 

13.05  No Waiver; Remedies Cumulative
[a05-18130_1ex10d9.htm#a13_05NoWaiverRemediesCumulative__173121]

 

13.06  Payments Pro Rata
[a05-18130_1ex10d9.htm#a13_06PaymentsProRata_aExceptAsOt_173122]

 

13.07  Calculations; Computations
[a05-18130_1ex10d9.htm#a13_07CalculationsComputations_aT_173126]

 

13.08  Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial
[a05-18130_1ex10d9.htm#a13_08GoverningLawSubmissionToJur_173128]

 

13.09  Counterparts
[a05-18130_1ex10d9.htm#a13_09Counterparts_ThisAgreementM_173134]

 

13.10  Effectiveness
[a05-18130_1ex10d9.htm#a13_10Effectiveness_ThisAgreement_173135]

 

13.11  Headings Descriptive
[a05-18130_1ex10d9.htm#a13_11HeadingsDescriptive_TheHead_173136]

 

13.12  Amendment or Waiver; etc.
[a05-18130_1ex10d9.htm#a13_12AmendmentOrWaiverEtc_aNeith_173149]

 

13.13  Survival [a05-18130_1ex10d9.htm#a13_13Survival_AllIndemnitiesSetF_173153]

 

13.14  Domicile of Loans
[a05-18130_1ex10d9.htm#a13_14DomicileOfLoans_EachLenderM_173154]

 

13.15  Limitation on Additional Amounts, etc.
[a05-18130_1ex10d9.htm#a13_15LimitationOnAdditionalAmoun_173155]

 

13.16  Confidentiality
[a05-18130_1ex10d9.htm#a13_16Confidentiality_aSubjectToT_173159]

 

13.17  Register [a05-18130_1ex10d9.htm#a13_17Register_TheBorrowerHerebyD_173200]

 

13.18  Judgment Currency
[a05-18130_1ex10d9.htm#a13_18JudgmentCurrency_IfForThePu_173203]

 

13.19  Language [a05-18130_1ex10d9.htm#a13_19Language_AllCorrespondenceI_173205]

 

13.20  Waiver of Immunity
[a05-18130_1ex10d9.htm#a13_20WaiverOfImmunity_TheBorrowe_173206]

 

13.21  USA PATRIOT Act Notice
[a05-18130_1ex10d9.htm#a13_21UsaPatriotActNotice_EachLen_173209]

 

 

SCHEDULE I

 

-

 

Commitments

 

 

SCHEDULE II

 

-

 

Lender Addresses

 

SCHEDULE III

 

-

 

Mortgaged Vessels

 

SCHEDULE IV

 

-

 

Existing Liens

 

iv

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

 

SCHEDULE V

 

-

 

Indebtedness

SCHEDULE VI

 

-

 

Insurance

SCHEDULE VII

 

-

 

ERISA

SCHEDULE VIII

 

-

 

Subsidiaries

SCHEDULE IX

 

-

 

Capitalization

SCHEDULE X

 

-

 

Approved Classification Societies

SCHEDULE XI

 

-

 

Existing Investments

SCHEDULE XII

 

-

 

Existing Letters of Credit

SCHEDULE XIII

 

-

 

Non-Collateral Vessels

 

 

 

 

 

EXHIBIT A

 

-

 

Notice of Borrowing

EXHIBIT B

 

-

 

Note

EXHIBIT C-1

 

-

 

Opinion of Kramer Levin Naftalis & Frankel LLP, New York counsel to the Borrower
and its Subsidiaries

EXHIBIT C-2

 

-

 

Opinion of Constantine P. Georgiopoulos, New York maritime counsel to the
Borrower and its Subsidiaries

EXHIBIT C-3

 

-

 

Form of Opinion of George E. Henries, Esq., Liberian counsel to the Borrower and
its Subsidiaries

EXHIBIT C-4

 

-

 

Form of Opinion of Dennis J. Reeder, Esq., Marshall Islands counsel to the
Borrower and its Subsidiaries

EXHIBIT C-5

 

-

 

Form of Opinion of Cains Advocates Limited, Isle of Man counsel to the Borrower
and its Subsidiaries

EXHIBIT D

 

-

 

Officer’s Certificate

EXHIBIT E

 

-

 

Subsidiaries Guaranty

EXHIBIT F

 

-

 

Pledge Agreement

EXHIBIT G

 

-

 

Assignment of Earnings

EXHIBIT H

 

-

 

Assignment of Insurances

EXHIBIT I-1

 

-

 

Form of Marshall Islands Vessel Mortgage

EXHIBIT I-2

 

-

 

Form of Liberian Vessel Mortgage

EXHIBIT J

 

-

 

Letter of Credit Request

EXHIBIT K

 

-

 

Solvency Certificate

EXHIBIT L

 

-

 

Assignment and Assumption Agreement

EXHIBIT M

 

-

 

Form of Compliance Certificate

EXHIBIT N

 

-

 

Subordination Provisions

EXHIBIT O

 

-

 

Assignment of Construction Contract

EXHIBIT P

 

-

 

Assignment of Refund Guaranty

EXHIBIT Q

 

-

 

Consent to Assignment of Construction Contract

 

v

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

 

CREDIT AGREEMENT, dated as of October 26, 2005, among GENERAL MARITIME
CORPORATION, a Marshall Islands corporation (the “Borrower”), the Lenders party
hereto from time to time, and NORDEA BANK FINLAND PLC, NEW YORK BRANCH, as
Administrative Agent (in such capacity, the “Administrative Agent”) and as
Collateral Agent under the Security Documents (in such capacity, the “Collateral
Agent”). All capitalized terms used herein and defined in Section 11 are used
herein as therein defined.

 

W I T N E S S E T H:

 

WHEREAS, subject to and upon the terms and conditions herein set forth, the
Lenders are willing to make available to the Borrower the credit facility
provided for herein;

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1.  Amount and Terms of Credit Facility.

 

1.01  The Commitments.  Subject to and upon the terms and conditions set forth
herein, each Lender severally agrees to make at any time on or after the Initial
Borrowing Date and prior to the Maturity Date a revolving loan or revolving
loans (each, a “Loan” and, collectively, the “Loans”) to the Borrower, which
Loans (i) shall bear interest in accordance with Section 1.07, (ii) shall be
denominated in Dollars, (iii) may be repaid and reborrowed in accordance with
the provisions hereof, (iv) shall not exceed for any Lender at any time that
aggregate principal amount outstanding which, when added to such Lender’s
Percentage of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Loans) at such time, equals the Available
Commitment of such Lender at such time and (v) shall not exceed for all Lenders
at any time that aggregate principal amount outstanding which, when added to the
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Loans) at such time, equals the Total Available
Commitment at such time.

 

1.02  Minimum Amount of Each Borrowing; Limitation on Number of Borrowings. 
(a)  The aggregate principal amount of each Borrowing of Loans shall not be less
than the Minimum Borrowing Amount.

 

(b)           More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than six Borrowings of Loans subject to
different Interest Periods.

 

1.03  Notice of Borrowing.  (a)  Whenever the Borrower desires to make a
Borrowing hereunder, it shall give the Administrative Agent at its Notice Office
at least three Business Days’ prior written notice of each Loan to be made
hereunder, provided that any such notice shall be deemed to have been given on a
certain day only if given before 11:00 A.M. (New York time).  Each such written
notice (each a “Notice of Borrowing”), except as otherwise expressly provided in
Section 1.09, shall be irrevocable and shall be given by the Borrower in the
form of Exhibit A, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrowing (which shall be a Business Day), (iii) the initial
Interest Period to be applicable thereto and (iv) to which account

 

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

 

the proceeds of such Loans are to be deposited.  The Administrative Agent shall
promptly give each Lender which is required to make Loans, notice of such
proposed Borrowing, of such Lender’s proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.

 

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

 

1.04  Disbursement of Funds.  Except as otherwise specifically provided in the
immediately succeeding sentence, no later than 12:00 Noon (New York time) on the
date specified in each Notice of Borrowing, each Lender with a Commitment will
make available its pro rata portion of each such Borrowing requested to be made
on such date.  All such amounts shall be made available in Dollars and in
immediately available funds at the Payment Office of the Administrative Agent
and the Administrative Agent will make available to the Borrower (prior to
1:00 P.M. (New York Time) on such day to the extent of funds actually received
by the Administrative Agent prior to 12:00 Noon (New York Time) on such day) at
the Payment Office, in the account specified in the applicable Notice of
Borrowing, the aggregate of the amounts so made available by the Lenders. Unless
the Administrative Agent shall have been notified by any Lender prior to the
date of Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender’s portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount.  If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender.  If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent.  The Administrative Agent
shall also be entitled to recover on demand from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.07.  Nothing in this Section 1.04 shall be
deemed to relieve any Lender from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.

 

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

 

(b)           Each Note shall (i) be executed by the Borrower, (ii) be payable
to the order of such Lender that has requested a Note and be dated the Initial
Borrowing Date (or, in the case of Notes issued after the Initial Borrowing
Date, be dated the date of the issuance thereof), (iii) be in a stated principal
amount equal to the Commitment of such Lender and be payable in the principal
amount of the Loans evidenced thereby, (iv) mature on the Maturity Date,
(v) bear interest as provided in Section 1.07 in respect of the Loans evidenced
thereby, (vi) be subject to voluntary prepayment and mandatory repayment as
provided in Sections 4.01 and 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.

 

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

 

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

 

1.06  Pro Rata Borrowings.  All Borrowings of Loans under this Agreement shall
be incurred from the Lenders pro rata on the basis of their Commitments.  It is
understood that no Lender shall be responsible for any default by any other
Lender of its obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.

 

1.07  Interest.  (a)  The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Loan from the date the proceeds thereof are made
available to the

 

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Borrower until the maturity (whether by acceleration or otherwise) of such Loan
at a rate per annum which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Margin plus the Eurodollar Rate for such
Interest Period.

 

(b)           Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to 2% per annum in
excess of the rate then borne by such Loans (or, if such overdue amount is not
interest or principal in respect of a Loan, 2.50% per annum in excess of the
Base Rate as in effect from time to time), in each case with such interest to be
payable on demand.

 

(c)           Accrued and unpaid interest shall be payable in respect of each
Loan, on the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on each date occurring at
three month intervals after the first day of such Interest Period, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.

 

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

 

1.08  Interest Periods.  At the time the Borrower gives any Notice of Borrowing
in respect of the making of any Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Loan (in the case of any subsequent Interest
Period), it shall have the right to elect, by giving the Administrative Agent
notice thereof, the interest period (each an “Interest Period”) applicable to
such Loan, which Interest Period shall, at the option of the Borrower, be a one,
three or six month period or, to the extent agreed to by all Lenders with
Available Commitments, a nine or twelve-month period; provided that:

 

(i)            all Loans comprising a Borrowing shall at all times have the same
Interest Period;

 

(ii)           the initial Interest Period for any Loan shall commence on the
date of Borrowing of such Loan and each Interest Period occurring thereafter in
respect of such Loan shall commence on the day on which the immediately
preceding Interest Period applicable thereto expires;

 

(iii)          if any Interest Period relating to a Loan begins on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;

 

(iv)          if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the first succeeding
Business Day; provided, however, that if any Interest Period for a Loan would
otherwise expire on a day which is not a Business Day but is a day of the month
after which no further Business

 

4

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Day occurs in such month, such Interest Period shall expire on the immediately
preceding Business Day;

 

(v)           no Interest Period longer than one month may be selected at any
time when an Event of Default (or, if the Administrative Agent or the Required
Lenders have determined that such an election at such time would be
disadvantageous to the Lenders, a Default) has occurred and is continuing;

 

(vi)          no Interest Period in respect of any Borrowing of any Loans shall
be selected which extends beyond the Maturity Date;

 

(vii)         the selection of Interest Periods shall be subject to the
provisions of Section 1.02(b); and

 

(viii)        the initial Interest Period for all Loans incurred prior to
December 31, 2005 shall be for a period of one month.

 

If upon the expiration of any Interest Period applicable to a Borrowing, the
Borrower has failed to elect a new Interest Period to be applicable to such
Loans as provided above, the Borrower shall be deemed to have elected a one
month Interest Period to be applicable to such Loans effective as of the
expiration date of such current Interest Period.

 

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

 

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

 

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

 

5

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Effective Date affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market; or

 

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

 

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the Lenders).  Thereafter (x) in the
case of clause (i) above, any Notice of Borrowing given by the Borrower with
respect to any affected Loans which have not yet been incurred shall be deemed
rescinded by the Borrower and the Total Unutilized Commitment shall thereafter
not be available to be borrowed hereunder, and the rate of interest applicable
to any affected Loans then outstanding shall be the Base Rate, as in effect from
time to time, plus the Applicable Margin as in effect from time to time minus
1.00%, from the date such notice is delivered to the Borrower and thereafter
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, (y) in the case of clause (ii) above, the Borrower
agrees, subject to the provisions of Section 1.11 and Section 13.15 (to the
extent applicable), to pay to such Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable good
faith discretion shall determine) as shall be required to compensate such Lender
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing in reasonable detail the basis for and the calculation thereof,
submitted to the Borrower by such Lender in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties hereto) and (z) in
the case of clause (iii) above, and subject to Section 1.11, such Lender shall
so notify the Administrative Agent and the Borrower (and the Administrative
Agent shall promptly give notice thereof to the other Lenders) and thereafter
(A) except in the case of an event of the type described in clause (iii)(z)
above, the Commitment of such Lender shall be permanently reduced by an amount
sufficient to alleviate such circumstance arising pursuant to clause (iii)(x) or
(y) above, or shall be terminated in its entirety if all of such Lender’s Loans
are so affected, and the Borrower shall prepay in full the affected Loans of
such Lender, together with accrued interest thereon and, in the event of a
termination of such Lender’s Commitment, any Commitment Commission which may be
due to such Lender under this Agreement (and, in the event all of such Lender’s
Loans are being repaid, any other amounts which may be owing to such Lender
hereunder (including, without limitation, any accrued and unpaid interest)), on
either the last day of the then current Interest Period applicable to each such
affected Loan (if such Lender may lawfully continue to maintain and fund such
Loans) or immediately (if such Lender may not lawfully continue to maintain and
fund such Loans to such day) and (B) in the case of an event of the type
described in clause (iii)(z) above, the Commitment of such Lender shall be
terminated in its entirety and the Borrower shall pay to such Lender any accrued
and unpaid Commitment Commission which may be due to such Lender under this
Agreement, and all outstanding Loans of such Lender shall, from the date such
notice is delivered to the

 

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Borrower and thereafter until such time as the Administrative Agent or such
Lender shall notify the Borrower that the circumstances giving rise to the
operation of clause (iii)(z) above with respect to such Lender no longer exist,
bear interest at a rate equal to the Base Rate, as in effect from time to time,
it being understood that, notwithstanding anything to the contrary in this
Agreement, to the extent any repayment of Loans of any Lender affected by
circumstances described in clause (iii)(z) above are repaid prior to receipt by
the Borrower of the notice described above with respect to the elimination of
such circumstances giving rise to the operation of clause (iii)(z) above with
respect to such Lender, any amount of the Unutilized Commitment of such Lender
which may otherwise result from such repayment shall be deemed permanently
reduced upon the effectiveness of such repayment.  The Administrative Agent and
each Lender (to the extent it continues to be a Lender hereunder) agree that if
any of them gives notice to the Borrower of any of the events described in
clause (i), (ii) or (iii) above, it shall promptly notify the Borrower and, in
the case of any such Lender, the Administrative Agent, if such event ceases to
exist.  If any such event described in clause (iii) above ceases to exist as to
a Lender (to the extent it continues at such time to be a Lender hereunder), the
obligations of such Lender to make Loans on the terms and conditions contained
herein shall to the extent of such Lender’s outstanding Loans and Commitments as
in effect at such time, be immediately reinstated.

 

(b)           If any Lender in good faith determines that after the Effective
Date the introduction of or effectiveness of or any change in any applicable law
or governmental rule, regulation, order, guideline, directive or request
(whether or not having the force of law) concerning capital adequacy, or any
change in interpretation or administration thereof by the NAIC or any
governmental authority, central bank or comparable agency will have the effect
of increasing the amount of capital required or requested to be maintained by
such Lender, or any corporation controlling such Lender, based on the existence
of such Lender’s Commitments hereunder or its obligations hereunder, then the
Borrower agrees, subject to the provisions of Section 13.15 (to the extent
applicable), to pay to such Lender, upon its written demand therefor, such
additional amounts as shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other corporation or
the reduction in the rate of return to such Lender or such other corporation as
a result of such increase of capital.  In determining such additional amounts,
each Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, provided that such Lender’s
determination of compensation owing under this Section 1.09(b) shall, absent
manifest error, but subject to the provisions of Section 13.15 (to the extent
applicable), be final and conclusive and binding on all the parties hereto. 
Each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 1.09(b), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for and
calculation of such additional amounts.

 

1.10  Compensation.  The Borrower agrees, subject to the provisions of
Section 13.15 (to the extent applicable), to compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting and the calculation of such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation, any such loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Loans but excluding
any loss of anticipated profits) which such Lender may sustain in respect of
Loans made to the Borrower:  (i) if for any reason (other than a default by such
Lender or the Administrative Agent) a

 

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Borrowing of Loans does not occur on a date specified therefor in a Notice of
Borrowing (whether or not withdrawn by the Borrower or deemed withdrawn pursuant
to Section 1.09(a)); (ii) if any prepayment or repayment (including any
prepayment or repayment made pursuant to Section 1.09(a), Section 4.01 or
Section 4.02 or as a result of an acceleration of the Loans pursuant to
Section 10) of any of its Loans, or assignment of its Loans pursuant to
Section 1.12, occurs on a date which is not the last day of an Interest Period
with respect thereto; (iii) if any prepayment of any of its Loans is not made on
any date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of any other Default or Event of Default arising as a result of the
Borrower’s failure to repay Loans or make payment on any Note held by such
Lender when required by the terms of this Agreement.

 

1.11  Change of Lending Office.  Each Lender agrees that on the occurrence of
any event giving rise to the operation of Section 1.09(a)(ii) or (iii),
Section 1.09(b) or Section 4.04 with respect to such Lender, it will, if
requested by the Borrower, use reasonable good faith efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section.  Nothing
in this Section 1.11 shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender provided in Section 1.09 and Section 4.04.

 

1.12  Replacement of Lenders.  (x)  If any Lender becomes a Defaulting Lender or
otherwise defaults in its obligations to make Loans, (y) upon the occurrence of
any event giving rise to the operation of Section 1.09(a)(ii) or (iii),
Section 1.09(b) or Section 4.04 with respect to any Lender which results in such
Lender charging to the Borrower increased costs in excess of those being
generally charged by the other Lenders, or (z) as provided in
Section 13.12(b) in the case of certain refusals by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders, the Borrower
shall have the right, if no Default or Event of Default will exist immediately
after giving effect to the respective replacement, to replace such Lender (the
“Replaced Lender”) with one or more other Eligible Transferee or Eligible
Transferees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the “Replacement Lender”) reasonably acceptable
to the Administrative Agent; provided that:

 

(i)            at the time of any replacement pursuant to this Section 1.12, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to
said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans of the Replaced Lender and, in connection therewith, shall pay to the
Replaced Lender in respect thereof an amount equal to the sum (without
duplication) of (x) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, and (y) an amount
equal to all accrued, but unpaid, Commitment Commission owing to the Replaced
Lender pursuant to Section 3.01; and

 

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(ii)           all obligations of the Borrower due and owing to the Replaced
Lender at such time (other than those specifically described in clause (i) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid shall be paid in full to such Replaced Lender concurrently with such
replacement. 

 

Upon the execution of the respective Assignment and Assumption Agreement, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to (i) the Replacement Lender of
the appropriate Note or Notes executed by the Borrower, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.09, 1.10, 2.05,
4.04, 13.01 and 13.06), which shall survive as to such Replaced Lender and
(ii) if so requested by the Borrower, the Replaced Lender shall deliver all
Notes in its possession to the Borrower.

 

1.13  Vessel Exchanges.  Upon the completion of a Vessel Exchange in respect of
a Mortgaged Vessel or a Vessel subject to a Construction Contract with respect
to which the Additional Blocked Commitment has been increased pursuant to
Section 4.02(c) or Section 4.02(d), the Additional Blocked Commitment shall be
decreased by an amount equal to the amount by which the Additional Blocked
Commitment was increased in respect of such Mortgaged Vessel or Vessel, as the
case may be, pursuant to Section 4.02(c) or Section 4.02(d), as the case may be.

 

SECTION 2.  Letters of Credit

 

2.01  Letters of Credit.  (a)  Subject to and upon the terms and conditions
herein set forth, the Borrower may request that any Issuing Lender issue, at any
time on and after the Initial Borrowing Date and prior to the 10th day prior to
the Maturity Date, for the account of the Borrower, irrevocable sight standby
letters of credit, in a form customarily used by such Issuing Lender or in such
other form as has been approved by such Issuing Lender (each such letter of
credit, a “Letter of Credit”).  All Letters of Credit shall be denominated in
Dollars and shall be issued on a sight draft basis.

