exv10w11






Exhibit 10.11




 

 






CREDIT FACILITY PROVIDING FOR A

US$170,000,000

SENIOR SECURED CREDIT FACILITY




TO BE MADE AVAILABLE TO

RIGDON MARINE CORPORATION




BY

DVB BANK NV,

as Underwriter, Arranger, Agent, Security Trustee, Swap Bank and Book Manager,




and the Banks and Financial Institutions

identified on Schedule 1, as Lenders




 

 






as of December 28, 2005







 









 








CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	 
	 	 	 	 	 	 
	1. DEFINITIONS	 	 	1	 
	1.1
	 	Specific Definitions	 	 	1	 
	1.2
	 	Computation of Time Periods; Other Definitional Provisions	 	 	13	 
	1.3
	 	Accounting Terms	 	 	13	 
	1.4
	 	Certain Matters Regarding Materiality	 	 	14	 
	1.5
	 	Forms of Documents	 	 	14	 
	1.6
	 	General Conditions	 	 	14	 
	2. REPRESENTATIONS AND WARRANTIES	 	 	14	 
	2.1
	 	Representations and Warranties	 	 	14	 
	(a)
	 	Due Organization and Power	 	 	14	 
	(b)
	 	Authorization and Consents	 	 	14	 
	(c)
	 	Binding Obligations	 	 	14	 
	(d)
	 	No Violation	 	 	14	 
	(e)
	 	Litigation	 	 	15	 
	(f)
	 	No Default	 	 	15	 
	(g)
	 	Vessels	 	 	15	 
	(h)
	 	Insurance	 	 	15	 
	(i)
	 	Financial Information	 	 	15	 
	(j)
	 	Tax Returns	 	 	16	 
	(k)
	 	ERISA	 	 	16	 
	(l)
	 	Chief Executive Office	 	 	16	 
	(m)
	 	Foreign Trade Control Regulations	 	 	16	 
	(n)
	 	Environmental Matters and Claims	 	 	16	 
	(o)
	 	Compliance with ISM Code, ISPS Code and MTSA	 	 	17	 
	(p)
	 	No Threatened Withdrawal of DOC, ISSC or SMC	 	 	17	 
	(q)
	 	Liens	 	 	17	 
	(r)
	 	Funded Debt	 	 	17	 
	(s)
	 	Survival	 	 	17	 
	3.THE ADVANCES	 	 	17	 
	3.1
	 	Availability	 	 	17	 
	3.2
	 	Receipt of Funds	 	 	18	 
	3.3
	 	Drawdown Notice	 	 	18	 
	3.4
	 	Effect of Drawdown Notice	 	 	18	 
	3.5
	 	Notation of Advances	 	 	19	 
	4. CONDITIONS	 	 	19	 
	4.1
	 	Conditions Precedent to the Effectiveness of this Credit Facility Agreement	 	 	19	 
	(a)
	 	Corporate Authority	 	 	19	 
	(b)
	 	The Credit Facility Agreement, the Note Pledge	 	 	19	 
	(c)
	 	Environmental Claims	 	 	20	 
	(d)
	 	Fees	 	 	20	 
	(e)
	 	Account	 	 	20	 
	(f)
	 	Compliance Certificate	 	 	20	 
	(g)
	 	Building Contracts	 	 	20	 
	(h)
	 	Subordination Agreement	 	 	20	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	 
	 	 	 	 	 	 
	(i)
	 	Subordinated Mortgage	 	 	20	 
	(j)
	 	Legal Opinions	 	 	20	 
	4.2
	 	Further Conditions Precedent	 	 	20	 
	(a)
	 	Drawdown Notice	 	 	20	 
	(b)
	 	The Vessels	 	 	20	 
	(c)
	 	Vessel Documents	 	 	21	 
	(d)
	 	Representations and Warranties	 	 	21	 
	(e)
	 	No Event of Default	 	 	21	 
	(f)
	 	No Change in Laws	 	 	21	 
	(g)
	 	No Material Adverse Effect	 	 	21	 
	(h)
	 	Vessel Liens	 	 	21	 
	(i)
	 	Charters; Pooling Agreements	 	 	22	 
	(j)
	 	ISM DOC and ISSC	 	 	22	 
	(k)
	 	Legal Opinions	 	 	22	 
	4.3
	 	Breakfunding Costs	 	 	22	 
	4.4
	 	Satisfaction after Drawdown	 	 	22	 
	5. REPAYMENT AND PREPAYMENT	 	 	22	 
	5.1
	 	Repayment	 	 	22	 
	5.2
	 	Voluntary Prepayment; No Re-borrowing	 	 	23	 
	5.3
	 	Mandatory Prepayment; Sale or Loss of Vessel	 	 	23	 
	5.4
	 	Interest and Costs with Prepayments/Application of Prepayments	 	 	23	 
	6. INTEREST AND RATE	 	 	23	 
	6.1
	 	Applicable Rate	 	 	23	 
	6.2
	 	Default Rate	 	 	24	 
	6.3
	 	Interest Periods	 	 	24	 
	6.4
	 	Interest Payments	 	 	24	 
	7. PAYMENTS	 	 	24	 
	7.1
	 	Place of Payments, No Set Off	 	 	24	 
	7.2
	 	Tax Credits	 	 	25	 
	7.3
	 	Sharing of Setoffs	 	 	25	 
	7.4
	 	Computations; Banking Days	 	 	25	 
	8. EVENTS OF DEFAULT	 	 	26	 
	8.1
	 	Events of Default	 	 	26	 
	(a)
	 	Non-Payment of Principal	 	 	26	 
	(b)
	 	Non-Payment of Interest or Other Amounts	 	 	26	 
	(c)
	 	Representations	 	 	26	 
	(d)
	 	Mortgage	 	 	26	 
	(e)
	 	Covenants	 	 	26	 
	(f)
	 	Funded Debt	 	 	26	 
	(g)
	 	Bankruptcy	 	 	27	 
	(h)
	 	Termination of Operations; Sale of Assets	 	 	27	 
	(i)
	 	Judgments	 	 	27	 
	(j)
	 	Inability to Pay Debts	 	 	27	 
	(k)
	 	Change in Financial Position	 	 	27	 
	(l)
	 	Change in Control	 	 	27	 
	(m)
	 	Cross-Default	 	 	27	 
	(n)
	 	ERISA Debt	 	 	27	 
	8.2
	 	Indemnification	 	 	28	 