 

(b)           Subject to the terms and conditions contained herein, each Issuing
Lender hereby agrees that it will, at any time and from time to time on or after
the Initial Borrowing Date and prior to the 60th day prior to the Maturity Date,
following its receipt of the respective Letter of Credit Request, issue for the
account of the Borrower one or more Letters of Credit in support of such
obligations as are reasonably acceptable to the Issuing Lender and as are
permitted to remain outstanding without giving rise to a Default or Event of
Default hereunder, provided that the respective Issuing Lender shall be under no
obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:

 

(i)            any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing Lender
from issuing such Letter of Credit or any requirement of law applicable to such
Issuing Lender or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over such Issuing Lender
shall prohibit, or request that such

 

9

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Issuing Lender refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon such Issuing Lender with
respect to such Letter of Credit any restriction or reserve or capital
requirement (for which such Issuing Lender is not otherwise compensated) not in
effect on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable, in effect or known to such Issuing Lender as of the date hereof
and which such Issuing Lender in good faith deems material to it; or

 

(ii)           such Issuing Lender shall have received notice from any Lender
prior to the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.02(b); or

 

(iii)          a Lender Default exists, unless such Issuing Lender has entered
into arrangements satisfactory to it and the Borrower to eliminate such Issuing
Lender’s risk with respect to the participation in Letters of Credit of any
Defaulting Lender(s), including by cash collateralizing any such Defaulting
Lender’s (or Defaulting Lenders’) Percentage (or Percentages) of the Letter of
Credit Outstandings.

 

(c)           Notwithstanding anything to the contrary contained in this
Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which,
when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid on the date of, and prior to the issuance of, the respective
Letter of Credit) at such time would exceed either (x) $50,000,000 or (y) when
added to the aggregate principal amount of all Loans then outstanding, an amount
equal to the Total Available Commitment at such time, and (ii) each Letter of
Credit shall by its terms terminate on or before the earlier of (A) the date
which occurs 12 months after the date of the issuance thereof (although any such
Letter of Credit shall be extendible for successive periods of up to 12 months,
but, in each case, not beyond the twentieth Business Day prior to the Maturity
Date, on terms acceptable to the respective Issuing Lender) and (B) twenty
Business Days prior to the Maturity Date.

 

(d)           Schedule X contains a description of the standby letters of credit
that were issued pursuant to the Existing Credit Agreement for the account of
the Borrower prior to the Initial Borrowing Date and which remain outstanding on
the Initial Borrowing Date (and setting forth, with respect to each such letter
of credit, (i) the name of the issuing lender, (ii) the letter of credit number,
(iii) the name of the account party, (iv) the stated amount (which shall be in
Dollars), (v) the name of the beneficiary and (vi) the expiry date.  Each such
letter of credit, including any extension or renewal thereof in accordance with
the terms thereof and hereof (each, as amended from time to time in accordance
with the terms thereof and hereof, an “Existing Letter of Credit”) shall
constitute a “Letter of Credit” for all purposes of this Agreement and shall be
deemed issued on the Initial Borrowing Date.

 

2.02  Letter of Credit Requests; Minimum Stated Amount(a)  Whenever the Borrower
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Issuing Lender at least five Business
Days’ (or such shorter period as is acceptable to the respective Issuing Lender)
written notice prior to the proposed date of issuance (which shall be a Business
Day).  Each notice shall be substantially in the form of Exhibit J (each a
“Letter of Credit Request”).

 

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(b)           The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of,
Section 2.01(c).  Unless the respective Issuing Lender determines that, or has
received notice from any Lender before it issues a Letter of Credit that one or
more of the conditions specified in Section 6 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(c), then such
Issuing Lender shall issue the requested Letter of Credit for the account of the
Borrower in accordance with such Issuing Lender’s usual and customary practices.

 

(c)           The initial Stated Amount of each Letter of Credit shall not be
less than $20,000 or such lesser amount as is acceptable to the respective
Issuing Lender.

 

2.03  Letter of Credit Participations(a)  Immediately upon the issuance by any
Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed to
have sold and transferred to each Lender with a Commitment, other than such
Issuing Lender (each such Lender, in its capacity under this Section 2.03, a
“Participant”), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant’s Percentage, in such Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto, and any security therefor or guaranty pertaining thereto.  Upon any
change in the Commitments or Percentages of the Lenders pursuant to Sections
1.12 or 13.04, it is hereby agreed that, with respect to all outstanding Letters
of Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.03 to reflect the new Percentages of
the assignor and assignee Lender or of all Lenders with Commitments, as the case
may be.

 

(b)           In determining whether to pay under any Letter of Credit, such
Issuing Lender shall have no obligation relative to the other Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit.  Subject to
the provisions of the immediately preceding sentence, any action taken or
omitted to be taken by any Issuing Lender under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, as determined by a court of competent jurisdiction, shall not create
for such Issuing Lender any resulting liability to any Credit Party or any
Lender.

 

(c)           In the event that any Issuing Lender makes any payment under any
Letter of Credit issued by it and the Borrower shall not have reimbursed such
amount in full to such Issuing Lender pursuant to Section 2.04(a), such Issuing
Lender shall promptly notify the Administrative Agent, which shall promptly
notify each Participant, of such failure, and each Participant shall promptly
and unconditionally pay to the Administrative Agent for the account of such
Issuing Lender the amount of such Participant’s Percentage (as relates to the
respective Letter of Credit) of such unreimbursed payment in Dollars and in same
day funds.  If the Administrative Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to the
Administrative Agent at the Payment Office for the account of such Issuing
Lender in Dollars such Participant’s Percentage (as relates to the respective
Letter of Credit) of

 

11

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the amount of such payment on such Business Day in same day funds.  If and to
the extent such Participant shall not have so made its Percentage of the amount
of such payment available to the Administrative Agent for the account of such
Issuing Lender, such Participant agrees to pay to the Administrative Agent for
the account of such Issuing Lender, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent for the account of such Issuing Lender at the
overnight Federal Funds Rate.  The failure of any Participant to make available
to the Administrative Agent for the account of such Issuing Lender its
Percentage of any payment under any Letter of Credit issued by it shall not
relieve any other Participant of its obligation hereunder to make available to
the Administrative Agent for the account of such Issuing Lender its Percentage
of any such Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent for the account of such Issuing
Lender such other Participant’s Percentage of any such payment.

 

(d)           Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which the Administrative Agent has received (for the account of
any such Issuing Lender) any payments from the Participants pursuant to clause
(c) above, such Issuing Lender shall forward such payment to the Administrative
Agent, which in turn shall distribute to each Participant which has paid its
Percentage thereof, in same day funds, an amount equal to such Participant’s
share (based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.

 

(e)           Each Issuing Lender shall, promptly after the issuance of, or
amendment to, a Letter of Credit give the Administrative Agent and the Borrower
written notice of such issuance or amendment, as the case may be, and such
notice shall be accompanied by a copy of the issued Letter of Credit or
amendment, as the case may be.  Upon receipt of such notice, the Administrative
Agent shall promptly notify each Participant, in writing, of such issuance or
amendment and in the event a Participant shall so request, the Administrative
Agent shall furnish such Participant with a copy of such issuance or amendment.

 

(f)            Each Issuing Lender shall deliver to the Administrative Agent,
promptly on the first Business Day of each week, by facsimile transmission, the
aggregate daily Stated Amount available to be drawn under the outstanding
Letters of Credit issued by such Issuing Lender for the previous week.  Upon
request, the Administrative Agent shall, within 10 days after the last Business
Day of each calendar month, deliver to each Participant a report setting forth
for such preceding calendar month the aggregate daily Stated Amount available to
be drawn under all outstanding Letters of Credit during such calendar month.

 

(g)           The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Issuing Lender with
respect to Letters of Credit issued by it shall be irrevocable and not subject
to any qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:

 

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(i)            any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;

 

(ii)           the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, any Lender, any Issuing Lender, any Participant, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);

 

(iii)          any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

 

(iv)          the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or

 

(v)           the occurrence of any Default or Event of Default.

 

2.04  Agreement to Repay Letter of Credit Drawings(a)  The Borrower hereby
agrees to reimburse each Issuing Lender, by making payment to the Administrative
Agent in immediately available funds at the Payment Office, for any payment or
disbursement made by such Issuing Lender under any Letter of Credit issued by it
(each such amount, so paid until reimbursed, an “Unpaid Drawing”), not later
than four Business Days following receipt by the Borrower of notice of such
payment or disbursement (provided that no such notice shall be required to be
given if a Default or an Event of Default under Section 10.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or disbursed by such Issuing Lender, to the extent not reimbursed prior
to 12:00 Noon (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Lender was reimbursed by the Borrower therefor at a rate per annum equal to the
Base Rate, as in effect from time to time, plus 2%; provided, however, to the
extent such amounts are not reimbursed prior to 12:00 Noon (New York time) on
the fourth Business Day following the receipt by the Borrower of notice of such
payment or disbursement or following the occurrence of a Default or an Event of
Default under Section 10.05, interest shall thereafter accrue on the amounts so
paid or disbursed by such Issuing Lender (and until reimbursed by the Borrower)
at a rate per annum equal to the Base Rate in effect from time to time plus 2%,
with such interest to be payable on demand.  Each Issuing Lender shall give the
Borrower prompt written notice of each Drawing under any Letter of Credit issued
by it, provided that the failure to give any such notice shall in no way affect,
impair or diminish the Borrower’s obligations hereunder.

 

(b)           The obligations of the Borrower under this Section 2.04 to
reimburse the respective Issuing Lender with respect to drawings on Letters of
Credit (each, a “Drawing”) (including, in each case, interest thereon) shall be
absolute and unconditional under any and all

 

13

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circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Lender (including in its
capacity as Issuing Lender or Participant or as Participant), or any
non-application or misapplication by the beneficiary of the proceeds of such
Drawing, the respective Issuing Lender’s only obligation to the Borrower being
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit.  Subject to the provisions
of the immediately preceding sentence, any action taken or omitted to be taken
by any Issuing Lender under or in connection with any Letter of Credit if taken
or omitted in the absence of gross negligence or willful misconduct as
determined by a court of competent jurisdiction, shall not create for such
Issuing Lender any resulting liability to the Borrower or any other Credit
Party.

 

2.05  Increased Costs.  If at any time after the Effective Date, any Issuing
Lender or any Participant determines that the introduction of or any change in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Issuing
Lender or any Participant with any request or directive by any such authority
(whether or not having the force of law), shall either (a) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by any Issuing Lender or participated in by any
Participant, or (b) impose on any Issuing Lender or any Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to any
Issuing Lender or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
any Issuing Lender or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit, then, upon demand to the Borrower
by such Issuing Lender or any Participant (a copy of which demand shall be sent
by such Issuing Lender or such Participant to the Administrative Agent), the
Borrower agrees to pay to such Issuing Lender or such Participant such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in the amount receivable or reduction on the rate of return on
its capital.  Any Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.05, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to such Borrower by such Issuing Lender or such
Participant (a copy of which certificate shall be sent by such Issuing Lender or
such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for and the calculation of such additional amount or amounts
necessary to compensate such Issuing Lender or such Participant, although the
failure to give any such notice shall not release or diminish the Borrower’s
obligations to pay additional amounts pursuant to this Section 2.05.  The
certificate required to be delivered pursuant to this Section 2.05 shall, if
delivered in good faith and absent manifest error, be final and conclusive and
binding on the Borrower.

 

SECTION 3.  Commitment Commission; Fees; Reductions of Commitment.

 

3.01  Commitment Commission.  (a)  The Borrower agrees to pay the Administrative
Agent for distribution to each Non-Defaulting Lender a commitment commission
(the “Commitment Commission”) for the period from the Initial Borrowing Date to
and including the Maturity Date (or such earlier date as the Total Commitment
shall have been terminated) computed at a rate for each day equal to .35
multiplied by the Applicable Margin on

 

14

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such day multiplied by the daily average Unutilized Commitment of such
Non-Defaulting Lender.  Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Payment Date and on the Maturity Date (or such
earlier date upon which the Total Commitment is terminated).

 

(b)           The Borrower shall pay to the Administrative Agent, for the
Administrative Agent’s own account, such other fees as have been agreed to in
writing by the Borrower and the Administrative Agent.

 

(c)           The Borrower agrees to pay to the Administrative Agent for
distribution to each Lender (based on each such Lender’s respective Percentage),
a fee in respect of each Letter of Credit (the “Letter of Credit Fee”) for the
period from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the Applicable Margin then in effect from
time to time on the daily Stated Amount of each such Letter of Credit.  Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Payment Date and on the Maturity Date (or such earlier date upon which the Total
Commitment is terminated).

 

(d)           The Borrower agrees to pay directly to each Issuing Lender, for
its own account, a facing fee in respect of each Letter of Credit issued by it
(the “Facing Fee”) for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination or expiration of
such Letter of Credit, computed at a rate per annum equal to 1/8 of 1% on the
daily Stated Amount of such Letter of Credit, provided that in any event the
minimum amount of Facing Fees payable in any twelve-month period for each Letter
of Credit shall be not less than $500; it being agreed that, on the day of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination or expiration of such Letter of Credit, if $500 will exceed the
amount of Facing Fees that will accrue with respect to such Letter of Credit for
the immediately succeeding twelve-month period, the full $500 shall be payable
on the date of issuance of such Letter of Credit and on each such anniversary
thereof.  Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Payment Date and upon the first day on or after the termination
of the Total Commitment upon which no Letters of Credit remain outstanding.

 

(e)           The Borrower agrees to pay, upon each payment (including any
partial payment) under, issuance of, extension of, or amendment to, any Letter
of Credit issued hereunder, such amount as shall at the time of such event be
the administrative charge which the respective Issuing Lender is generally
charging in connection with such occurrence with respect to letters of credit.

 

3.02  Voluntary Termination of Unutilized Commitments.  Upon at least three
Business Day’s prior notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Commitment, in
whole or in part, in integral multiples of $5,000,000 in the case of partial
reductions thereto, provided that each such reduction shall apply
proportionately to permanently reduce the Commitment of each Lender.

 

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3.03  Mandatory Reduction of Commitments.  (a)  In addition to any other
mandatory commitment reductions pursuant to this Section 3.03, the Total
Commitment (and the Commitment of each Lender) shall terminate in its entirety
on the earlier of (x) November 30, 2005, if the Initial Borrowing Date has not
occurred on or before such date, and (y) the Maturity Date.

 

(b)           In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Commitment shall be reduced at the times, and in
the amounts, required by Section 4.02.

 

(c)           Each reduction to the Total Commitment pursuant to this
Section 3.03 and Section 4.02 shall be applied proportionately to reduce the
Commitment of each Lender.

 

SECTION 4.  Prepayments; Payments; Taxes.

 

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

 

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

 

(ii)           each prepayment shall be in an aggregate principal amount of at
least $1,000,000 or such lesser amount of a Borrowing which is outstanding,
provided that no partial prepayment of Loans made pursuant to any Borrowing
shall reduce the outstanding Loans made pursuant to such Borrowing to an amount
less than $1,000,000;

 

(iii)          at the time of any prepayment of Loans pursuant to this
Section 4.01 on any date other than the last day of the Interest Period
applicable thereto, the Borrower shall pay the amounts required pursuant to
Section 1.10;

 

(iv)          in the event of certain refusals by a Lender as provided in
Section 13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders, the Borrower may, upon five Business Days’ written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), prepay all Loans,
together with accrued and unpaid interest, Commitment Commission, and other
amounts owing to such Lender (or owing to such Lender with respect to each Loan
which gave rise to the need to obtain such Lender’s individual consent) in
accordance with said Section 13.12(b) so long as (A) the Commitment of such
Lender (if any) is terminated concurrently with such prepayment (at which time
Schedule I shall be deemed modified to reflect the changed Commitments) and
(B) the consents required by Section 13.12(b) in connection with the prepayment
pursuant to this clause (iv) have been obtained; and

 

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(v)           except as expressly provided in the preceding clause (iv), each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among the Loans comprising such Borrowing, provided that in connection
with any prepayment of Loans pursuant to this Section 4.01, such prepayment
shall not be applied to any Loan of a Defaulting Lender until all other Loans of
Non-Defaulting Lenders have been repaid in full.

 

4.02  Mandatory Repayments and Commitment Reductions.  (a)                On any
day on which the aggregate outstanding principal amount of Loans and the Letter
of Credit Outstandings exceeds the Total Available Commitment as then in effect,
the Borrower shall repay principal of Loans in an amount equal to such excess. 
If, after giving effect to the prepayment of all outstanding Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
Available Commitment as then in effect, the Borrower shall pay to the Collateral
Agent on such date an amount of cash or Cash Equivalents equal to the amount of
such excess (up to a maximum amount equal to the Letter of Credit Outstandings
at such time), such cash or Cash Equivalents to be held as security for all
obligations of the Borrower hereunder in a cash collateral account to be
established by the Collateral Agent.

 

(b)           In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below (each a
“Scheduled Commitment Reduction Date”), the Borrower shall be required to
permanently reduce the Total Commitment as then in effect by the amount set
forth opposite such Scheduled Commitment Reduction Date in the table below (each
such reduction, as the same may be reduced as provided in Sections 4.01 and
4.02(e), a “Scheduled Commitment Reduction”):

 

Scheduled Commitment Reduction Date

 

Amount

 

October 26, 2009

 

$

44,500,000

 

April 26, 2010

 

$

44,500,000

 

October 26, 2010

 

$

44,500,000

 

April 26, 2011

 

$

44,500,000

 

October 26, 2011

 

$

44,500,000

 

April 26, 2012

 

$

44,500,000

 

Maturity Date

 

$

533,000,000

 

 

(c)           In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, but without duplication, on (i) the
Business Day following the date of any Collateral Disposition involving a
Mortgaged Vessel (other than a Collateral Disposition constituting an Event of
Loss) and (ii) the earlier of (A) the date which is 180 days following any
Collateral Disposition constituting an Event of Loss involving a Mortgaged
Vessel and (B) the date of receipt by the Borrower, any of its Subsidiaries or
the Administrative Agent of the insurance proceeds relating to such Event of
Loss, the Borrower shall be required to reduce the Total Commitment in an amount
equal to the product of the Total Commitment multiplied by a fraction (A) the
numerator of which is equal to the appraised value (as determined in accordance
with the most recent appraisal report delivered to the Administrative Agent (or
obtained by the Administrative Agent) pursuant to Section 8.01(c)) of the
Mortgaged Vessel or Mortgaged Vessels which is/are the subject of such
Collateral Disposition and (B) the denominator of which

 

17

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is equal to the Aggregate Mortgaged Vessel Value (as determined in accordance
with the most recent appraisal report delivered to the Administrative Agent (or
obtained by the Administrative Agent) pursuant to Section 8.01(c) before giving
effect to such Collateral Disposition); provided that (m) the Borrower, at its
option, shall not be required to reduce the Total Commitment upon a Collateral
Disposition in respect of a Mortgaged Vessel (other than a Collateral
Disposition constituting an Event of Loss) provided that (x) the Additional
Blocked Commitment is increased by an amount equal to the amount by which the
Total Commitments would otherwise be required to be reduced by reason of such
Collateral Disposition, (y) to the extent required by Section 4.02(a), the
Borrower repays any Loans and cash collateralizes the Letter of Credit
Outstandings and (z) no later than 365 days after the date of such Collateral
Disposition, such Mortgaged Vessel is replaced by an Acceptable Replacement
Vessel pursuant to a Vessel Exchange, provided further that, if such Vessel
Exchange does not occur within 365 days of the date of such Collateral
Disposition the Total Commitment shall be permanently reduced by an amount equal
to the amount by which the Additional Blocked Commitment was increased pursuant
to clause (x) above in respect of such Mortgaged Vessel, and (n) without
limiting anything otherwise provided for in this Agreement, the Borrower hereby
acknowledges that it is obliged to comply with Section 9.10 at all times
(including, without limitation, after giving effect to any commitment reduction
contemplated by the foregoing Section 4.02(b)).

 

(d)           In addition to any mandatory repayment or commitment reductions
pursuant to this Section 4.02, but without duplication, on the Business Day
following (x) any Collateral Disposition involving a Vessel then subject to a
Construction Contract, (y) the sale or termination of such Construction Contract
or (z) the Delivery Deadline for such Vessel, if such Vessel is not delivered,
and the requirements of Section 8.15 have not been satisfied, on or before the
Delivery Deadline, the Total Commitment shall be reduced in an amount equal to
the product of the Total Commitment multiplied by a fraction (A) the numerator
of which is equal to the appraised value (as determined in accordance with the
most recent appraisal report delivered to the Administrative Agent (or obtained
by the Administrative Agent) pursuant to Section 8.01(c)) of such Vessel
determined on a charter-free, as-built basis, and (B) the denominator of which
is equal to the sum of the Aggregate Mortgaged Vessel Value (as determined in
accordance with the most recent appraisal report delivered to the Administrative
Agent (or obtained by the Administrative Agent) pursuant to Section 8.01(c) and
the appraised value of such Vessel determined in accordance with clause (A));
provided that the Borrower, at its option, shall not be required to reduce the
Total Commitment as provided above in this clause (d), provided that (x) the
Additional Blocked Commitment is increased by an amount equal to the amount by
which the Total Commitments would otherwise be required to be reduced above in
this clause (d) with respect to such Vessel, (y) to the extent required by
Section 4.02(a), the Borrower repays any Loans and cash collateralizes the
Letter of Credit Outstandings and (z) no later than 365 days after the date of
such Collateral Disposition or such sale or termination of a Construction
Contract or such Delivery Deadline, as the case may be, such Vessel is replaced
by an Acceptable Replacement Vessel pursuant to a Vessel Exchange (assuming for
the purposes of this sub-clause (z) that such Vessel was a Mortgaged Vessel
delivered in accordance with the related Construction Contract), provided
further that, if such Vessel Exchange does not occur within 365 days of the date
of such Collateral Disposition, termination or sale or Delivery Deadline, as the
case may be, the Total Commitment shall be permanently reduced by an amount
equal to the amount by which the Additional Blocked Commitment was increased
pursuant to clause (x) above in respect of such Vessel.

 

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(e)           The amount of each commitment reduction required by Sections
4.02(c) and 4.02(d) shall be applied to reduce the then remaining Scheduled
Commitment Reductions pro rata based upon the then remaining Scheduled
Commitment Reductions after giving effect to all prior reductions thereto.

 

(f)            With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the specific Borrowing or Borrowings
pursuant to which such Loans were made, provided that (i) all Loans with
Interest Periods ending on such date of required repayment shall be paid in full
prior to the payment of any other Loans and (ii) each repayment of any Loans
comprising a Borrowing shall be applied pro rata among such Loans.  In the
absence of a designation by the Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the preceding provisions of this
clause (e), make such designation in its sole reasonable discretion with a view,
but no obligation, to minimize breakage costs owing pursuant to Section 1.10.

 

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

 

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

 

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

 

19

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

 

(b)           Each Lender agrees to use reasonable efforts (consistent with
legal and regulatory restrictions and subject to overall policy considerations
of such Lender) to file any certificate or document or to furnish to the
Borrower any information as reasonably requested by the Borrower that may be
necessary to establish any available exemption from, or reduction in the amount
of, any Taxes; provided, however, that nothing in this Section 4.04(b) shall
require a Lender to disclose any confidential information (including, without
limitation, its tax returns or its calculations).

 

(c)           If the Borrower pays any additional amount under this Section 4.04
to a Lender and such Lender determines in its sole discretion exercised in good
faith that it has actually received or realized in connection therewith any
refund or any reduction of, or credit against, its Tax liabilities in or with
respect to the taxable year in which the additional amount is paid (a “Tax
Benefit”), such Lender shall pay to the Borrower an amount that such Lender
shall, in its sole discretion exercised in good faith, determine is equal to the
net benefit, after tax, which was obtained by such Lender in such year as a
consequence of such Tax Benefit; provided, however, that (i) any Lender may
determine, in its sole discretion exercised in good faith consistent with the
policies of such Lender, whether to seek a Tax Benefit, (ii) any Taxes that are
imposed on a Lender as a result of a disallowance or reduction (including
through the expiration of any tax credit carryover or carryback of such Lender
that otherwise would not have expired) of any Tax Benefit with respect to which
such Lender has made a payment to the Borrower pursuant to this
Section 4.04(c) shall be treated as a Tax for which the Borrower is obligated to
indemnify such Lender pursuant to this Section 4.04 without any exclusions or
defenses, (iii) nothing in this Section 4.04(c) shall require any Lender to
disclose any confidential information to the Borrower (including, without
limitation, its tax returns), and (iv) no Lender shall be required to pay any
amounts pursuant to this Section 4.04(c) at any time during which a Default or
Event of Default exists.

 

SECTION 5.  Conditions Precedent to the Initial Borrowing Date.  The obligation
of each Lender to make Loans on the Initial Borrowing Date is subject at the
time of the making of such Loans to the satisfaction or waiver of the following
conditions:

 

5.01  Effective Date; Notes.  On or prior to the Initial Borrowing Date (i) the
Effective Date shall have occurred and (ii) if requested by a Lender, there
shall have been delivered to the Administrative Agent, for the account of such
Lender, the appropriate Note for

 

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such Lender executed by the Borrower, in each case in the amount, maturity and
as otherwise provided herein. 

 

5.02  Fees, etc.  On the Initial Borrowing Date, the Borrower shall have paid to
the Administrative Agent, the Joint Lead Arrangers and the Lenders all costs,
fees and expenses (including, without limitation, reasonable legal fees and
expenses) payable to the Administrative Agent, the Joint Lead Arrangers and the
Lenders in respect of the transactions contemplated by this Agreement to the
extent then due.

 

5.03  Opinions of Counsel.

 

(a)           On the Initial Borrowing Date, the Administrative Agent shall have
received from Kramer Levin Naftalis & Frankel LLP, special New York counsel to
the Borrower and its Subsidiaries, an opinion addressed to the Administrative
Agent and each of the Lenders and dated the Initial Borrowing Date covering the
matters set forth in Exhibit C-1 which shall (x) be in form and substance
reasonably acceptable to the Administrative Agent, (y) cover the perfection of
the security interests (other than those to be covered by opinions delivered
pursuant to clauses (b) through (d) below) granted pursuant to the Security
Documents and (z) state that the transactions contemplated by this Agreement do
not violate the Senior Note Indenture and such other matters incidental to the
transactions contemplated herein as the Administrative Agent may reasonably
request.

 

(b)           On the Initial Borrowing Date, the Administrative Agent shall have
received from Constantine P. Georgiopoulos, special New York maritime counsel to
the Borrower and its Subsidiaries, an opinion addressed to the Administrative
Agent and each of the Lenders and dated the Initial Borrowing Date covering the
matters set forth in Exhibit C-2 which shall (x) be in form and substance
reasonably acceptable to the Administrative Agent and (y) cover the perfection
of the security interests granted pursuant to the Vessel Mortgages and such
other matters incidental thereto as the Administrative Agent may reasonably
request.

 

(c)           On the Initial Borrowing Date, the Administrative Agent shall have
received from George E. Henries, Esq., special Liberian counsel to the Borrower
and its Subsidiaries (or other counsel to the Borrower and its Subsidiaries
qualified in such jurisdiction and reasonably satisfactory to the Administrative
Agent), an opinion addressed to the Administrative Agent and each of the Lenders
and dated the Initial Borrowing Date covering the matters set forth in
Exhibit C-3, which shall (x) be in form and substance reasonably acceptable to
the Administrative Agent and (y) in the case of each Mortgaged Vessel registered
under the laws and flag of the Republic of Liberia, cover the perfection of the
security interests granted pursuant to the relevant Vessel Mortgage(s) and such
other matters incidental thereto as the Administrative Agent may reasonably
request.

 

(d)           On the Initial Borrowing Date the Administrative Agent shall have
received from Dennis J. Reeder, Esq., special Marshall Islands counsel to the
Borrower and its Subsidiaries (or other counsel to the Borrower and its
Subsidiaries qualified in such jurisdiction and reasonably satisfactory to the
Administrative Agent), an opinion addressed to the Administrative Agent and each
of the Lenders and dated the Initial Borrowing Date covering the matters set
forth in Exhibit C-4, which shall (x) be in form and substance reasonably
acceptable

 

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to the Administrative Agent and (y) in the case of each Mortgaged Vessel
registered under the laws and flag of the Republic of Marshall Islands, cover
the perfection of the security interests granted pursuant to the relevant Vessel
Mortgage(s) and such other matters incidental thereto as the Administrative
Agent may reasonably request.

 

(e)           On the Initial Borrowing Date, the Administrative Agent shall have
received from Cains Advocates Limited, special Isle of Man counsel to the
Borrower and its Subsidiaries, an opinion addressed to the Administrative Agent
and each of the Lenders and dated the Initial Borrowing Date covering the
matters set forth in Exhibit C-6 which shall (x) be in form and substance
reasonably acceptable to the Administrative Agent and (y) cover the perfection
of the security interests (other than those to be covered by opinions delivered
pursuant to clauses (a) through (d) above) granted pursuant to the Security
Documents and such other matters incidental to the transactions contemplated
herein as the Administrative Agent may reasonably request.

 

5.04  Corporate Documents; Proceedings; etc.  (a)        On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the Chairman of the Board, the
President, any Vice President, the Treasurer or an authorized manager, member or
general partner of each Credit Party, and attested to by the Secretary or any
Assistant Secretary (or, to the extent such Credit Party does not have a
Secretary or Assistant Secretary, the analogous Person within such Credit Party)
of such Credit Party, as the case may be, in the form of Exhibit D, with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws (or equivalent organizational documents) of such Credit Party and
the resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Administrative Agent.

 

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

 

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

 

(a)           all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of their capital stock or
membership interests and any agreements entered into by shareholders or members
relating to any such entity with respect to its capital stock or membership
interests (collectively, the “Shareholders’ Agreements”);

 

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

 

(c)           all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding (other than
the Credit Documents) after giving effect to the incurrence of Loans on the
Initial Borrowing Date (if any) (collectively, the “Debt Agreements”);

 

(d)           all employment agreements entered into by the Borrower or any of
its Subsidiaries with members of management of the Borrower or any of such
Subsidiaries (collectively, the “Employment Agreements”);

 

(e)           all service agreements entered into between the Borrower and its
Subsidiaries (“Service Agreement”); and

 

(f)            all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries (collectively, the “Tax
Sharing Agreements”);

 

all of which Shareholders’ Agreements, Management Agreements, Debt Agreements,
Employment Agreements, Service Agreements and Tax Sharing Agreements shall be in
form and substance reasonably satisfactory to the Administrative Agent and shall
be in full force and effect on the Initial Borrowing Date.

 

5.06  Subsidiaries Guaranty.  On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered to the
Administrative Agent the Subsidiaries Guaranty in the form of Exhibit E (as
modified, supplemented or amended from time to time, the “Subsidiaries
Guaranty”), and the Subsidiaries Guaranty shall be in full force and effect.

 

5.07  Pledge and Security Agreement.  On the Initial Borrowing Date, each of the
Borrower and each of the Subsidiary Guarantors described in clause (x) of the
definition thereof shall have (x) duly authorized, executed and delivered the
Pledge and Security Agreement in the form of Exhibit F (as modified,
supplemented or amended from time to time, the “Pledge Agreement”) and shall
have (A) delivered to the Collateral Agent, as pledgee, all the Pledged
Securities referred to therein, together with executed and undated stock powers
in the case of capital stock constituting Pledged Securities, and (B) otherwise
complied with all of the requirements set forth in the Pledge Agreement and (y)
duly authorized, executed and delivered any other related documentation
necessary or advisable to perfect the Lien on the Pledge Agreement Collateral in
the respective jurisdictions of formation of the respective Subsidiary Guarantor
or the Borrower, as the case may be.

 

5.08  Solvency Certificate.  On the Initial Borrowing Date, the Borrower shall
cause to be delivered to the Administrative Agent a solvency certificate from
the senior financial officer of the Borrower, in the form of Exhibit O, which
shall be addressed to the Administrative Agent and each of the Lenders and dated
the Initial Borrowing Date, setting forth the conclusion that, after giving
effect to the incurrence of all the financings contemplated hereby, the Borrower
individually, and the Borrower and its Subsidiaries taken as a whole, are not
insolvent and will

 

23

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not be rendered insolvent by the incurrence of such indebtedness, and will not
be left with unreasonably small capital with which to engage in their respective
businesses and will not have incurred debts beyond their ability to pay such
debts as they mature.

 

5.09  Financial Statements.  On the Initial Borrowing Date, the Administrative
Agent shall have received copies of the financial statements referred to in
Sections 7.05(a), which financial statements shall be in form and substance
reasonably satisfactory to the Administrative Agent.

 

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

 

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

 

5.11  Litigation.  On the Initial Borrowing Date, there shall be no actions,
suits or proceedings pending or threatened (i) with respect to the this
Agreement or any other Credit Document or (ii) which the Administrative Agent
shall determine has had, or could reasonably be expected to have, a Material
Adverse Effect.

 

5.12  Appraisals. On or prior to the Initial Borrowing Date, the Administrative
Agent shall have received an appraisal report of a recent date (and in no event
dated earlier than 30 days prior to the Initial Borrowing Date) in scope, form
and substance, and from independent appraisers, reasonably satisfactory to the
Administrative Agent, stating the then current fair market value of each of the
Mortgaged Vessels on such date, the results of which shall be reasonably
satisfactory to the Administrative Agent.

 

5.13  Refinancing.  (a)          On or prior to the Initial Borrowing Date, the
total commitments pursuant to the Existing Credit Agreement shall have been
terminated, and all loans and notes with respect thereto shall have been repaid
in full (together with interest thereon), all letters of credit issued
thereunder shall have been terminated or deemed issued under this Agreement
pursuant to Section 2.01(d) and all other amounts owing pursuant to the

 

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Existing Credit Agreement shall have been repaid in full (the “Refinancing”). 
The creditors in respect of the Existing Credit Agreement shall have terminated
and released all security interests in and Liens on the assets of Borrower and
its Subsidiaries created pursuant to the security documentation relating to the
Existing Credit Agreement, and such creditors shall have returned all assets (if
any) in their possession pursuant to the security documentation relating to the
Existing Credit Agreement to the Borrower, and the Administrative Agent shall
have received evidence, in form and substance reasonably satisfactory to the
Administrative Agent, that the matters set forth in this Section 5.13 have been
satisfied as of the Initial Borrowing Date.

 

(b)           On or prior to the Initial Borrowing Date, the Borrower and its
Subsidiaries shall have no outstanding Indebtedness except for (i) the Loans,
(ii) the Senior Notes and (iii) certain other Indebtedness of the Borrower and
its Subsidiaries listed on Schedule V.

 

(c)           After giving effect to the Refinancing and this Agreement, the
financings incurred in connection herewith and the other transactions
contemplated hereby, there shall be no conflict with, or default under, any
material agreement of the Borrower or any of its Subsidiaries.

 

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

 

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

 

(b)           certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as debtor and that are filed in the jurisdictions
referred to in Section 5.14(a) above, together with copies of such other
financing statements (none of which shall cover the Collateral except to the
extent evidencing Permitted Liens unless in respect of which the Collateral
Agent shall have received Form UCC-3 Termination Statements (or such other
termination statements as shall be required by local law) fully executed for
filing if required by applicable laws); and

 

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

 

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

 

(a)           Each Subsidiary Guarantor which owns a Mortgaged Vessel shall have
duly authorized, executed and delivered, and caused to be recorded in the
appropriate vessel

 

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registry a first preferred mortgage (as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, the “Vessel
Mortgages”), substantially in the form of Exhibit I-1 or I-2, as applicable,
with respect to each Vessel listed on Schedule III (together with any Vessel
delivered pursuant to a Construction Contract and Section 8.15 from and after
the date of such delivery, each a “Mortgaged Vessel”) and the Vessel Mortgages
shall be effective to create in favor of the Collateral Agent a legal, valid and
enforceable first priority security interest, in and lien upon such Mortgaged
Vessels, subject only to Permitted Liens.  Except as specifically provided
above, all filings, deliveries of instruments and other actions necessary or
desirable in the reasonable opinion of the Collateral Agent to perfect and
preserve such security interests shall have been duly effected and the
Collateral Agent shall have received evidence thereof in form and substance
reasonably satisfactory to the Collateral Agent.

 

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

 

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

 

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

 

5.16  Environmental Laws.  On the Initial Borrowing Date, there shall not exist
any condition or occurrence on or arising from any Vessel or property owned or
operated or occupied by the Borrower or any of its Subsidiaries that (a) results
in material noncompliance by the Borrower or such Subsidiary with any applicable
Environmental Law or (b) could reasonably be expected to form the basis of a
material Environmental Claim against the Borrower or any of its Subsidiaries or
any such Vessel or property.

 

5.17  Assignment of the Refund Guarantees.  On the Initial Borrowing Date, the
Borrower and/or each Subsidiary that is a beneficiary of a Refund Guaranty shall
have duly authorized, executed and delivered an assignment of the Borrower’s
and/or such Subsidiary’s rights under each Refund Guaranty in the form of
Exhibit P (as modified, supplemented or amended from time to time, each an
“Assignment of Refund Guaranty”), covering all of the

 

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Borrower’s and/or such Subsidiary’s present and future interests in such Refund
Guaranty, together with:

 

(I)            PROPER FINANCING STATEMENTS (FORM UCC-1 OR THE EQUIVALENT) FULLY
EXECUTED FOR FILING UNDER THE UCC OR IN OTHER APPROPRIATE FILING OFFICES OF EACH
JURISDICTION AS MAY BE NECESSARY OR, IN THE REASONABLE OPINION OF THE COLLATERAL
AGENT, DESIRABLE TO PERFECT THE SECURITY INTERESTS PURPORTED TO BE CREATED BY
THE ASSIGNMENTS OF REFUND GUARANTY;

 

(II)           CERTIFIED COPIES OF REQUESTS FOR INFORMATION OR COPIES
(FORM UCC-11), OR EQUIVALENT REPORTS, LISTING ALL EFFECTIVE FINANCING STATEMENTS
THAT NAME ANY CREDIT PARTY AS DEBTOR AND THAT ARE FILED IN THE JURISDICTIONS
REFERRED TO IN SECTION 5.17(I) ABOVE, TOGETHER WITH COPIES OF SUCH OTHER
FINANCING STATEMENTS (NONE OF WHICH SHALL COVER THE COLLATERAL EXCEPT TO THE
EXTENT EVIDENCING PERMITTED LIENS OR IN RESPECT OF WHICH THE COLLATERAL AGENT
SHALL HAVE RECEIVED FORM UCC-3 TERMINATION STATEMENTS (OR SUCH OTHER TERMINATION
STATEMENTS AS SHALL BE REQUIRED BY LOCAL LAW) FULLY EXECUTED FOR FILING); AND

 

(iii)          evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Assignments of Refund Guaranty have
been taken.

 

SECTION 6.  Conditions Precedent to All Credit Events.  The obligation of each
Lender to make Loans (including Loans made on the Initial Borrowing Date and
each Borrowing Date thereafter), and the obligation of any Issuing Lender to
issue any Letter of Credit, is subject to the satisfaction of the following
conditions:

 

6.01  No Default; Representations and Warranties.  At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects both before and after giving effect to such Credit Event
with the same effect as though such representations and warranties had been made
on the date of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).

 

6.02  Notice of Borrowing.  (a) Prior to the making of each Loan, the
Administrative Agent shall have received the Notice of Borrowing required by
Section 1.03(a).  The acceptance of the proceeds of each Credit Event shall
constitute a representation and warranty by the Borrower to the Administrative
Agent and each of the Lenders that all of the applicable conditions specified in
Section 5 and in this Section 6 and applicable to such Credit Event have been
satisfied as of that time.  All of the applicable Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the Administrative
Agent at the Notice Office for the account of each of the Lenders and, except
for the Notes, in sufficient counterparts for each of the Lenders and shall be
in form and substance reasonably satisfactory to the Administrative Agent.

 

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(b)  Prior to the issuance of each Letter of Credit, the Administrative Agent
and the respective Issuing Lender shall have received a Letter of Credit Request
meeting the requirements of Section 2.02. 

 

SECTION 7.  Representations, Warranties and Agreements.  In order to induce the
Lenders to enter into this Agreement and to make the Loans and issue (or
participate in) the Letters of Credit, the Borrower makes the following
representations, warranties and agreements, in each case on the Effective Date,
all of which shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans and issuance of the Letter of Credit, with the
occurrence of each Credit Event on or after the Effective Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 7 are true and correct in all material respects on and as of the
Effective Date and on the date of each such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date):

 

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

 

7.02  Corporate Power and Authority.  Each Credit Party has the corporate or
other applicable power and authority to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate or other applicable action to authorize the execution,
delivery and performance by it of each of such Documents.  Each Credit Party has
duly executed and delivered each of the Documents to which it is party, and each
of such Documents constitutes the legal, valid and binding obligation of such
Credit Party enforceable against such Credit Party in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

 

7.03  No Violation.  Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, will (i) contravene any material provision of
any applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the material properties or assets of the
Borrower or any of its Subsidiaries pursuant

 

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to the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement (including, without limitation, the Senior Note Documents), or any
other material agreement, contract or instrument, to which the Borrower or any
of its Subsidiaries is a party or by which it or any of its material property or
assets is bound or to which it may be subject or (iii) violate any provision of
the Certificate of Incorporation or By-Laws (or equivalent organizational
documents) of the Borrower or any of its Subsidiaries. 

 

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

 

7.05  Financial Statements; Financial Condition; Undisclosed Liabilities.  (a) 
The audited consolidated balance sheets of the Borrower as at December 31, 2002,
December 31, 2003 and December 31, 2004 and the unaudited consolidated balance
sheets of the Borrower as at June 30, 2005 and the related consolidated
statements of operations and of cash flows for the fiscal years or quarters, as
the case may be, ended on such dates, reported on by and accompanied by, in the
case of the annual financial statements, an unqualified report from Deloitte &
Touche LLP, present fairly the consolidated financial condition of the Borrower
as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years or quarters, as the case
may be, then ended.  All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).  Neither the Borrower
nor any of its Subsidiaries has any material guarantee obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the financial statements referred to in
the preceding sentence (it being understood that with respect to guarantee
obligations, the underlying debt is so reflected). 

 

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

 

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(c)           Since December 31, 2004, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.

 

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

 

7.07  True and Complete Disclosure.  All factual information (taken as a whole)
furnished by or on behalf of the Borrower in writing to the Administrative Agent
or any Lender (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of the Borrower in writing to the Administrative Agent or any Lender will
be, true and accurate in all material respects and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time as such information was
provided.

 

7.08  Use of Proceeds; Margin Regulations.  (a) All proceeds of the Loans may be
used only for the following (i) to effect the Refinancing, (ii) from time to
time, to redeem, retire, purchase or otherwise acquire, directly or indirectly,
for a consideration any shares of Borrower Stock, (iii) to prepay, retire,
repurchase, refund or redeem, in whole or in part, all or a portion of the
Senior Notes (including, but not limited to, the payment of any prepayment
penalty, premium or any make-whole call provision that may be triggered or
required by market conditions or trades including any requirements pursuant to
the Senior Note Documents) and/or (iv) for working capital, capital expenditures
and general corporate purposes.

 

(b)           No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock (other than Borrower Stock) or to extend credit for the
purpose of purchasing or carrying any Margin Stock (other than Borrower Stock). 
Neither the making of any Loan nor the use of the proceeds thereof nor the
occurrence of any other Credit Event will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

 

7.09  Tax Returns and Payments.  The Borrower and each of its Subsidiaries has
timely filed all U.S. federal income tax returns, statements, forms and reports
for taxes and all other material U.S. and non-U.S. tax returns, statements,
forms and reports for taxes required to be filed by or with respect to the
income, properties or operations of the Borrower and/or any of its Subsidiaries
(the “Returns”).  The Returns accurately reflect in all material respects all
liability for taxes of the Borrower and its Subsidiaries as a whole for the
periods covered thereby.  The Borrower and each of its Subsidiaries have at all
times paid, or have provided adequate reserves (in accordance with generally
accepted accounting principles) for the payment of, all material U.S. federal,
state and non-U.S. income taxes applicable for all taxes payable by them.  There
is no material action, suit, proceeding, investigation, audit, or claim now
pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened by any authority regarding any taxes relating to the Borrower or any
of its Subsidiaries.  As of the Effective Date, neither the Borrower nor any of
its Subsidiaries has entered into an agreement or waiver or been requested

 

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to enter into an agreement or waiver extending any statute of limitations
relating to the payment or collection of taxes of the Borrower or any of its
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of the Borrower or any of its Subsidiaries not to
be subject to the normally applicable statute of limitations. 

 

7.10  Compliance with ERISA.  (i)  Schedule VII sets forth, as of the Effective
Date, each Plan; each Plan, other than any Multiemployer Plan (and each related
trust, insurance contract or fund), is in substantial compliance with its terms
and with all applicable laws, including without limitation ERISA and the Code;
each Plan, other than any Multiemployer Plan (and each related trust, if any),
which is intended to be qualified under Section 401(a) of the Code has received
a determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; to the best knowledge of the Borrower or any of its
Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer Plan is
insolvent or in reorganization; no Plan has an Unfunded Current Liability in an
amount material to Borrower’s operation; no Plan (other than a Multiemployer
Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been or will be timely made
(except as disclosed on Schedule VII); neither the Borrower nor any of its
Subsidiaries nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such liability under any of the foregoing sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted by the PBGC to terminate
or appoint a trustee to administer any Plan (in the case of a Multiemployer
Plan, to the best knowledge of the Borrower or any of its Subsidiaries or ERISA
Affiliates) which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, or, to the best knowledge of the Borrower or any of its Subsidiaries,
expected or threatened which could reasonably be expected to have a Material
Adverse Effect; using actuarial assumptions and computation methods consistent
with Part 1 of subtitle E of Title IV of ERISA, the Borrower and its
Subsidiaries and ERISA Affiliates would have no liabilities to any Plans which
are Multiemployer Plans in the event of a complete withdrawal therefrom in an
amount which could reasonably be expected to have a Material Adverse Effect;
each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any of its Subsidiaries, or any ERISA Affiliate has
at all times been operated in material compliance with the provisions of Part 6
of subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of the Borrower or any of its Subsidiaries
or any ERISA Affiliate exists nor has any event occurred which could reasonably
be expected to give rise to any such lien on account of any Plan; and the
Borrower and its Subsidiaries do not maintain or contribute to any employee
welfare plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or other former employees

 

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

 

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

 

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

 

7.12  Capitalization.  (a)  On the Initial Borrowing Date, the authorized
capital stock of the Borrower shall consist of (i) 75,000,000 shares of Common
Stock, $0.01 par value per share, no less than 37,772,645 of which shall be
issued and outstanding and (ii) no shares of preferred stock, $0.01 par value
per share, have been issued and outstanding.  All such outstanding shares and
membership interests have been duly and validly issued, are fully paid and
non-assessable and have been issued free of preemptive rights.  As of the
Initial Borrowing Date, the Borrower has no outstanding securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock, except
(i) as set forth on Schedule IX and (ii) for options, warrants and rights to
purchase shares of the Borrower’s common stock which may be issued from time to
time.

 

7.13  Subsidiaries.  On the Effective Date, the Borrower has no Subsidiaries
other than those Subsidiaries listed on Schedule VIII (which Schedule identifies
the correct legal name, direct owner, percentage ownership and jurisdiction of
organization of each such Subsidiary on the date hereof).

 

7.14  Compliance with Statutes, etc.  The Borrower and each of its Subsidiaries
is in compliance in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as

 

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could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

7.15  Investment Company Act.  Neither the Borrower, nor any of its
Subsidiaries, is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

 

7.16  Public Utility Holding Company Act.  Neither the Borrower, nor any of its
Subsidiaries, is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

7.17  Pollution and Other Regulations.  (a)  Each of the Borrower and its
Subsidiaries is in compliance with all applicable Environmental Laws governing
its business, except for such failures to comply as are not reasonably likely to
have a Material Adverse Effect, and neither the Borrower nor any of its
Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing.  All licenses, permits,
registrations or approvals required for the business of the Borrower and each of
its Subsidiaries, as conducted as of the Effective Date, under any Environmental
Law have been secured and the Borrower and each of its Subsidiaries is in
substantial compliance therewith, except for such failures to secure or comply
as are not reasonably likely to have a Material Adverse Effect.  Neither the
Borrower nor any of its Subsidiaries is in any respect in noncompliance with,
breach of or default under any applicable writ, order, judgment, injunction, or
decree to which the Borrower or such Subsidiary is a party or which would affect
the ability of the Borrower or such Subsidiary to operate any Vessel, Real
Property or other facility and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder, except in each such case, such
noncompliance, breaches or defaults as are not likely to, individually or in the
aggregate, have a Material Adverse Effect.  There are, as of the Effective Date,
no Environmental Claims pending or, to the knowledge of the Borrower,
threatened, against the Borrower or any of its Subsidiaries in respect of which
an unfavorable decision, ruling or finding would be reasonably likely to have a
Material Adverse Effect.  There are no facts, circumstances, conditions or
occurrences on any Vessel, Real Property or other facility owned or operated by
the Borrower or any of its Subsidiaries that is reasonably likely (i) to form
the basis of an Environmental Claim against the Borrower, any of its
Subsidiaries or any Vessel, Real Property or other facility owned by the
Borrower or any of its Subsidiaries, or (ii) to cause such Vessel, Real Property
or other facility to be subject to any restrictions on its ownership, occupancy,
use or transferability under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
are not reasonably likely to have a Material Adverse Effect.

 

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

 

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

 

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

 

7.20  Indebtedness.  Schedule V sets forth a true and complete list of all
Indebtedness of the Borrower and its Subsidiaries as of the Initial Borrowing
Date and which is to remain outstanding after giving effect to the Initial
Borrowing Date (the “Existing Indebtedness”), in each case showing the aggregate
principal amount thereof and the name of the borrower and any other entity which
directly or indirectly guarantees such debt.

 

7.21  Insurance.  Schedule VI sets forth a true and complete listing of all
insurance maintained by each Credit Party as of the Initial Borrowing Date, with
the amounts insured (and any deductibles) set forth therein with respect to the
Mortgaged Vessels.

 

7.22  Concerning the Vessels.  The name, registered owner, official number, and
jurisdiction of registration and flag of each Mortgaged Vessel is set forth on
Schedule III.  Each Mortgaged Vessel is and will be operated in material
compliance with all applicable law, rules and regulations.

 

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

 

7.24  Vessel Classification.  Each Mortgaged Vessel is or will be, classified in
the highest class available for vessels of its age and type with a
classification society listed on Schedule X hereto or another internationally
recognized classification society acceptable to the

 

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Collateral Agent, free of any conditions or recommendations, other than as
permitted, or will be permitted, under the Vessel Mortgage.

 

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

 

7.26  Fees and Enforcement.  No fees or taxes, including, without limitation,
stamp, transaction, registration or similar taxes, are required to be paid to
ensure the legality, validity, or enforceability of this Agreement or any of the
other Credit Documents other than recording taxes which have been, or will be,
paid as and to the extent due.  Under the laws of the Republic of the Marshall
Islands or the Republic of Liberia, as applicable, the choice of the laws of the
State of New York as set forth in the Credit Documents which are stated to be
governed by the laws of the State of New York is a valid choice of law, and the
irrevocable submission by each Credit Party to jurisdiction and consent to
service of process and, where necessary, appointment by such Credit Party of an
agent for service of process, in each case as set forth in such Credit
Documents, is legal, valid, binding and effective.

 

7.27  Form of Documentation.  Each of the Credit Documents is in proper legal
form under the laws of the Republic of the Marshall Islands, the Republic of
Malta or the Republic of Liberia, as applicable, for the enforcement thereof
under such laws, subject only to such matters which may affect enforceability
arising under the law of the State of New York.  To ensure the legality,
validity, enforceability or admissibility in evidence of each such Credit
Document in the Republic of the Marshall Islands or the Republic of Liberia, it
is not necessary that any Credit Document or any other document be filed or
recorded with any court or other authority in the Republic of the Marshall
Islands, the Republic of Malta or the Republic of Liberia, except as have been
made, or will be made, in accordance with Section 5.

 

SECTION 8.  Affirmative Covenants.  The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitments and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Commitment Commission and all other obligations incurred
hereunder and thereunder, are paid in full:

 

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

 

(a)           Quarterly Financial Statements.  Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated statements of income and cash flows, in each case for such
quarterly accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period, and in each case, setting
forth comparative figures for the

 

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related periods in the prior fiscal year, all of which shall be certified by the
senior financial officer of the Borrower, subject to normal year-end audit
adjustments and (ii) management’s discussion and analysis of the important
operational and financial developments during the fiscal quarter and
year-to-date periods.

 

(b)           Annual Financial Statements.  Within 90 days after the close of
each fiscal year of the Borrower, (i) the consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal year
and certified by an independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent, together
with a report of such accounting firm stating that in the course of its regular
audit of the financial statements of the Borrower and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of Default
pursuant to Sections 9.07 through 9.10, inclusive, which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or Event
of Default has occurred and is continuing, a statement as to the nature thereof
and (ii) management’s discussion and analysis of the important operational and
financial developments during such fiscal year.

 

(c)           Appraisal Reports.  Together with delivery of the financial
statements described in Section 8.01(b) for each fiscal year, and at any other
time within 33 days of the written request of the Administrative Agent,
appraisal reports of recent date in form and substance and from independent
appraisers reasonably satisfactory to the Administrative Agent, stating the then
current fair market value of each of the Mortgaged Vessels on an individual
charter-free basis and, until delivered pursuant to a Construction Contract and
Section 8.15, each Vessel (as such Vessel is defined in any relevant
Construction Contract) on an individual charter-free basis and an “as-built”
basis.  All such appraisals shall be conducted by, and made at the expense of,
the Borrower (it being understood that the Administrative Agent may and, at the
request of the Required Lenders, shall, upon notice to the Borrower, obtain such
appraisals and that the cost of all such appraisals will be for the account of
the Borrower); provided that, unless an Event of Default shall then be
continuing, in no event shall the Borrower be required to pay for more than two
appraisal reports obtained pursuant to this Section 8.01(c) in any single fiscal
year of the Borrower, with the cost of any such reports in excess thereof to be
paid by the Lenders on a pro rata basis.

 

(d)           Projections, etc.  As soon as available but not more than 45 days
after the commencement of each fiscal year of the Borrower beginning with its
fiscal year (i) commencing on January 1, 2006, a budget of the Borrower and its
Subsidiaries in reasonable detail for each of the twelve months and four fiscal
quarters of such fiscal year and (ii) a determination of the Annual Fleet
Renewal Reserve Amount and the Annual Fleet Maintenance Reserve Amount for such
fiscal year together with such calculations (in reasonable detail) of the Annual
Fleet Renewal Amount and the Annual Fleet Maintenance Amount and a certification
that such calculations and determinations have been approved by the Borrower’s
Board of Directors.  It is recognized by each Lender and the Administrative
Agent that such projections and determinations provided by the Borrower,
although reflecting the Borrower’s good faith projections and determinations,
are not to be viewed as facts and that actual results covered by any such
determination may differ from the projected results. 

 

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(e)           Officer’s Compliance Certificates.  (i)  At the time of the
delivery of the financial statements provided for in Sections 8.01(a) and (b), a
certificate of the senior financial officer of the Borrower in the form of
Exhibit M to the effect that, to the best of such officer’s knowledge, no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof (in reasonable detail), which certificate shall, (x) set forth
the calculations required to establish whether the Borrower was in compliance
with the provisions of Sections 9.07 through 9.10, inclusive, at the end of such
fiscal quarter or year, as the case may be and (y) certify that there have been
no changes to any of Schedule VIII and Annexes A through F of the Pledge
Agreement or, if later, since the date of the most recent certificate delivered
pursuant to this Section 8.01(e)(i), or if there have been any such changes, a
list in reasonable detail of such changes (but, in each case with respect to
this clause (y), only to the extent that such changes are required to be
reported to the Collateral Agent pursuant to the terms of such Security
Documents) and whether the Borrower and the other Credit Parties have otherwise
taken all actions required to be taken by them pursuant to such Security
Documents in connection with any such changes.

 

(ii)           At the time of a Collateral Disposition or Vessel Exchange in
respect of any Mortgaged Vessel, a certificate of a senior financial officer of
the Borrower which certificate shall (x) certify on behalf of the Borrower the
last appraisal received pursuant to Section 8.01(c) determining the Aggregate
Mortgaged Vessel Value after giving effect to such disposition or exchange, as
the case may be, and (y) set forth the calculations required to establish
whether the Borrower is in compliance with the provisions of Section 9.10 after
giving effect to such disposition or exchange, as the case may be.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            Construction Contracts.  Promptly upon, and in any event 10
Business Days after, the Borrower obtains knowledge thereof, written notice of
any of the following matters with respect to any Construction Contract occurring
after the Effective Date:

 

(i)            any material default by the Builder (as defined in such
Construction Contract) or material departure from the Specifications (as defined
in such Construction Contract) under any Construction Contract that results in a
delay in the time of delivery of such Vessel (as such Vessel is defined in such
Construction Contract) in excess of 90 days or in the increase to the Contract
Price (as defined in such Construction Contract) for any Vessel in an amount in
excess of 20% of the Contract Price;  

 

(ii)           upon the receipt or delivery of any notice under any Construction
Contract related to any delay in performance due to Force Majeure (as defined in
the Construction Contracts); and

 

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(iii)          any default by the Borrower under such Construction Contract that
has resulted in the rescission of such Construction Contract by the Builder.

 

(J)            OTHER INFORMATION.  FROM TIME TO TIME, SUCH OTHER INFORMATION OR
DOCUMENTS (FINANCIAL OR OTHERWISE) WITH RESPECT TO THE BORROWER OR ITS
SUBSIDIARIES AS THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS MAY REASONABLY
REQUEST IN WRITING.

 

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

 

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

 

8.04  Corporate Franchises.  The Borrower will, and will cause each of its
Subsidiaries, to do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents (if any) used in its business; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales or other dispositions of
assets, consolidations or mergers by or involving the Borrower or any of its
Subsidiaries which are permitted in accordance with Section 9.02, (ii) any
Subsidiary Guarantor from changing the jurisdiction of its organization to the
extent permitted by Section 9.11 or (iii) the abandonment by the Borrower or any
of its Subsidiaries of any rights, franchises, licenses and patents that could
not be reasonably expected to have a Material Adverse Effect.

 

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

 

8.06  Compliance with Environmental Laws.  (a)  The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
Environmental Laws applicable to the ownership or use of any Vessel or property
now or hereafter owned or operated by the Borrower or any of its Subsidiaries,
will within a reasonable time period pay or cause to be paid all costs and
expenses incurred in connection with such compliance (except to the extent being
contested in good faith), and will keep or cause to be kept all such Vessel or
property free and clear of any Liens imposed pursuant to such Environmental
Laws.  Neither the Borrower nor any of its Subsidiaries will generate, use,
treat, store, release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Vessel or property
now or hereafter owned or operated or occupied by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any ports or property except in material compliance with all
applicable Environmental Laws and as reasonably required by the trade in
connection with the operation, use and maintenance of any such property or
otherwise in connection with their businesses.  The Borrower will, and will
cause each of its Subsidiaries to, maintain insurance on the Vessels in at least
such amounts as are in accordance with normal industry practice for similarly
situated insureds, against losses from oil spills and other environmental
pollution.

 

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

 

8.07  ERISA.  As soon as reasonably possible and, in any event, within ten
(10) days after the Borrower or any of its Subsidiaries or any ERISA Affiliate
knows or has reason to

 

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know of the occurrence of any of the following, the Borrower will deliver to the
Administrative Agent, with sufficient copies for each of the Lenders, a
certificate of the senior financial officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto:  that a Reportable
Event has occurred (except to the extent that the Borrower has previously
delivered to the Administrative Agent a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation
Section 4043 is reasonably expected to occur with respect to such Plan within
the following 30 days; that an accumulated funding deficiency, within the
meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Plan; that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not been
timely made and such failure could result in a material liability for the
Borrower or any of its Subsidiaries; that a Plan has been or may be reasonably
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA with a material amount of unfunded benefit liabilities; that a
Plan (in the case of a Multiemployer Plan, to the best knowledge of the Borrower
or any of its Subsidiaries or ERISA Affiliates) has a material Unfunded Current
Liability; that proceedings may be reasonably expected to be or have been
instituted by the PBGC to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a material delinquent contribution
to a Plan; that the Borrower, any of its Subsidiaries or any ERISA Affiliate
will or may reasonably expect to incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that the
Borrower, or any of its Subsidiaries may incur any material liability pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan.  Upon
request, the Borrower will deliver to the Administrative Agent with sufficient
copies to the Lenders (i) a complete copy of the annual report (on Internal
Revenue Service Form 5500-series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service and (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA.  In addition to any certificates
or notices delivered to the Lenders pursuant to the first sentence hereof,
copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any notices received by the Borrower,
any of its Subsidiaries or any ERISA Affiliate

 

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

 

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

 

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

 

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

 

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

 

(b)           The Borrower hereby authorizes the Collateral Agent to file one or
more financing or continuation statements under the UCC (or any non-U.S.
equivalent thereto), and amendments thereto, relative to all or any part of the
Collateral without the signature of the Borrower, where permitted by law.  The
Collateral Agent will promptly send the Borrower a

 

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copy of any financing or continuation statements which it may file without the
signature of the Borrower and the filing or recordation information with respect
thereto.

 

(c)           The Borrower and/or its Subsidiaries will deliver all Security
Documents executed by a Subsidiary organized under the laws of the Isle of Man
to the Isle of Man Financial Supervision Committee prior to (x) for all Security
Documents entered into on the Initial Borrowing Date, the 30th day following the
Initial Borrowing Date and (y) thereafter, within 30 days of the execution and
delivery of such Security Document.

 

8.12  Deposit of Earnings.  Each Credit Party shall cause the earnings derived
from each of the respective Mortgaged Vessels, to the extent constituting
Earnings and Insurance Collateral, to be deposited by the respective account
debtor in respect of such earnings into one or more of the Concentration
Accounts maintained for such Credit Party or the Borrower from time to time. 
Without limiting any Credit Party’s obligations in respect of this Section 8.12,
each Credit Party agrees that, in the event it receives any earnings
constituting Earnings and Insurance Collateral, or any such earnings are
deposited other than in one of the Concentration Accounts, it shall promptly
deposit all such proceeds into one of the Concentration Accounts maintained for
such Credit Party or the Borrower from time to time.

 

8.13  Ownership of Subsidiaries.  (a)  Other than “director qualifying shares”,
the Borrower shall at all times directly or indirectly own 100% of the capital
stock or other equity interests of each of the Subsidiary Guarantors.

 

(b)           The Borrower shall cause each Subsidiary Guarantor to at all times
be directly owned by one or more Credit Parties.

 

8.14  Flag of Mortgaged Vessels.  (a)  The Borrower shall, and shall cause each
of its Subsidiaries to, cause each Mortgaged Vessel to be registered under the
laws and flag of (x) the Republic of Liberia or (y) the Republic of Marshall
Islands (each jurisdiction in clauses (x) and (y), an “Acceptable Flag
Jurisdiction”).  Notwithstanding the foregoing, any Credit Party may transfer a
Mortgaged Vessel to another Acceptable Flag Jurisdiction pursuant to a Flag
Jurisdiction Transfer.

 

8.15  Vessel Delivery Dates.  On or prior to each date on which a Vessel is to
be delivered to a Credit Party pursuant to the relevant Construction
Contract(s), such Credit Party shall have:

 

(a)           duly authorized, executed and delivered an Assignment of Earnings,
an Assignment of Insurances, together covering all of such Credit Party’s
present and future Earnings and Insurance Collateral, in each case together
with:

 

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

 

(ii)           certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as

 

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debtor and that are filed in the jurisdictions referred to in
Section 8.15(i) above, together with copies of such other financing statements
(none of which shall cover the Collateral except to the extent evidencing
Permitted Liens unless in respect of which the Collateral Agent shall have
received Form UCC-3 Termination Statements (or such other termination statements
as shall be required by local law) fully executed for filing if required by
applicable laws); and

 

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

 

(b)           duly authorized, executed and delivered, and caused to be recorded
in the appropriate vessel registry a Vessel Mortgage with respect to such Vessel
being delivered and the Vessel Mortgage shall be effective to create in favor of
the Collateral Agent and/or the Lenders a legal, valid and enforceable first
priority security interest, in and lien upon such Vessel, subject only to
Permitted Liens.  Except as specifically provided above, all filings, deliveries
of instruments and other actions necessary or desirable in the reasonable
opinion of the Collateral Agent to perfect and preserve such security interests
shall have been duly effected and the Collateral Agent shall have received
evidence thereof in form and substance reasonably satisfactory to the Collateral
Agent;

 

(c)           delivered to the Administrative Agent with respect to each Vessel
being delivered on such date:

 

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

 

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

 

(iii)          class certificates from a classification society listed on
Schedule X hereto or another internationally recognized classification society
acceptable to the Collateral Agent, indicating that such Vessel meets the
criteria specified in Section 7.24;

 

(iv)          if requested by the Administrative Agent, an appraisal report from
independent appraisers of such Vessel of recent date in scope, form and
substance reasonably satisfactory to the Administrative Agent; and

 

(v)           a report, in form and scope reasonably satisfactory to the
Administrative Agent, from a firm of independent marine insurance brokers
reasonably acceptable to the Administrative Agent with respect to the insurance
maintained by the Credit Parties in respect of such Vessel, together with a
certificate from such broker certifying that such insurances comply with the
requirement set forth in Section 8.03 and the Vessel Mortgages; and

 

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(d)           delivered to the Administrative Agent opinions from counsel to
such Credit Party acceptable to the Administrative Agent receiving the Vessel
opinions reasonably satisfactory to the Administrative Agent practicing in those
jurisdictions in which the Vessel is registered and/or the Credit Party owning
such Vessel is organized, which opinions shall be addressed to the
Administrative Agent and each of the Lenders and dated such Vessel Delivery
Date, which shall (x) be in form and substance reasonably acceptable to the
Administrative Agent and (y) cover the perfection of the security interests
granted pursuant to the Vessel Mortgage(s) and such other matters incident
thereto as the Administrative Agent may reasonably request.

 

8.16  Assignment of Construction Contracts and Refund Guaranties.  (a)  The
Borrower shall use its commercially reasonable efforts to obtain the consents in
the form of Exhibit Q (as modified, supplemented or amended from time to time,
each a “Consent to Assignment of Construction Contract”) required for the
assignment of each of the Construction Contracts to the Collateral Agent
pursuant to an Assignment of Construction Contract by no later than the 90th day
immediately following the Effective Date.  Upon receipt of a Consent to
Assignment of Construction Contract, the Borrower shall, and shall cause its
relevant Subsidiary to, duly authorize, execute and deliver an assignment of the
Borrower’s rights, and/or its relevant Subsidiary’s rights, under such
Construction Contract in the form of Exhibit O (as modified, supplemented or
amended from time to time, each an “Assignment of Construction Contract”),
covering all of the Borrower’s and/or its relevant Subsidiary’s present and
future interests in such Construction Contract, together with:

 

(I)            PROPER FINANCING STATEMENTS (FORM UCC-1 OR THE EQUIVALENT) FULLY
EXECUTED FOR FILING UNDER THE UCC OR IN OTHER APPROPRIATE FILING OFFICES OF EACH
JURISDICTION AS MAY BE NECESSARY OR, IN THE REASONABLE OPINION OF THE COLLATERAL
AGENT, DESIRABLE TO PERFECT THE SECURITY INTERESTS PURPORTED TO BE CREATED BY
SUCH ASSIGNMENT OF CONSTRUCTION CONTRACT;

 

(II)           CERTIFIED COPIES OF REQUESTS FOR INFORMATION OR COPIES
(FORM UCC-11), OR EQUIVALENT REPORTS, LISTING ALL EFFECTIVE FINANCING STATEMENTS
THAT NAME ANY CREDIT PARTY AS DEBTOR AND THAT ARE FILED IN THE JURISDICTIONS
REFERRED TO IN SECTION 8.16(A) ABOVE, TOGETHER WITH COPIES OF SUCH OTHER
FINANCING STATEMENTS (NONE OF WHICH SHALL COVER THE COLLATERAL EXCEPT TO THE
EXTENT EVIDENCING PERMITTED LIENS OR IN RESPECT OF WHICH THE COLLATERAL AGENT
SHALL HAVE RECEIVED FORM UCC-3 TERMINATION STATEMENTS (OR SUCH OTHER TERMINATION
STATEMENTS AS SHALL BE REQUIRED BY LOCAL LAW) FULLY EXECUTED FOR FILING); AND

 

(III)          EVIDENCE THAT ALL OTHER ACTIONS NECESSARY OR, IN THE REASONABLE
OPINION OF THE COLLATERAL AGENT, DESIRABLE TO PERFECT AND PROTECT THE SECURITY
INTERESTS PURPORTED TO BE CREATED BY SUCH ASSIGNMENT OF CONSTRUCTION CONTRACT
HAVE BEEN TAKEN.

 

(b)           The Borrower and/or each Subsidiary that is a beneficiary under
any Refund Guaranty shall duly authorize, execute and deliver an assignment of
the Borrower’s and/or its relevant Subsidiary’s rights under each Refund
Guaranty received after the Initial Borrowing Date an Assignment of Refund
Guaranty covering all of the Borrower’s or such Subsidiary’s present and future
interests in such Refund Guaranty, together with:

 

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(I)            PROPER FINANCING STATEMENTS (FORM UCC-1 OR THE EQUIVALENT) FULLY
EXECUTED FOR FILING UNDER THE UCC OR IN OTHER APPROPRIATE FILING OFFICES OF EACH
JURISDICTION AS MAY BE NECESSARY OR, IN THE REASONABLE OPINION OF THE COLLATERAL
AGENT, DESIRABLE TO PERFECT THE SECURITY INTERESTS PURPORTED TO BE CREATED BY
SUCH ASSIGNMENT OF REFUND GUARANTY AND;

 

(II)           EVIDENCE THAT ALL OTHER ACTIONS NECESSARY OR, IN THE REASONABLE
OPINION OF THE COLLATERAL AGENT, DESIRABLE TO PERFECT AND PROTECT THE SECURITY
INTERESTS PURPORTED TO BE CREATED BY SUCH ASSIGNMENT OF REFUND GUARANTY HAVE
BEEN TAKEN.

 

SECTION 9.  Negative Covenants.  The Borrower hereby covenants and agrees that
on and after the Initial Borrowing Date and until all Commitments and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Commitment Commission and all other Obligations incurred
hereunder and thereunder, are paid in full:

 

9.01  Liens.  The Borrower will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any Collateral, whether now owned or hereafter acquired, or sell any such
Collateral subject to an understanding or agreement, contingent or otherwise, to
repurchase such Collateral (including sales of accounts receivable with recourse
to the Borrower or any of its Subsidiaries), or assign any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 9.01 shall not prevent the
creation, incurrence, assumption or existence of the following (Liens described
below are herein referred to as “Permitted Liens”):

 

(i)            inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or governmental
charges or levies being contested in good faith and by appropriate proceedings
for which adequate reserves have been established in accordance with generally
accepted accounting principles;

 

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

 

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

 

(iv)          Permitted Encumbrances;

 

(v)           Liens created pursuant to the Security Documents;

 

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

 

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

 

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

 

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

 

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

 

(i)            the Borrower and each of its Subsidiaries may sell, lease or
otherwise dispose of any Mortgaged Vessels, provided that (x)(A) such sale is
made at fair market value (as determined in accordance with the appraisal report
most recently delivered to the Administrative Agent (or obtained by the
Administrative Agent) pursuant to Section 8.01(c) or delivered at the time of
such sale to the Administrative Agent by the Borrower), (B) 100% of the
consideration in respect of such sale shall consist of cash or Cash Equivalents
received by the Borrower, to the respective Subsidiary Guarantor which owned
such Mortgaged Vessel, on the date of consummation of such sale, and (C) the Net
Cash Proceeds of such sale or other disposition shall be applied as required by
Section 4.02 to permanently reduce the Total Commitment (and to the extent
required by Section 4.02(a), repay the Loans and/or cash collateralize the
Letters of Credit) or (y) so long as no Default or Event of Default has occurred
and is continuing (or would arise

 

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after giving effect thereto) and so long as all representations and warranties
made by the Borrower pursuant to Section 7 of this Agreement are true and
correct both before and after any such exchange, such Mortgaged Vessel is
exchanged for an Acceptable Replacement Vessel pursuant to a Vessel Exchange;
provided further that in the case of both clause (x) and (y) above, that the
Borrower shall have delivered to the Administrative Agent an officer’s
certificate, certified by the senior financial officer of the Borrower,
demonstrating pro forma compliance (giving effect to such Collateral Disposition
and, in the case of calculations involving the appraised value of Mortgaged
Vessels, using valuations consistent with the appraisal report most recently
delivered to the Administrative Agent (or obtained by the Administrative Agent)
pursuant to Section 8.01(c)) with each of the covenants set forth in Sections
9.07 through 9.10, inclusive, for the most recently ended Test Period (or at the
time of such sale, as applicable) and projected compliance with such covenants
for the one year period following such Collateral Disposition, in each case
setting forth the calculations required to make such determination in reasonable
detail;

 

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

 

(iii)          (A) any Subsidiary Guarantor may transfer assets or lease to or
acquire or lease assets from any other Subsidiary Guarantor, or any Subsidiary
Guarantor may be merged into any other Subsidiary Guarantor, in each case so
long as all actions necessary or desirable to preserve, protect and maintain the
security interest and Lien of the Collateral Agent in any Collateral held by any
Person involved in any such transaction are taken to the satisfaction of the
Collateral Agent and (B) any other Subsidiary of the Borrower may transfer
assets or lease to or acquire or lease assets from any other Subsidiary of the
Borrower, or any other Subsidiary of the Borrower may be merged into any other
Subsidiary of the Borrower, in each case so long as all actions necessary or
desirable to preserve, protect and maintain the security interest and Lien of
the Collateral Agent in any Collateral held by any Person involved in any such
transaction are taken to the satisfaction of the Collateral Agent; and

 

(iv)          following a Collateral Disposition permitted by this Agreement,
the Subsidiary Guarantor which owned the Vessel that is the subject of such
Collateral Disposition may dissolve, provided, that (x) all proceeds from such
Collateral Disposition shall have been applied to repayment of the Loans as
required in Section 4.02 of this Agreement, (y) all of the proceeds of such
dissolution shall be paid only to the Borrower and (z) no Event of Default is
continuing unremedied at the time of such dissolution.

 

To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, such Collateral (unless sold to the Borrower or
a Subsidiary of the Borrower) shall be sold free and clear of the Liens created
by the Security Documents, and the Administrative Agent and Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.

 

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

 

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

 

(ii)           so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof) has occurred and is
continuing, the Borrower may repurchase its outstanding equity interests (or
options to purchase such equity) theretofore held by its or any of its
Subsidiaries’ employees, officers or directors following the death, disability,
retirement or termination of employment of employees, officers or directors of
the Borrower or any of its Subsidiaries, provided that the aggregate amount
expended to so repurchase equity of the Borrower shall not exceed $1,000,000 in
any fiscal year of the Borrower;

 

(iii)          the Borrower may make, pay or declare cash Dividends; provided
that, for all Dividends paid pursuant to this clause (iii), (A) such Dividends
are paid within 90 days of the declaration thereof; (B) such Dividends paid in
respect of a fiscal quarter shall only be paid after the date of delivery of
quarterly or annual financial statements for such fiscal quarter, pursuant to
Sections 8.01(a) and (b), as the case may be, and on or prior to 45 days after
the immediately succeeding fiscal quarter, (C) no Default or Event of Default
has occurred and is continuing (or would arise after giving effect thereto) at
the time of declaration of such Dividends, (D) no Significant Default has
occurred and is continuing (or would arise after giving effect thereto) at the
time of payment of such Dividends, (E) the aggregate Dividends paid in respect
of a fiscal quarter shall not exceed the sum of the Permitted Dividend Amount
for such fiscal quarter and the Additional Permitted Shareholder Payment Amount
at the time of declaration and payment and (F) on or prior to the payment of
such Dividends,  the Borrower shall deliver to the Administrative Agent an
officer’s certificate signed by the Chief Financial Officer of the Borrower,
certifying that the requirements set forth in clauses (A) through (E) are
satisfied and setting forth the calculation of the Permitted Dividend Amount and
the Additional Permitted Shareholder Payment Amount in reasonable detail;

 

(iv)          the Borrower may make Stock Buy-Backs; provided that for all Stock
Buy-Backs made pursuant to this clause (iv), (A) no Default or Event of Default
has occurred and is continuing at the time of such Stock Buy-Back (or would
arise after giving effect thereto), (B)(x) such Stock Buy-Backs are made with
the proceeds of Loans incurred for such purpose and/or (y) the amount paid for
such Stock Buy-Backs does not

 

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exceed the Additional Permitted Shareholder Payment Amount at such time and
(C) not later than fifteen (15) days after the end of an calendar quarter in
which any Stock Buy-Back has occurred, the Borrower shall deliver to the
Administrative Agent an officer’s certificate signed by the Chief Financial
Officer of the Borrower, certifying that the requirements set forth in clauses
(A) and (B) are satisfied and setting forth the calculation the Additional
Permitted Shareholder Payment Amount in reasonable detail.

 

For avoidance of doubt, nothing herein shall prohibit the Borrower from issuing
or distributing to its shareholders rights to acquire common stock or Qualified
Preferred Stock or redeeming any such rights, provided however, the aggregate
amount of cash used for any such redemption shall not exceed $10,000,000 in any
calendar year.

 

9.04  Indebtedness.  (a)  The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness (other than Indebtedness incurred pursuant to this Agreement and
the other Credit Documents pursuant to the commitments thereunder in effect on
the Effective Date) which would cause any Default or Event of Default, either on
a pro forma basis for the most recently ended Test Period (or at the time of
such incurrence, as applicable), or on a projected basis for the one year period
following such incurrence, with each of the covenants set forth in Sections 9.07
through 9.10, inclusive; provided that in the event any Indebtedness to be
incurred by the Borrower or any of its Subsidiaries in a single issuance or
transaction or series of related issuances or transactions will exceed
$10,000,000, the Borrower shall have delivered to the Administrative Agent an
officer’s certificate, certified by the senior financial officer of the
Borrower, demonstrating compliance with the preceding provisions of this
Section 9.04 and setting forth the calculations required to make such
determination for the most recently ended Test Period in reasonable detail.

 

(b)           Notwithstanding anything to the contrary set forth above in this
Section 9.04, no Subsidiary Guarantor described in clause (x) of the definition
thereof shall incur any Indebtedness for borrowed money (including contingent
liabilities in respect thereof) except for (i) Indebtedness incurred pursuant to
this Agreement and the other Credit Documents, (ii) guaranties provided pursuant
to the Senior Note Guaranty and (iii) intercompany Indebtedness permitted
pursuant to Section 9.05(iii).

 

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

 

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

 

(ii)           so long as no Event of Default exists or would result therefrom,
the Borrower and its Subsidiaries may make loans and advances in the ordinary
course of business to its employees so long as the aggregate principal amount
thereof at any time

 

 

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outstanding which are made on or after the Effective Date (determined without
regard to any write-downs or write-offs of such loans and advances) shall not
exceed $2,000,000;

 

(iii)          the Subsidiary Guarantors may make intercompany loans and
advances to the Borrower and between or among one another, and Subsidiaries of
the Borrower other than the Subsidiary Guarantors may make intercompany loans
and advances to the Borrower or any other Subsidiary of the Borrower, provided
that any loans or advances to the Borrower or any Subsidiary Guarantors pursuant
to this Section 9.05(iii) shall be subordinated to the Obligations of the
respective Credit Party pursuant to written subordination provisions in the form
of Exhibit N;

 

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

 

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

 

(VI)          THE BORROWER MAY MAKE INVESTMENTS IN ITS NON-WHOLLY-OWNED
SUBSIDIARIES; PROVIDED THAT THE AGGREGATE AMOUNT OF ALL INVESTMENTS UNDER THIS
CLAUSE (VI) SHALL NOT EXCEED $100,000,000; AND

 

(vii)         Investments existing on the Effective Date and described on
Schedule XI, without giving effect to any additions thereto or replacement
thereof.

 

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

 

(i)            Shareholders Distributions may be paid to the extent provided in
Section 9.03;

 

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

 

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

 

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

 

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

 

9.07  Minimum Cash Balance.  The Borrower will not permit the sum of (x)
unrestricted cash and Cash Equivalents held by the Borrower and its Subsidiaries
plus (y) the lesser of (i) the Total Available Unutilized Commitment and
(ii) $50,000,000, to be less than $100,000,000 at any time.

 

9.08  Maximum Leverage Ratio.  The Borrower will not permit the Leverage Ratio
on the last day of any fiscal quarter of the Borrower to be greater than
0.65:1.00.

 

9.09  Minimum Consolidated Net Worth.  The Borrower will not permit the
Consolidated Net Worth at any time to be less than the Applicable Minimum Net
Worth Amount at such time.

 

9.10  Collateral Maintenance.  The Borrower will not permit the sum of

 

(x) the aggregate fair market value of all Mortgaged Vessels owned by the
Borrower and its Subsidiaries which have not been sold, transferred, lost or
otherwise disposed of, on an individual charter-free basis, at any time (such
value, the “Aggregate Mortgaged Vessel Value”), as determined by the most recent
appraisal delivered by the Borrower to the Administrative Agent or obtained by
the Administrative Agent in accordance with Section 8.01(c), and

 

(y) the Aggregate Construction Contract Value

 

to equal less than 125% of the Total Commitment at such time; provided that, so
long as any default in respect of this Section 9.10 is not caused by any
voluntary Collateral Disposition, such default shall not constitute an Event of
Default so long as within 60 days of the occurrence of such default, the
Borrower shall either (i) post additional collateral satisfactory to the
Required Lenders, pursuant to security documentation reasonably satisfactory in
form and substance to the Collateral Agent, sufficient to cure such default (and
shall at all times during such period and prior to satisfactory completion
thereof, be diligently carrying out such actions) or (ii) make such reductions
of the Total Commitment in an amount sufficient to cure such default and repay
the Loans and/or cash collateralize the Letters of Credit to the extent required
by Section 4.02(a) (it being understood that any action taken in respect of this
proviso shall only be effective to cure such default pursuant to this
Section 9.10 to the extent that no Default or Event of Default exists hereunder
immediately after giving effect thereto).

 

9.11  Limitation on Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc.  (a)  The Borrower will not, and will not permit
any Subsidiary Guarantor to amend, modify or change its Certificate of
Incorporation, Certificate of Formation (including, without limitation, by the
filing or modification of any certificate of designation), By-Laws, limited
liability company agreement, partnership agreement (or equivalent organizational
documents) or any agreement entered into by it with respect to its capital stock
or membership interests (or equivalent equity interests) (including any
Shareholders’ Agreement), or enter into any new agreement with respect to its
capital stock or membership interests (or equivalent

 

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interests), other than any amendments, modifications or changes or any such new
agreements which are not in any way materially adverse to the interests of the
Lenders.

 

(b)           Other than as contemplated by Sections 7.08 and 9.03 in this
Agreement, the Borrower will not, and will not permit any of its Subsidiaries to
amend or modify, or permit the amendment or modification of, any provision of
any Senior Note Document or change thereto if the effect of such amendment or
change is to (i) increase the interest rate on the Senior Notes, (ii) change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, (iii) increase the outstanding principal amount of the Senior Notes,
(iv) change any event of default or condition to an event of default with
respect thereto (other than to (A) eliminate any such event of default or
condition to an event of default, (B) increase any grace period related thereto
or (C) modify or amend any event of default or condition to an event of default
in any manner so as to make such event of default or condition less restrictive
to the Borrower), (v) together with all other amendments or changes made, is to
increase materially the obligations of the Borrower thereunder or to confer any
additional rights on the holders of such Senior Notes (or a trustee or other
representative on their behalf), which would reasonably be expected to be
materially adverse to any Lenders, or (vi) make all other terms of the Senior
Note Documents (including, without limitation, with respect to the amortization,
redemption provisions, maturities, covenants, defaults and remedies) less
favorable in any material respect to the Borrower and its Subsidiaries than
those previously existing.  Notwithstanding the foregoing, no amendments or
modifications of any provision of any Senior Note Document shall be incurred if
any Default or Event of Default has occurred and is continuing at the time of
such amendment or modification (or would arise after giving effect thereto).

 

Notwithstanding the foregoing provisions of this Section 9.11, upon not less
than 30 days prior written notice to the Administrative Agent and so long as no
Default or Event of Default exists and is continuing, any Subsidiary Guarantor
may change its jurisdiction of organization to another jurisdiction reasonably
satisfactory to the Administrative Agent, provided that such Subsidiary
Guarantor shall promptly take all actions reasonably deemed necessary by the
Collateral Agent to preserve, protect and maintain, without interruption, the
security interest and Lien of the Collateral Agent in any Collateral owned by
such Subsidiary Guarantor to the satisfaction of the Collateral Agent, and such
Subsidiary Guarantor shall have provided to the Administrative Agent and the
Lenders such opinions of counsel as may be reasonably requested by the
Administrative Agent to assure itself that the conditions of this proviso have
been satisfied.

 

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

 

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or a Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any agreement entered into by the Borrower or a Subsidiary of the
Borrower in the ordinary course of business, (v) any holder of a Permitted Lien
may restrict the transfer of the asset or assets subject thereto and
(vi) restrictions which are not more restrictive than those contained in this
Agreement contained in any documents governing any Indebtedness incurred after
the Effective Date in accordance with the provisions of this Agreement.

 

9.13  Limitation on Issuance of Capital Stock.  (a)  The Borrower will not
issue, and will not permit any Subsidiary to issue, any preferred stock (or
equivalent equity interests) other than Qualified Preferred Stock.

 

(b)           The Borrower will not permit any Subsidiary Guarantor to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and additional issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any class of the capital stock of such Subsidiary and (iii) in the case of
Foreign Subsidiaries of the Borrower, to qualify directors to the extent
required by applicable law.  All capital stock of any Subsidiary Guarantor
issued in accordance with this Section 9.13(b) shall be delivered to the
Collateral Agent pursuant to the Pledge Agreement.

 

9.14  Business.  The Borrower and its Subsidiaries will not engage in any
business other than the businesses in which they are engaged in as of the
Effective Date and activities directly related thereto, and similar or related
businesses.  It being understood that no Subsidiary Guarantor described in
clause (x) of the definition thereof will engage directly or indirectly in any
business other than the business of owning and operating Mortgaged Vessels and
businesses ancillary or complimentary thereto.

 

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

 

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

 

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

 

10.03  Covenants.  Any Credit Party shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in
Section 8.01(f)(i), 8.08, 8.13 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than Section 8.16) and, in the case of this
clause (ii),

 

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such default shall continue unremedied for a period of 30 days after written
notice to the Borrower by the Administrative Agent or any of the Lenders; or

 

10.04  Default Under Other Agreements.  (i)  The Borrower or any of its
Subsidiaries shall default in any payment of any Indebtedness (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) the Borrower or any
of its Subsidiaries shall default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the Obligations)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is required),
any such Indebtedness to become due prior to its stated maturity or (iii) any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof, provided that it shall not be a Default or Event of Default
under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii), inclusive,
exceeds $10,000,000; or

 

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

 

10.06  ERISA.  (a)  Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof under Section 412 of the Code or
Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in

 

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subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have had
or is reasonably likely to have a trustee appointed to administer such Plan, any
Plan which is subject to Title IV of ERISA is, shall have been or is reasonably
likely to be terminated or to be the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made with respect to a Plan or a Foreign Pension Plan is not
timely made, the Borrower or any of its Subsidiaries or any ERISA Affiliate has
incurred or events have happened, or reasonably expected to happen, that will
cause it to incur any liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, or the Borrower, or any of its Subsidiaries,
has incurred or is reasonably likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the reasonable opinion of the Required Lenders, has
had, or could reasonably be expected to have, a Material Adverse Effect; or

 

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

 

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

 

10.09  Judgments.  One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate for the Borrower
and its Subsidiaries a liability (not paid or fully covered by a reputable and
solvent insurance company)

 

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and such judgments and decrees either shall be final and non-appealable or shall
not be vacated, discharged or stayed or bonded pending appeal for any period of
60 consecutive days, and the aggregate amount of all such judgments, to the
extent not covered by insurance, exceeds $10,000,000; or

 

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

 

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 10.05
shall occur, the result which would occur upon the giving of written notice by
the Administrative Agent to the Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice): 
(i) declare the Total Commitments terminated, whereupon all Commitments of each
Lender shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of all Loans
and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; (iii) terminate any Letter of Credit that may be terminated
in accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence and during the
continuance of an Event of Default specified in Section 10.05, it will pay) to
the Collateral Agent at the Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all Letters of Credit issued for the Borrower and then outstanding and
(v) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Security Documents.

 

SECTION 11.  Definitions and Accounting Terms.

 

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

 

“Acceptable Flag Jurisdiction” shall have the meaning provided in Section 8.14.

 

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

 

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“Additional Blocked Commitment” shall mean an amount which may be increased
pursuant to Section 4.02(c) and/or Section 4.02(d) and decreased pursuant to
Section 1.13.

 

“Additional Permitted Shareholder Payment Amount” shall mean, at a given point
in time, (x) the aggregate Net Cash Proceeds from the sale of the Non-Collateral
Vessels less (y) the aggregate amount by which any prior quarterly Dividends
have exceeded the Permitted Dividend Amount for the relevant fiscal quarter less
(z) the aggregate amount of any cash paid for Stock Buy-Backs (other than Stock
Buy-Backs to the extent made pursuant to Section 9.03(iv)(B)(x)).  The
Additional Permitted Shareholder Payment Amount may not be less than zero.

 

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

 

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

 

“Agents” shall mean, collectively, the Administrative Agent, the Collateral
Agent, each Joint Lead Arranger and each Issuing Lender.

 

“Aggregate Construction Contract Value” shall mean, at any time, the aggregate
Construction Contract Value of the Vessels at such time subject to a
Construction Contract which have not been delivered at such time.

 

“Aggregate Mortgaged Vessel Value” shall have the meaning set forth in
Section 9.10.

 

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

 

“Annual Fleet Maintenance Reserve Amount” shall mean, for any fiscal year, the
aggregate amount of funds budgeted by the Borrower for such fiscal year to
maintain and drydock the Borrower’s fleet during such fiscal year in order to
maintain each Vessel in the fleet in accordance with the provisions contained in
the Credit Agreement and the other Credit

 

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Documents, such amount to be approved by the Borrower’s Board of Directors
acting reasonably and in good faith.

 

“Annual Fleet Renewal Reserve Amount” shall mean, for any fiscal year, the
amount determined by the Borrower’s Board of Directors acting reasonably to be
an amount which should be reserved and/or expended during such fiscal year for
renewal capital expenditures and/or vessel acquisitions to insure the indefinite
renewal of the Borrower’s fleet, such determination to take into account, inter
alia the remaining life and prevailing asset value of the fleet.

 

“Applicable Margin” shall mean a percentage per annum equal to 0.75%; provided
that (x) for so long as the Borrower’s Long Term Foreign Issuer Credit Rating
from S&P is BB- or below, the “Applicable Margin” shall be 1.00% or (y) if, and
for so long as, the Borrower’s Long Term Foreign Issuer Credit Rating from S&P
is withdrawn, the “Applicable Margin” from and after each day of delivery of any
certificate delivered in accordance with the first sentence of the following
paragraph (each, a “Start Date”) to and including the applicable End Date
described below, the Applicable Margin shall be (i) if the Borrower’s Leverage
Ratio for the most recently ended fiscal quarter is equal to or lower than 0.45
to 1.00, 0.75% or (ii) if the Borrower’s Leverage Ratio for the most recently
ended fiscal quarter is greater than 0.45 to 1.00, 1.00%.

 

The Leverage Ratio used in a determination of Applicable Margin shall be
determined based on the delivery of a certificate of the Borrower (each, a
“Quarterly Pricing Certificate”) by an Authorized Officer of the Borrower to the
Administrative Agent (with a copy to be sent by the Administrative Agent to each
Lender), within 45 days of the last day of any fiscal quarter (90 days in the
case of the fourth fiscal quarter in each fiscal year) of the Borrower, which
certificate shall set forth the calculation of the Leverage Ratio as at the last
day of such fiscal quarter and the Applicable Margin which shall be thereafter
applicable (until same are changed in accordance with the following sentences). 
The Applicable Margin so determined shall apply, from the relevant Start Date to
the earliest of (x) the date on which the next certificate is delivered to the
Administrative Agent or (y) the date which is 45 days (90 days in the case of
the fourth fiscal quarter in each fiscal year) following the last day of the
fiscal quarter in which the previous Start Date occurred (such earliest date,
the “End Date), at which time, if no certificate has been delivered to the
Administrative Agent indicating an entitlement to new Applicable Margin (and
this commencing a new Start Date), the Applicable Margin shall be 1.00%.

 

“Applicable Minimum Net Worth Amount” shall mean, at any time of determination
thereof, an amount equal to the sum of $650,000,000, plus 50% of Consolidated
Net Income (to the extent positive) for each fiscal quarter of the Borrower
ended after June 30, 2005, plus 100% of the Net Cash Proceeds from any issuance
or sale of equity of the Borrower or any of its Subsidiaries after June 30, 2005
(except, in the case of such Subsidiaries, any sale of such equity to the
Borrower or another Subsidiary permitted hereunder).

 

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

 

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“Assignment of Construction Contract” shall have the meaning provided in
Section 8.16.

 

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

 

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

 

“Assignment of Refund Guaranty” shall have the meaning provided in Section 5.17.

 

“Available Commitment” shall mean for each Lender, such Lender’s Commitment less
such Lender’s pro rata share of (x) the Blocked Commitment and (y) the
Additional Blocked Commitment.

 

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

 

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

 

“Blocked Commitment” shall mean on each date following the 90th day from and
after the Initial Borrowing Date, $25,000,000 multiplied by the number of
Excluded Vessels on such date.

 

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

 

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

 

“Borrowing” shall mean the borrowing of Loans from all the Lenders (other than
any Lender which has not funded its share of a Borrowing in accordance with this
Agreement) having Commitments on a given date having the same Interest Period.

 

“Borrowing Date” shall mean the Initial Borrowing Date and each date on or after
the Initial Borrowing Date and prior to the Maturity Date on which a Borrowing
occurs.

 

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

 

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

 

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

 

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

 

“Change of Control” shall mean (i) the Borrower shall at any time and for any
reason fail to own, directly or indirectly, 100% of the capital stock or other
equity interests of each Subsidiary Guarantor, (ii) the sale, lease or transfer
of all or substantially all of the Borrower’s assets to any Person or group (as
such term is used in Section 13(d)(3) of the Exchange Act), (iii) the
liquidation or dissolution of the Borrower, (iv) any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) other than one or more of
the Permitted Holders shall at any time become the owner, directly or
indirectly, beneficially or of record, of shares representing more than 30% of
the outstanding voting or economic equity interests of the Borrower, (v) the
replacement of a majority of the directors on the board of directors of the
Borrower over a two-year period from the directors who constituted the board of
directors of the Borrower at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the board of
directors of the Borrower then still in office who either were members of such
board of directors at the beginning of such period or whose election as a member
of such Board of Directors was previously so approved or (vi) a “change of
control” or similar event shall occur as provided in any outstanding
Indebtedness (excluding Indebtedness with an aggregate principal amount of less
than $20,000,000) of Borrower or any of its Subsidiaries (or the documentation
governing the same).

 

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

 

“Collateral” shall mean all property (whether real or personal) with respect to
which any security interests have been granted (or purported to be granted)
pursuant to any Security Document, including, without limitation, all Pledge
Agreement Collateral, all Earnings and Insurance Collateral, all Mortgaged
Vessels, all property (whether real or personal) subject to an Assignment of
Refund Guaranty, all property (whether real or personal) subject to an

 

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Assignment of Construction Contract and all cash and Cash Equivalents at any
time delivered as collateral thereunder or as required hereunder.

 

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

 

“Collateral Disposition” shall mean (i) the sale, lease, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person other than
the Borrower or a Subsidiary Guarantor of any Mortgaged Vessel or (ii) any Event
of Loss of any Mortgaged Vessel.

 

“Commitment” shall mean, for each Lender, the amount set forth opposite such
Lender’s name in Schedule I hereto as the same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Lender pursuant to
Section 1.12 or 13.04(b).

 

“Commitment Commission” shall have the meaning provided in Section 3.01(a).

 

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

 

“Consent to Assignment of Construction Contract” shall have the meaning provided
in Section 8.16(a).

 

“Consolidated Current Assets” shall mean, at any time, the consolidated current
assets of the Borrower and its Subsidiaries determined in accordance with GAAP.

 

“Consolidated Current Liabilities” shall mean, at any time, the consolidated
current liabilities of the Borrower and its Subsidiaries at such time determined
in accordance with GAAP, minus the current portion of any long-term Indebtedness
of the Borrower and its Subsidiaries to the extent otherwise included therein.

 

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

 

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

 

“Consolidated Net Interest Expense” shall mean, for any period (i) the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion

 

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of Capitalized Lease Obligations of the Borrower and its Subsidiaries
representing the interest factor for such period, minus (ii) each interest
income of the Borrower and its Subsidiaries for such period and the amortization
of any deferred financing costs incurred in connection with this Agreement, the
Existing Credit Agreement and the Senior Note Documents to the extent otherwise
included in the calculations thereof.

 

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

 

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

 

“Construction Contracts” shall mean each contract listed on Schedule XIV.

 

“Construction Contract Value” shall mean at any time with respect to a Vessel,
(i) if prior to the date on which an Assignment of Construction Contract, a
consent to Assignment of Construction Contract and other documents contemplated
by Section 8.16 are delivered with respect to the Contraction Contract related
to such Vessel are delivered, the aggregate amount of cash progress payments
made to the builder(s) under such Construction Contract, and (ii) on or after
the date the agreements and documents described in clause (i) with respect to
the Construction Contract related to such Vessel are delivered, the fair market
value of such Vessel on an “as-built” basis and an individual charter-free basis
less the aggregate payments which remain to be paid by the Borrower and its
Subsidiaries under such Construction Contract, provided that if (x) a Vessel
subject to a Construction Contract is involved in a Collateral Disposition, (y)
the Construction Contracts related to a Vessel subject to a Construction
Contract are sold or terminated or (z) any such Vessel is not delivered, and the
requirements of Section 8.15 have not been satisfied, on or before the Delivery
Deadline for such Vessel, the Construction Contract Value of such Vessel shall
be zero.

 

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

 

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the terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.

 

“Credit Documents” shall mean this Agreement, each Note, each Security Document,
the Subsidiaries Guaranty and, after the execution and delivery thereof, each
additional guaranty or additional security document executed pursuant to
Section 8.11.

 

“Credit Event” shall mean the making of any Loan.

 

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

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

 

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

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

 

“Delivery Deadline” shall mean for a Vessel subject to a Construction Contract,
the date set forth opposite such Vessel below:

 

Vessel

 

Delivery Date

 

 

 

Hull No. 038

 

June 29, 2006

 

 

 

Hull No. 039

 

January 29, 2007

 

 

 

Hull No. 060

 

December 29, 2007

 

 

 

Hull No. 061

 

April 30, 2008

 

“Dividend” with respect to any Person shall mean that such Person or any
Subsidiary of such Person has declared or paid a dividend or returned any equity
capital to its stockholders or members or the holders of options or warrants
issued by such Person with respect to its capital stock or membership interests
or authorized or made any other distribution, payment or delivery of property
(other than common stock, Qualified Preferred Stock or the right to purchase any
of such stock of such Person) or cash to its stockholders or members or the
holders of options or warrants issued by such Person with respect to its capital
stock or membership interests as such.  Without limiting the foregoing,
“Dividends” with respect to any Person shall also include all payments made or
required to be made by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.

 

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“Documents” shall mean the Credit Documents.

 

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

 

“Drawing” has the meaning provided in Section 2.04(b).

 

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

 

“Effective Date” shall have the meaning provided in Section 13.10.

 

“Eligible Transferee” shall mean and include a commercial bank, insurance
company, financial institution, fund or other Person which regularly purchases
interests in loans or extensions of credit of the types made pursuant to this
Agreement, any other Person which would constitute a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act as in effect on
the Effective Date or other “accredited investor” (as defined in Regulation D of
the Securities Act).

 

“End Date” shall have the meaning provided in the definition of Applicable
Margin.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Eurodollar Rate” shall mean with respect to each Interest Period for a Loan,
(a) the offered rate (rounded upward to the nearest 1/16 of one percent) for
deposits of Dollars for a period equivalent to such period at or about
11:00 A.M. (London time) on the second Business Day before the first day of such
period as is displayed on Telerate page 3750 (British Bankers’ Association
Interest Settlement Rates) (or such other page as may replace such page 3750 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 dated August 1985)), provided that if on such date no such
rate is so displayed, the Eurodollar Rate for such period shall be the rate
quoted to the Administrative Agent as the offered rate for deposits of Dollars
in an amount approximately equal to the amount in relation to which the
Eurodollar Rate is to be determined for a period equivalent to such applicable
Interest Period by prime banks in the London interbank Eurodollar market at or
about 11:00 A.M. (London time) on the second Business Day before the first day
of such period, in each case divided (and rounded upward to the nearest 1/16 of
1%) by (b) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D). 

 

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

 

“Event of Loss” shall mean any of the following events: (x) the actual or
constructive total loss of a Vessel or the agreed or compromised total loss of a
Vessel; or (y) the capture, condemnation, confiscation, requisition, purchase,
seizure or forfeiture of, or any taking of title to, a Vessel.  An Event of Loss
shall be deemed to have occurred: (i) in the event of an actual loss of a
Vessel, at the time and on the date of such loss or if that is not known at noon
Greenwich Mean Time on the date which such Vessel was last heard from; (ii) in
the event of damage which results in a constructive or compromised or arranged
total loss of a Vessel, at the time and on the date of the event giving rise to
such damage; or (iii) in the case of an event referred to in clause (y) above,
at the time and on the date on which such event is expressed to take effect by
the Person making the same.  Notwithstanding the foregoing, if such Vessel shall
have been returned to the Borrower following any event referred to in clause (y)
above prior to

 

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the date upon which payment is required to be made under Section 4.02(c) hereof,
no Event of Loss shall be deemed to have occurred by reason of such event.

 

“Excluded Vessels” shall mean any Vessel subject to a Construction Contract
until, the earliest of (x) the delivery of an Assignment of Construction
Contract, a consent to the Assignment of Construction Contract and all other
document contemplated by Section 8.16, (y) the taking of all actions and the
delivery of all documents (including, but not limited to, security documents and
opinions) as contemplated by Section 8.15 or (z) any Collateral Disposition
involving such Vessel or the sale or termination of the related Construction
Contract.

 

“Existing Credit Agreement” shall mean the Credit Agreement, dated July 1, 2004,
among the Borrower, the lenders from time to time party thereto, and Nordea Bank
Finland plc, New York Branch, as administrative agent (as amended, restated,
supplemented and/or modified as of the date hereof).

 

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

 

“Existing Letter of Credit” shall have the meaning provided in Section 2.01(d).

 

“Facing Fee” shall have the meaning provided in Section 3.01(d).

 

“Federal Funds Rate” shall mean, for any day, an interest rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published for such day (or, if such day is not a Business Day, for
the immediately preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations at approximately 11:00 A.M. (New York time) on such
day on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent in its
sole discretion.

 

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

 

(I)            ON EACH FLAG JURISDICTION TRANSFER DATE, THE CREDIT PARTY WHICH
IS CONSUMMATING A FLAG JURISDICTION TRANSFER ON SUCH DATE SHALL HAVE DULY
AUTHORIZED, EXECUTED AND DELIVERED, AND CAUSED TO BE RECORDED IN THE APPROPRIATE
VESSEL REGISTRY A VESSEL MORTGAGE, SUBSTANTIALLY IN THE FORM OF EXHIBIT I-1 OR
I-2, AS APPLICABLE TO THE ACCEPTABLE FLAG JURISDICTION, WITH RESPECT TO THE
MORTGAGED VESSEL BEING TRANSFERRED (THE “TRANSFERRED VESSEL”) AND THE VESSEL
MORTGAGE SHALL BE EFFECTIVE TO CREATE IN FAVOR OF THE COLLATERAL AGENT AND/OR
THE LENDERS A LEGAL, VALID AND ENFORCEABLE FIRST PRIORITY SECURITY INTEREST, IN
AND LIEN UPON SUCH TRANSFERRED VESSEL, SUBJECT ONLY TO PERMITTED LIENS.  ALL
FILINGS, DELIVERIES OF INSTRUMENTS AND OTHER ACTIONS NECESSARY OR DESIRABLE IN
THE REASONABLE OPINION OF THE COLLATERAL AGENT TO PERFECT AND PRESERVE SUCH
SECURITY INTERESTS SHALL HAVE BEEN DULY EFFECTED AND THE COLLATERAL AGENT SHALL
HAVE RECEIVED EVIDENCE THEREOF IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COLLATERAL AGENT.

 

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(II)           ON EACH FLAG JURISDICTION TRANSFER DATE, THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED FROM (A) CONSTANTINE P. GEORGIOPOULOS, SPECIAL NEW YORK
MARITIME COUNSEL TO THE BORROWER AND EACH CREDIT PARTY (OR OTHER COUNSEL TO THE
BORROWER AND SUCH CREDIT PARTIES REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT), AN OPINION ADDRESSED TO THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS
AND DATED SUCH FLAG JURISDICTION TRANSFER DATE, WHICH SHALL (X) BE IN FORM AND
SUBSTANCE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND (Y) COVER THE
RECORDATION OF THE SECURITY INTERESTS GRANTED PURSUANT TO THE VESSEL MORTGAGE(S)
TO BE DELIVERED ON SUCH DATE AND SUCH OTHER MATTERS INCIDENT THERETO AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST AND (B) LOCAL COUNSEL TO THE CREDIT
PARTIES CONSUMMATING THE RELEVANT FLAG JURISDICTION TRANSFER REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT PRACTICING IN THOSE JURISDICTIONS IN
WHICH THE TRANSFERRED VESSEL IS REGISTERED AND/OR THE CREDIT PARTY OWNING SUCH
TRANSFERRED VESSEL IS ORGANIZED, WHICH OPINIONS SHALL BE ADDRESSED TO THE
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS AND DATED SUCH FLAG JURISDICTION
TRANSFER DATE, WHICH SHALL (X) BE IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO
THE ADMINISTRATIVE AGENT AND (Y) COVER THE PERFECTION OF THE SECURITY INTERESTS
GRANTED PURSUANT TO THE VESSEL MORTGAGE(S) AND SUCH OTHER MATTERS INCIDENT
THERETO AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

(III)          ON EACH FLAG JURISDICTION TRANSFER DATE:

 

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

 

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

 

(IV)          ON OR PRIOR TO EACH FLAG JURISDICTION TRANSFER DATE, THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE, DATED THE FLAG
JURISDICTION TRANSFER DATE, SIGNED BY THE CHAIRMAN OF THE BOARD, THE PRESIDENT,
ANY VICE PRESIDENT, THE TREASURER OR AN AUTHORIZED MANAGER, MEMBER OR GENERAL
PARTNER OF THE CREDIT PARTY COMMENCING SUCH FLAG JURISDICTION TRANSFER,
CERTIFYING THAT (A) ALL NECESSARY GOVERNMENTAL (DOMESTIC AND FOREIGN) AND THIRD
PARTY APPROVALS AND/OR CONSENTS IN CONNECTION WITH THE FLAG

 

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JURISDICTION TRANSFER BEING CONSUMMATED ON SUCH DATE AND OTHERWISE REFERRED TO
HEREIN SHALL HAVE BEEN OBTAINED AND REMAIN IN EFFECT, (B) THERE EXISTS NO
JUDGMENT, ORDER, INJUNCTION OR OTHER RESTRAINT PROHIBITING OR IMPOSING
MATERIALLY ADVERSE CONDITIONS UPON SUCH FLAG JURISDICTION TRANSFER OR THE OTHER
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND (C) COPIES OF RESOLUTIONS
APPROVING THE FLAG JURISDICTION TRANSFER OF SUCH CREDIT PARTY AND ANY OTHER
MATTERS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

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

 

“Fleet Maintenance Reserve” shall mean for a fiscal quarter one quarter of the
Annual Fleet Maintenance Reserve Amount for the fiscal year in which such fiscal
quarter occurs.

 

“Fleet Renewal Reserve” shall mean for a fiscal quarter one quarter of the
Annual Fleet Reserve Amount for the fiscal year in which such fiscal quarter
occurs.

 

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

 

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

 

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

 

“Indebtedness” shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect of such
letters of credit, (iii) all Indebtedness of the types described in clause (i),
(ii), (iv), (v), (vi), (vii) or (viii) of this definition secured by any Lien on
any property owned by such Person, whether or not such Indebtedness has been
assumed by such Person (to the extent of the value of the respective property),
(iv) the aggregate amount required to be capitalized under leases under which
such Person is the lessee, (v) all obligations of such person to pay a specified

 

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purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person, (vii) all obligations under any Interest Rate Protection Agreement
or Other Hedging Agreement or under any similar type of agreement; provided that
Indebtedness shall in any event not include trade payables and expenses accrued
in the ordinary course of business and (viii) the maximum amount available to be
drawn under all Letters of Credit issued for the account of such Person and all
Unpaid Drawings in respect of such Letters of Credit.

 

“Initial Borrowing Date” shall mean the date occurring on or after the Effective
Date on which the initial Borrowing of Loans hereunder occurs.

 

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

 

“Interest Period” shall have the meaning provided in Section 1.08.

 

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

 

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

 

“Issuing Lender” shall mean the Administrative Agent and any Lender (which, for
purposes of this definition, also shall include any banking affiliate of any
Lender which has agreed to issue Letters of Credit under this Agreement) which
at the request of the Borrower and with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld) agrees, in such Lender’s sole
discretion, to become an Issuing Lender for the purpose of issuing Letters of
Credit pursuant to Section 2.01.

 

“Joint Lead Arrangers” shall mean Nordea Bank Finland plc, New York Branch, HSH
Nordbank AG and DnB NOR Bank ASA, New York Branch in their capacity as joint
lead arranger and joint bookrunners in respect of the credit facility provided
for herein.

 

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

 

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

 

“Lender Default” shall mean (i) the refusal (which has not been retracted) or
other failure (which has not been cured) of a Lender to make available its
portion of any Borrowing required to be made in accordance with the terms of
this Agreement as then in effect or (ii) a Lender having notified in writing the
Borrower and/or the Administrative Agent that it does not intend to comply with
its obligations under Sections 1.01 or 2.03.

 

“Letter of Credit” shall have the meaning provided in Section 2.01(a).

 

“Letter of Credit Fee” shall have the meaning provided in Section 3.01(c).

 

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“Letter of Credit Outstandings” shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the amount
of all Unpaid Drawings.

 

“Letter of Credit Request” shall have the meaning provided in Section 2.02(a).

 

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

 

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

 

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

 

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

 

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

 

“Material Adverse Effect” shall mean a material adverse effect on the business,
property, assets, liabilities, condition (financial or otherwise) or prospects
(x) of the Mortgaged Vessels taken as a whole or (y) the Borrower and the
Subsidiary Guarantors taken as a whole.

 

“Maturity Date” shall mean the seventh anniversary of the Effective Date.

 

“Minimum Borrowing Amount” shall mean, $1,000,000 .

 

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

 

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

 

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

 

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

 

“Negative Permitted Dividend Carry Forward Amount” shall mean for a fiscal
quarter, the aggregate Permitted Dividend Amounts for each fiscal quarter
commencing on or after January 1, 2005 and ended prior to such fiscal quarter.

 

“Net Cash Proceeds” shall mean, with respect to any Collateral Disposition or
sale of a Vessel to be Sold, as the case may be, the aggregate cash payments
(including any cash received by way of deferred payment pursuant to a note
receivable issued in connection with such Collateral Disposition or equity
issuance, other than the portion of such deferred payment

 

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constituting interest, but only as and when received) received by the Borrower
from such Collateral Disposition or equity issuance, net of (i) reasonable
transaction costs (including, without limitation, reasonable attorney’s fees)
and sales commissions and (ii) the estimated marginal increase in income taxes
and any stamp tax payable by the Borrower or any of its Subsidiaries as a result
of such Collateral Disposition.

 

“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital
in excess of par or stated value of shares of its capital stock, retained
earnings and any other account which, in accordance with GAAP, constitutes
stockholders’ equity, but excluding any treasury stock.

 

“Non-Collateral Vessels” shall mean the Vessels listed on Schedule XIII hereto.

 

“Non-Defaulting Lender” shall mean and include each Lender other than a
Defaulting Lender.

 

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

 

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

 

“Notice Office” shall mean the office of the Administrative Agent located at 437
Madison Avenue, 21st Floor, New York, NY 10022, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.

 

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

 

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

 

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

 

“Participant” shall have the meaning provided in Section 2.03(a).

 

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

 

“Payment Date” shall mean the last Business Day of each March, June,
September and December, commencing with December, 2005.

 

“Payment Office” shall mean the office of the Administrative Agent located at
437 Madison Avenue, 21st Floor, New York, NY 10022, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.

 

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

 

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“Percentage” of any Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Commitment of such Lender at such time
and the denominator of which is the Total Commitment at such time, provided that
if the Percentage of any Lender is to be determined after the Total Commitment
has been terminated, then the Percentages of the Lenders shall be determined
immediately prior (and without giving effect) to such termination.

 

“Permitted Dividend Amount” shall mean, for each fiscal quarter of the Borrower,
the sum of (x) Specified EBITDA for such fiscal quarter and (y) the lesser of
zero or the Negative Permitted Dividend Carry Forward Amount for such fiscal
quarter, minus the sum of the (a) the Fleet Maintenance Reserve for such fiscal
quarter, (b) the Fleet Renewal Reserve for such fiscal quarter, (c) net interest
expenses for such fiscal quarter and (d) cash taxes for such fiscal quarter.

 

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

 

“Permitted Holders” shall mean (i) Peter Georgiopoulos and any corporation or
other entity directly controlled by Peter Georgiopoulos and (ii) Oaktree Capital
Management, LLC and any corporation or other entity directly controlled by
Oaktree Capital Management, LLC.

 

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

 

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

 

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

 

“Pledge Agreement” shall have the meaning provided in Section 5.07.

 

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

 

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

 

“Prime Rate” shall mean the rate which the Administrative Agent announces from
time to time as its prime lending rate, the Prime Rate to change when and as
such prime lending

 

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rate changes.  The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

 

“Qualified Preferred Stock” shall mean any preferred stock so long as the terms
of any such preferred stock (i) do not contain any mandatory put, redemption,
repayment, sinking fund or other similar provision occurring prior to one year
after the Maturity Date, (ii) do not require the cash payment of dividends,
(iii) do not contain any covenants other than periodic reporting requirements,
(iv) do not grant the holder thereof any voting rights except for voting rights
on fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of the issuer thereof, or liquidations involving
the issuer thereof and other voting rights which holders of common stock may
have and (v) any other preferred stock that satisfies (i) and (iii) of this
definition of Qualified Preferred Stock and that is otherwise issuable or may be
distributed pursuant to a shareholders’ rights plan of the Borrower; provided
however, any Dividend or similar feature of such Qualified Preferred Stock shall
only be declared and paid in accordance with Section 9.03 of this Agreement.

 

“Quarterly Pricing Certificate” shall have the meaning provided in the
definition of Applicable Margin.

 

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

 

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

 

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

 

“Refund Guaranty” shall mean (i) Letter of Guarantee No. G-001-9847747 between
GMR Newbuilding 1, LLC, Universal Shipbuilding Corporation and The Bank of
Tokyo-Mitsubishi, Ltd. Dated July 5, 2004, (ii) Letter of Guarantee
No. G-001-9847763 between GMR Newbuilding 1, LLC, Universal Shipbuilding
Corporation and The Bank of Tokyo-Mitsubishi, Ltd. Dated July 7, 2004,
(iii) Letter of Guarantee No. G-001-9850182 between GMR Newbuilding 1, LLC,
Universal Shipbuilding Corporation and The Bank of Tokyo-Mitsubishi, Ltd. Dated
April 13, 2005, (iv) Letter of Guarantee No. G-001-9851537 between GMR
Newbuilding 1, LLC, Universal Shipbuilding Corporation and The Bank of
Tokyo-Mitsubishi, Ltd. Dated September 14, 2005, (v) Letter of Guarantee
No. G-001-9847748 between GMR Newbuilding 2, LLC, Universal Shipbuilding
Corporation and The Bank of Tokyo-Mitsubishi, Ltd. Dated July 5, 2004,
(vi) Letter of Guarantee No. G-001-9847764 between GMR Newbuilding 2, LLC,
Universal Shipbuilding Corporation and The Bank of Tokyo-Mitsubishi, Ltd. Dated
July 7, 2004, (vii) Letter of Guarantee No. GOE11200012261 between GMR
Newbuilding 3, LLC, Universal Shipbuilding Corporation and Mizuho Corporate
Bank, Ltd. Dated July 5, 2004, (viii) Letter of Guarantee No. GOE11200012377
between GMR Newbuilding 3, LLC, Universal Shipbuilding Corporation and Mizuho
Corporate Bank, Ltd. Dated July 7, 2004, (ix) Letter of Guarantee
No. GOE112000112274 between GMR Newbuilding 4, LLC, Universal Shipbuilding
Corporation and Mizuho Corporate Bank, Ltd. Dated July 5, 2004 and (x) Letter of
Guarantee No. GOE11200012381 between GMR

 

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Newbuilding 4, LLC, Universal Shipbuilding Corporation and Mizuho Corporate
Bank, Ltd. Dated July 7, 2004.

 

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

 

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

 

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

 

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

 

“Replaced Lender” shall have the meaning provided in Section 1.12.

 

“Replacement Lender” shall have the meaning provided in Section 1.12.

 

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

 

“Required Lenders” shall mean Lenders, the sum of whose outstanding Commitments
at such time represent an amount greater than 50% of the Total Commitment (or if
determined after termination of the Total Commitments, the principal amount of
outstanding Loans and the Percentage of Letter of Credit Outstandings) at such
time; provided that (i) in the event that Lenders which are Joint Lead Arrangers
have aggregate Commitments of greater than 40% of the Total Commitment, Required
Lenders shall mean Lenders, the sum of whose outstanding Commitments at such
time represent an amount greater than 66-2/3% of the Total Commitment (or if
determined after termination of the Total Commitments, the principal amount of
outstanding Loans and the Percentage of Letter of Credit Outstandings) at such
time and (ii) to the extent that the Joint Lead Arrangers and their controlled
Affiliates are the only Lenders with a Commitment, Required Lenders shall mean
each Joint Lead Arranger. 

 

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

 

“S&P” shall mean Standard & Poor’s Rating Services, a division of the
McGraw-Hill Companies, Inc., and its successors.

 

“Scheduled Commitment Reduction” shall have the meaning provided in
Section 4.02(b).

 

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“Scheduled Commitment Reduction Date” shall have the meaning provided in
Section 4.02(b).

 

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

 

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

 

“Security Documents” shall mean each Pledge Agreement, each Assignment of
Earnings, each Assignment of Insurances, each Assignment of Construction
Contract, each Assignment of Refund Guaranty, each Vessel Mortgage and, after
the execution and delivery thereof, each additional security document executed
pursuant to Section 8.11.

 

“Senior Note Documents” shall mean (i) the Senior Note Indenture and (ii) any
related documentation (including, without limitation, (x) the Senior Note
Guaranty, (y) a related securities purchase agreement, and (z) any and all other
related agreements, certificates and instruments to be executed in respect to
the Senior Notes).

 

“Senior Note Guaranty” shall mean a guaranty of the Senior Notes by certain
Subsidiaries of the Borrower from time to time, pursuant to, and in accordance
with the terms of, the Senior Note Indenture.

 

“Senior Note Indenture” shall mean the Indenture, dated as of March 20, 2003,
among the Borrower, the Subsidiary Guarantors (as defined therein) and LaSalle
Bank National Association as trustee.

 

“Senior Notes” shall mean the $250,000,000, 10% senior unsecured notes due 2013
issued by the Borrower pursuant to the Senior Note Indenture.

 

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

 

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

 

“Shareholder Payment” shall mean, with respect to any Person, Dividends and
Stock Buy-Backs with respect to such Person.

 

“Significant Default” shall mean any Event of Default pursuant to Section 10.03
with respect to any failure to comply with Sections 9.07, 9.08, 9.09 or 9.10 or
any Default or Event of Default pursuant to Section 10.01 or 10.05.

 

“Specified EBITDA” shall mean, for any period, Consolidated Net Income plus
Consolidated Net Interest Expense for such period and the amount of all
depreciation and amortization deducted in determining Consolidated Net Income
for such period.

 

“Start Date” shall have the meaning provided in the definition of Applicable
Margin.

 

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“Stated Amount” of each Letter of Credit shall, at any time, mean the maximum
amount available to be drawn thereunder (in each case determined without regard
to whether any conditions to drawing could then be met).

 

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

 

“Subsidiaries Guaranty” shall have the meaning provided Section 5.06.

 

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

 

“Subsidiary Guarantor” shall mean each direct and indirect Subsidiary of the
Borrower which (x) owns a Mortgaged Vessel, is party to a Construction Contract
or which owns, directly or indirectly, any of the capital stock of any such
direct or indirect Subsidiary or (y) guarantees the Senior Notes (for so long as
such Subsidiary’s guarantee of the Senior Notes is effective).

 

“Tax Sharing Agreement” shall have the meaning provided in Section 5.05.

 

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

 

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

 

“Total Available Commitment” shall mean, at any time, the Total Commitment less
(x) the Blocked Commitment and (y) the Additional Blocked Commitment.

 

“Total Available Unutilized Commitment” shall mean, at any time, the Total
Unutilized Commitment less (x) the Blocked Commitment and (y) the Additional
Blocked Commitment.

 

“Total Commitment” shall mean, at any time, the sum of the Commitments of the
Lenders at such time.

 

“Total Unutilized Commitment” shall mean, at any time, the sum of the Unutilized
Commitments of the Lenders at such time.

 

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

 

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

 

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

 

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

 

“Unpaid Drawing” shall have the meaning provided in Section 2.04(a).

 

“Unutilized Commitment” shall mean, with respect to any Lender, at any time, an
amount equal to such Lender’s Commitment at such time, less the aggregate
principal amount of Loans made by such Lender then outstanding plus the
Percentage of such Lender’s Letter of Credit Outstandings.

 

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

 

“Vessel Delivery Date” shall mean the date on which each such Vessel is
delivered in accordance with a Construction Contract and all of the requirements
set forth in Section 8.15 with respect to such Vessel have been complied with to
the satisfaction of the Administrative Agent.

 

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

 

(I)            ON THE VESSEL EXCHANGE DATE, IF THE SUBSIDIARY OWNING THE
ACCEPTABLE REPLACEMENT VESSEL IS NOT A CREDIT PARTY, (A) SUCH SUBSIDIARY SHALL
(1) GRANT TO THE COLLATERAL AGENT A FIRST PRIORITY LIEN (SUBJECT ONLY TO
PERMITTED LIENS) ON ALL PROPERTY OF SUCH SUBSIDIARY BY EXECUTING AND DELIVERING
A COUNTERPART OF THE PLEDGE AGREEMENT, TAKING ALL ACTIONS REQUIRED PURSUANT TO
SECTION 25 OF THE PLEDGE AGREEMENT TO BECOME A PLEDGOR THEREUNDER, AND TAKING
ANY OTHER ACTION REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT AND
(2) EXECUTE AND DELIVER A COUNTERPART OF THE SUBSIDIARIES GUARANTY AND (B) THE
BORROWER SHALL PLEDGE AND DELIVER, OR CAUSE TO BE PLEDGED AND DELIVERED, ALL OF
THE CAPITAL STOCK OF SUCH SUBSIDIARY OWNED BY ANY CREDIT PARTY TO THE COLLATERAL
AGENT.

 

(II)           ON THE APPLICABLE VESSEL EXCHANGE DATE, THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED FROM (A) CONSTANTINE P. GEORGIOPOULOS, SPECIAL NEW YORK
MARITIME COUNSEL TO THE BORROWER AND EACH CREDIT PARTY (OR OTHER COUNSEL TO THE
BORROWER AND SUCH

 

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CREDIT PARTIES REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT), AN OPINION
ADDRESSED TO THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS AND DATED SUCH
VESSEL EXCHANGE DATE, WHICH SHALL (X) BE IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND (Y) COVER THE RECORDATION OF THE
SECURITY INTERESTS GRANTED PURSUANT TO THE VESSEL MORTGAGE(S) TO BE DELIVERED ON
SUCH DATE AND SUCH OTHER MATTERS INCIDENT THERETO AS THE ADMINISTRATIVE AGENT
MAY REASONABLY REQUEST AND (B) LOCAL COUNSEL TO THE CREDIT PARTIES CONSUMMATING
THE RELEVANT VESSEL EXCHANGE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT
PRACTICING IN THOSE JURISDICTIONS IN WHICH THE ACCEPTABLE REPLACEMENT VESSEL IS
REGISTERED AND/OR THE CREDIT PARTY OWNING SUCH ACCEPTABLE REPLACEMENT VESSEL IS
ORGANIZED, WHICH OPINIONS SHALL BE ADDRESSED TO THE ADMINISTRATIVE AGENT AND
EACH OF THE LENDERS AND DATED SUCH VESSEL EXCHANGE DATE, WHICH SHALL (X) BE IN
FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND (Y)
COVER THE PERFECTION OF THE SECURITY INTERESTS GRANTED PURSUANT TO THE VESSEL
MORTGAGE(S) AND SUCH OTHER MATTERS INCIDENT THERETO AS THE ADMINISTRATIVE AGENT
MAY REASONABLY REQUEST.

 

(III)          ON THE VESSEL EXCHANGE DATE, THE CREDIT PARTY WHICH IS
CONSUMMATING A VESSEL EXCHANGE ON SUCH DATE SHALL HAVE DULY AUTHORIZED, EXECUTED
AND DELIVERED AN ASSIGNMENT OF EARNINGS IN THE FORM OF EXHIBIT G AND A
ASSIGNMENT OF INSURANCES IN THE FORM OF EXHIBIT H, TOGETHER COVERING ALL OF SUCH
CREDIT PARTY’S PRESENT AND FUTURE EARNINGS AND INSURANCE COLLATERAL, IN EACH
CASE TOGETHER WITH:

 

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

 

(B)           certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party as debtor and that are filed in the jurisdictions
referred to in clause (A) above, together with copies of such other financing
statements (none of which shall cover the Collateral except to the extent
evidencing Permitted Liens unless in respect of which the Collateral Agent shall
have received Form UCC-3 Termination Statements (or such other termination
statements as shall be required by local law) fully executed for filing if
required by applicable laws); and

 

(C)           evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Assignment of Earnings and the
Assignment of Insurances have been taken.

 

(IV)          ON EACH VESSEL EXCHANGE DATE:

 

(A)          The Credit Party which is consummating a Vessel Exchange on such
date shall have duly authorized, executed and delivered, and caused to be

 

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recorded in the appropriate vessel registry a Vessel Mortgage, substantially in
the form of Exhibit I-1 or I-2, as applicable, with respect to each of such
Acceptable Replacement Vessel and the Vessel Mortgages shall be effective to
create in favor of the Collateral Agent and/or the Lenders a legal, valid and
enforceable first priority security interest, in and lien upon such Replacement
Vessels, subject only to Permitted Liens.  Except as specifically provided
above, all filings, deliveries of instruments and other actions necessary or
desirable in the reasonable opinion of the Collateral Agent to perfect and
preserve such security interests shall have been duly effected and the
Collateral Agent shall have received evidence thereof in form and substance
reasonably satisfactory to the Collateral Agent.

 

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

 

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

 

(D)          The Administrative Agent shall have received appraisal reports of
recent date in scope, form and substance, and from independent appraisers,
reasonably satisfactory to the Administrative Agent, stating the then current
fair market value of the Acceptable Replacement Vessel acquired on such date,
the results of which shall be reasonably satisfactory to the Administrative
Agent.

 

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

 

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(V)           ON OR PRIOR TO EACH VESSEL EXCHANGE DATE:

 

(A)          THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE, DATED
THE VESSEL EXCHANGE DATE, SIGNED BY A SENIOR FINANCIAL OFFICER OF THE BORROWER
WHICH CERTIFICATE SHALL SET FORTH THE CALCULATIONS REQUIRED TO ESTABLISH WHETHER
THE BORROWER IS IN COMPLIANCE WITH THE PROVISIONS OF SECTION 9.10.

 

(B)           The Administrative Agent shall have received a certificate, dated
the Vessel Exchange Date, signed by the Chairman of the Board, the President,
any Vice President, the Treasurer or an authorized manager, member or general
partner of the Credit Party commencing such Vessel Exchange, certifying that
(1) all necessary governmental (domestic and foreign) and third party approvals
and/or consents (including any necessary anti-trust approvals or consents) in
connection with the Vessel Exchange being consummated on such date and otherwise
referred to herein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which, in the reasonable judgment of the Administrative
Agent, restrains, prevents or imposes materially adverse conditions upon the
consummation of such Vessel Exchange or the transactions contemplated by this
Agreement and (2) there exists no judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon such Vessel Exchange
or the other transactions contemplated by this Agreement.

 

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

 

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

 

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

 

SECTION 12.  Agency and Security Trustee Provisions.

 

12.01  Appointment.  (a) The Lenders hereby designate Nordea Bank Finland plc,
New York Branch, as Administrative Agent (for purposes of this Section 12, the
term “Administrative Agent” shall include Nordea Bank Finland plc, New York
Branch (and/or any of its affiliates) in its capacity as Collateral Agent
pursuant to the Security Documents and in its capacity as security trustee
pursuant to the Vessel Mortgages) to act as specified herein and in the other
Credit Documents.  Each Lender hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agents to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agents by the terms hereof and thereof and such other powers as
are reasonably incidental thereto.  The Agents may perform any of its duties
hereunder by or through its respective

 

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officers, directors, agents, employees or affiliates and, may assign from time
to time any or all of its rights, duties and obligations hereunder and under the
Security Documents to any of its banking affiliates.

 

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

 

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

 

12.03  Lack of Reliance on the Agents.  Independently and without reliance upon
the Agents, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Borrower and its Subsidiaries and,
except as expressly provided in this Agreement, none of the Agents shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.  None of the Agents
shall be responsible to any Lender or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,

 

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collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Borrower and its Subsidiaries or the
existence or possible existence of any Default or Event of Default.

 

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

 

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

 

12.06  Indemnification.  To the extent any of the Agents is not reimbursed and
indemnified by the Borrower, the Lenders will reimburse and indemnify the
applicable Agents, in proportion to their respective “percentages” as used in
determining the Required Lenders (without regard to the existence of any
Defaulting Lenders), for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agents in performing their respective duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document; provided that no Lender
shall be liable in respect to an Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross negligence or
willful misconduct.

 

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

 

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12.08  Holders.  The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent.  Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.

 

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

 

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

 

(c)           If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower (which shall not be unreasonably withheld or delayed),
shall then appoint a commercial bank or trust company with capital and surplus
of not less than $500,000,000 as successor Administrative Agent who shall serve
as Administrative Agent hereunder or thereunder until such time, if any, as the
Lenders appoint a successor Administrative Agent as provided above.

 

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

 

12.10  The Joint Lead Arrangers.  Notwithstanding any other provision of this
Agreement or any provision of any other Credit Document, each of the Joint Lead
Arrangers are named as such for recognition purposes only, and in their
respective capacities as such shall have no powers, duties, responsibilities or
liabilities with respect to this Agreement or the other Credit Documents or the
transactions contemplated hereby and thereby; it being understood and agreed
that the Joint Lead Arrangers shall be entitled to all indemnification and
reimbursement rights in favor of any of the Agents as provided for under
Sections 12.06 and 13.01.  Without limitation of the foregoing, none of the
Joint Lead Arrangers shall, solely by reason of this Agreement or any other
Credit Documents, have any fiduciary relationship in respect of any Lender or
any other Person.

 

SECTION 13.  Miscellaneous.

 

13.01  Payment of Expenses, etc.  The Borrower agrees that it
shall:  (i) whether or not the transactions herein contemplated are consummated,
pay all reasonable out-of-pocket

 

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costs and expenses of each of the Agents (including, without limitation, the
reasonable fees and disbursements of White & Case LLP, Watson, Farley &
Williams, other counsel to the Administrative Agent and the Lead Arrangers and
local counsel) in connection with the preparation, execution and delivery of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of the Agents in connection with their respective syndication
efforts with respect to this Agreement and of the Agents and each of the Lenders
in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of counsel
(including in-house counsel) for each of the Agents and for each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp, documentary, transfer, sales and use, value
added,  excise and other similar taxes with respect to the foregoing matters and
save each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify the Agents,
the Collateral Agent and each Lender, and each of their respective officers,
directors, trustees, employees, representatives and agents from and hold each of
them harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys’ and
consultants’ fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
any of the Agents, the Collateral Agent or any Lender is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein, or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (b) the actual or alleged presence of Hazardous Materials
on any Vessel or in the air, surface water or groundwater or on the surface or
subsurface of any property at any time owned or operated by the Borrower or any
of its Subsidiaries, the generation, storage, transportation, handling, disposal
or Environmental Release of Hazardous Materials at any location, whether or not
owned or operated by the Borrower or any of its Subsidiaries, the non-compliance
of any Vessel or property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Vessel or property, or any Environmental Claim asserted against the
Borrower, any of its Subsidiaries or any Vessel or property at any time owned or
operated by the Borrower or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages,
penalties, actions, judgments, suits, costs, disbursements or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified).  To the extent that the undertaking to indemnify, pay
or hold harmless each of the Agents or any Lender set forth in the preceding
sentence may be unenforceable because it violates any law or public policy, the
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.

 

13.02  Right of Setoff.  In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence

 

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

 

13.03  Notices.  Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including
telexed, telegraphic or telecopier communication) and mailed, telexed,
telecopied or delivered:  if to the Borrower, at the Borrower’s address
specified under its signature below; if to any Lender, at its address specified
opposite its name on Schedule II below; and if to the Administrative Agent, at
its Notice Office; or, as to any other Credit Party, at such other address as
shall be designated by such party in a written notice to the other parties
hereto and, as to each Lender, at such other address as shall be designated by
such Lender in a written notice to the Borrower and the Administrative Agent. 
All such notices and communications shall, (i) when mailed, be effective three
Business Days after being deposited in the mails, prepaid and properly addressed
for delivery, (ii) when sent by overnight courier, be effective one Business Day
after delivery to the overnight courier prepaid and properly addressed for
delivery on such next Business Day, or (iii) when sent by telex or telecopier,
be effective when sent by telex or telecopier, except that notices and
communications to the Administrative Agent shall not be effective until received
by the Administrative Agent.

 

13.04  Benefit of Agreement.  (a)  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that (i) no Credit Party may
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of the Lenders,
(ii) although any Lender may transfer, assign or grant participations in its
rights hereunder, such Lender shall remain a “Lender” for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments hereunder
except as provided in Section 13.04(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a “Lender” hereunder and
(iii) no Lender shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (x) extend the final scheduled maturity of any Loan or Note in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Commitment Commission thereon (except (m) in
connection with a waiver of applicability of any post-default increase in
interest rates and (n) that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in the rate of
interest for purposes of this clause (x)) or reduce the principal

 

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amount thereof, or increase the amount of the participant’s participation over
the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitments
shall not constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant’s participation is not increased as a result
thereof), (y) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (z) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) securing the Loans hereunder in
which such participant is participating.  In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant’s rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.

 

(b)           Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitment (and related outstanding Obligations hereunder), to its (i) parent
company and/or any affiliate of such Lender which is at least 50% owned by such
Lender or its parent company or (ii) in the case of any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
managed or advised by the same investment advisor of such Lender or by an
Affiliate of such investment advisor or (iii) to one or more Lenders or (y)
assign with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed) all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender or assigning Lenders, of
such Commitments, hereunder to one or more Eligible Transferees (treating any
fund that invests in bank loans and any other fund that invests in bank loans
and is managed or advised by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment and Assumption Agreement, provided that (i) at such time
Schedule I shall be deemed modified to reflect the Commitments of such new
Lender and of the existing Lenders, (ii) new Notes will be issued, at the
Borrower’s expense, to such new Lender and to the assigning Lender upon the
request of such new Lender or assigning Lender, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments,
(iii) the consent of the Administrative Agent shall be required in connection
with any assignment pursuant to preceding clause (y) (which consent shall not be
unreasonably withheld or delayed), and (iv) the Administrative Agent shall
receive at the time of each such assignment, from the assigning or assignee
Lender, the payment of a non-refundable assignment fee of $3,000.  To the extent
of any assignment pursuant to this Section 13.04(b), the assigning Lender shall
be relieved of its obligations hereunder with respect to its assigned
Commitments (it being understood that the indemnification provisions under this
Agreement (including, without limitation, Sections 1.09, 1.10, 2.05, 4.04, 13.01
and 13.06) shall survive as to such assigning Lender).  To the extent that an
assignment of all or any portion of a Lender’s Commitments and related
outstanding Obligations pursuant to Section 1.12 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 1.09,
1.10 or 4.04 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any other

 

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increased costs of the type described above resulting from changes after the
date of the respective assignment).

 

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

 

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

 

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

 

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

 

(c)           Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this

 

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Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders.

 

13.07  Calculations; Computations.  (a)  The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders).  In addition, all computations determining compliance with Sections
9.07 through 9.10, inclusive, shall utilize accounting principles and policies
in conformity with those used to prepare the historical financial statements
delivered to the Lenders for the first fiscal year of the Borrower ended
December 31, 2004 (with the foregoing generally accepted accounting principles,
subject to the preceding proviso, herein called “GAAP”).  Unless otherwise
noted, all references in this Agreement to “generally accepted accounting
principles” shall mean generally accepted accounting principles as in effect in
the United States.

 

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

 

13.08  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. 
(a)  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE VESSEL MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT
OF LAWS RULES (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE GENERAL OBLIGATIONS
LAW).  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE
30 DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.  IF AT ANY TIME DURING WHICH THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT REMAINS IN EFFECT, THE

 

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BORROWER DOES NOT MAINTAIN A REGULARLY FUNCTIONING OFFICE IN NEW YORK CITY, IT
WILL DULY APPOINT, AND AT ALL TIMES MAINTAIN, AN AGENT IN NEW YORK CITY FOR THE
SERVICE OF PROCESS OR SUMMONS, AND WILL PROVIDE TO THE ADMINISTRATIVE AGENT AND
THE LENDERS WRITTEN NOTICE OF THE IDENTITY AND ADDRESS OF SUCH AGENT FOR SERVICE
OF PROCESS OR SUMMONS; PROVIDED THAT ANY FAILURE ON THE PART OF THE BORROWER TO
COMPLY WITH THE FOREGOING PROVISIONS OF THIS SENTENCE SHALL NOT IN ANY WAY
PREJUDICE OR LIMIT THE SERVICE OF PROCESS OR SUMMONS IN ANY OTHER MANNER
DESCRIBED ABOVE IN THIS SECTION 13.08 OR OTHERWISE PERMITTED BY LAW.

 

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

 

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

 

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

 

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

 

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

 

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13.12  Amendment or Waiver; etc.  (a)  Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender) (with
Obligations being directly affected in the case of following clause (i)) and in
the case of the following clause (vi), to the extent (in the case of the
following clause (vi)) that any such Lender would be required to make a Loan in
excess of its pro rata portion provided for in this Agreement or would receive a
payment or prepayment of Loans or a commitment reduction that (in any case) is
less than its pro rata portion provided for in this Agreement, in each case, as
a result of any such amendment, modification or waiver referred to in the
following clause (vi)), (i) extend the final scheduled maturity of any Loan or
Note, extend the timing for or reduce the principal amount of any Scheduled
Commitment Reduction, or reduce the rate or extend the time of payment of
interest on any Loan or Note or Commitment Commission (except (x) in connection
with the waiver of applicability of any post-default increase in interest rates
and (y) any amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in the rate of interest for purposes
of this clause (i)), or reduce the principal amount thereof (except to the
extent repaid in cash), (ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security
Documents, (iii) amend, modify or waive any provision of this Section 13.12,
(iv) reduce the percentage specified in the definition of Required Lenders (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the
extensions of Loans and Commitments are included on the Effective Date),
(v) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement, (vi) amend, modify or waive Section 1.06
or amend, modify or waive any other provision in this Agreement to the extent
providing for payments or prepayments of Loans or reductions in Commitments, in
each case, to be applied pro rata among the Lenders entitled to such payments or
prepayments of Loans or reductions in Commitments (it being understood that the
provision of additional extensions of credit pursuant to this Agreement, or the
waiver of any mandatory commitment reduction or any mandatory prepayment of
Loans by the Required Lenders shall not constitute an amendment, modification or
waiver for purposes of this clause (vi)), or (vii) release any Subsidiary
Guarantor from a Subsidiaries Guaranty to the extent same owns a Mortgaged
Vessel (other than as provided in the Subsidiaries Guaranty); provided, further,
that no such change, waiver, discharge or termination shall (t) increase the
Commitments of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Commitments shall not constitute an increase of the Commitment
of any Lender, and that an increase in the available portion of any Commitment
of any Lender shall not constitute an increase in the Commitment of such
Lender), (u) without the consent of each Issuing Lender, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (v) without the consent of each Agent, amend, modify or waive
any provision of Section 12 as same applies to such Agent or any other provision
as same relates to the rights or obligations of such Agent or (w) without the
consent of the Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent. 

 

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(b)           If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Sections 13.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders (or,
at the option of the Borrower if the respective Lender’s consent is required
with respect to less than all Loans (or related Commitments), to replace only
the respective Commitments and/or Loans of the respective non-consenting Lender
which gave rise to the need to obtain such Lender’s individual consent) with one
or more Replacement Lenders pursuant to Section 1.12 so long as at the time of
such replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Lender’s
Commitment (if such Lender’s consent is required as a result of its Commitment),
and/or repay outstanding Loans and terminate any outstanding Commitments of such
Lender which gave rise to the need to obtain such Lender’s consent, in
accordance with Sections 4.01(iv), provided that, unless the Commitments are
terminated, and Loans repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Commitments and/or outstanding Loans of existing Lenders (who in
each case must specifically consent thereto), then in the case of any action
pursuant to preceding clause (B) the Required Lenders (determined before giving
effect to the proposed action) shall specifically consent thereto, provided,
further, that in any event the Borrower shall not have the right to replace a
Lender, terminate its Commitment or repay its Loans solely as a result of the
exercise of such Lender’s rights (and the withholding of any required consent by
such Lender) pursuant to the second proviso to Section 13.12(a).

 

13.13  Survival.  All indemnities set forth herein including, without
limitation, in Sections 1.09, 1.10, 2.05, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.

 

13.14  Domicile of Loans.  Each Lender may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Lender. 
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.09, 1.10, 2.05 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).

 

13.15  Limitation on Additional Amounts, etc.  Notwithstanding anything to the
contrary contained in Sections 1.09, 1.10, 2.05 or 4.04 of this Agreement,
unless a Lender gives notice to the Borrower that it is obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction

 

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in return on capital, then such Lender shall only be entitled to be compensated
for such amount by the Borrower pursuant to said Section 1.09, 1.10, 2.05 or
4.04, as the case may be, to the extent the costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital are incurred or suffered on or after the date which occurs one year
prior to such Lender giving notice to the Borrower that it is obligated to pay
the respective amounts pursuant to said Section 1.09, 1.10, 2.05 or 4.04, as the
case may be.  This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.09, 1.10, 2.05 and 4.04.

 

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

 

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

 

13.17  Register.  The Borrower hereby designates the Administrative Agent to
serve as the Borrower’s agent, solely for purposes of this Section 13.17, to
maintain a register (the “Register”) on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment and prepayment in respect of the principal amount of the
Loans of each Lender.  Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower’s obligations in respect of such
Loans.  With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain

 

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owing to the transferor.  The registration of assignment or transfer of all or
part of any Commitments and Loans shall be recorded by the Administrative Agent
on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b).  Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender.  The Borrower agrees to indemnify the Administrative Agent from
and against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.17, except
to the extent caused by the Administrative Agent’s own gross negligence or
willful misconduct.

 

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

 

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

 

13.20  Waiver of Immunity.  The Borrower, in respect of itself, each other
Credit Party, its and their process agents, and its and their properties and
revenues, hereby irrevocably agrees that, to the extent that the Borrower, any
other Credit Party or any of its or their properties has or may hereafter
acquire any right of immunity from any legal proceedings, whether in the

 

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United States, the Republic of the Marshall Islands, the Republic of Liberia,
the Republic of Malta or elsewhere, to enforce or collect upon the Obligations
of the Borrower or any other Credit Party related to or arising from the
transactions contemplated by any of the Credit Documents, including, without
limitation, immunity from service of process, immunity from jurisdiction or
judgment of any court or tribunal, immunity from execution of a judgment, and
immunity of any of its property from attachment prior to any entry of judgment,
or from attachment in aid of execution upon a judgment, the Borrower, for itself
and on behalf of the other Credit Parties, hereby expressly waives, to the
fullest extent permissible under applicable law, any such immunity, and agrees
not to assert any such right or claim in any such proceeding, whether in the
United States, the Republic of the Marshall Islands, the Republic of Liberia,
the Republic of Malta or elsewhere.

 

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

 

*     *     *

 

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

 

 

GENERAL MARITIME CORPORATION,
as Borrower

 

 

 

 

 

By:

 /s/ John C. Georgiopoulos

 

 

Title:

 

Address:

 

Telephone:

 

Facsimile:

 

 

 

 

 

With a copy to:

 

 

 

 

 

Kramer Levin Naftalis & Frankel LLP

 

919 Third Avenue

 

New York, NY 10022

 

Attention: Thomas E. Molner, Esq.

 

Telephone: (212) 715-9100

 

Facsimile: (212) 715-8000

 

 

 

 

 

NORDEA BANK FINLAND PLC, NEW YORK
BRANCH, as Administrative Agent

 

 

 

 

 

By:

 /s/ Hans Chr. Kjelsrud

 

 

Name: Hans Chr. Kjelsrud

 

Title:   Senior Vice President

 

 

 

By:

 /s/ Anne Engen

 

 

Name: Anne Engen

 

Title:   Vice President

 

 

 

DNB NOR BANK ASA, NEW YORK BRANCH,

 

Individually and as Joint Lead Arranger

 

 

 

By:

 /s/ Nikolai A. Nachamkin

 

 

Name: Nikolai A. Nachamkin

 

Title:   Senior Vice President

 

 

 

By:

 /s/ Tor Ivar Hansen

 

 

Name: Tor Ivar Hansen

 

Title:   Assistant Vice President

 

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HSH NORDBANK AG,

 

Individually and as Joint Lead Arranger

 

 

 

By:

 /s/ Uta Urbaniak

 

 

Title: Vice President

 

 

 

By:

 /s/ Thorston Lundius

 

 

Title: Vice President

 

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