ii









 






	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	 
	 	 	 	 	 	 
	8.3
	 	Application of Moneys	 	 	28	 
	9. COVENANTS	 	 	28	 
	9.1
	 	Affirmative Covenants	 	 	28	 
	(a)
	 	Performance of Agreements	 	 	29	 
	(b)
	 	Notice of Default, etc	 	 	29	 
	(c)
	 	Obtain Consents	 	 	29	 
	(d)
	 	Financial Information	 	 	29	 
	(e)
	 	Vessel Valuations	 	 	30	 
	(f)
	 	Corporate Existence	 	 	30	 
	(g)
	 	Books and Records	 	 	30	 
	(h)
	 	Taxes and Assessments	 	 	30	 
	(i)
	 	Inspection	 	 	30	 
	(j)
	 	Inspection and Survey Reports	 	 	30	 
	(k)
	 	Compliance with Statutes, Agreements, etc	 	 	30	 
	(l)
	 	Environmental Matters	 	 	31	 
	(m)
	 	ERISA	 	 	31	 
	(n)
	 	Vessel Management	 	 	31	 
	(o)
	 	ISM Code, ISPS Code and MTSA Matters	 	 	31	 
	(p)
	 	Brokerage Commissions, etc	 	 	31	 
	(q)
	 	Deposit Accounts; Assignment	 	 	31	 
	(r)
	 	Insurance	 	 	31	 
	9.2
	 	Negative Covenants	 	 	32	 
	(a)
	 	Liens	 	 	32	 
	(b)
	 	Change in Business	 	 	32	 
	(c)
	 	Change in Flag, Class, Management or Ownership	 	 	32	 
	(d)
	 	Sale or Pledge of Shares	 	 	32	 
	(e)
	 	Sale of Assets	 	 	32	 
	(f)
	 	Changes in Offices or Names	 	 	33	 
	(g)
	 	Consolidation and Merger	 	 	33	 
	(h)
	 	Change Fiscal Year	 	 	33	 
	(i)
	 	Limitations on Ability to Make Distributions	 	 	33	 
	(j)
	 	Use of Corporate Funds	 	 	33	 
	(k)
	 	No Money Laundering	 	 	33	 
	(l)
	 	Restricted Payment/Restricted Investments	 	 	33	 
	9.3
	 	Financial Covenants	 	 	34	 
	(a)
	 	Consolidated Net Worth	 	 	34	 
	(b)
	 	Fixed Charge Coverage	 	 	34	 
	(c)
	 	Limitation on Funded Debt	 	 	34	 
	(d)
	 	Limitation on Subsidiary Debt	 	 	34	 
	9.4
	 	Asset Maintenance	 	 	34	 
	10. ASSIGNMENT	 	 	34	 
	11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC	 	 	35	 
	11.1
	 	Illegality	 	 	35	 
	11.2
	 	Increased Costs	 	 	35	 
	11.3
	 	Replacement of Lender or Participant	 	 	36	 
	11.4
	 	Nonavailability of Funds	 	 	37	 
	11.5
	 	Lender’s Certificate Conclusive	 	 	37	 
	11.6
	 	Compensation for Losses	 	 	37	 






iii









 






	 	 	 	 	 	 	 
	 	 	 	 	PAGE	 
	 
	 	 	 	 	 	 
	12. CURRENCY INDEMNITY	 	 	37	 
	12.1
	 	Currency Conversion	 	 	37	 
	12.2
	 	Change in Exchange Rate	 	 	38	 
	12.3
	 	Additional Debt Due	 	 	38	 
	12.4
	 	Rate of Exchange	 	 	38	 
	13. FEES AND EXPENSES	 	 	38	 
	13.1
	 	Fees	 	 	38	 
	13.2
	 	Expenses	 	 	38	 
	14. APPLICABLE LAW, JURISDICTION AND WAIVER	 	 	39	 
	14.1
	 	Applicable Law	 	 	39	 
	14.2
	 	Jurisdiction	 	 	39	 
	14.3
	 	WAIVER OF JURY TRIAL.	 	 	39	 
	15. THE AGENTS	 	 	39	 
	15.1
	 	Appointment of Agents	 	 	39	 
	15.2
	 	Security Trustee as Trustee	 	 	39	 
	15.3
	 	Distribution of Payments	 	 	40	 
	15.4
	 	Holder of Interest in Note	 	 	40	 
	15.5
	 	No Duty to Examine, Etc	 	 	40	 
	15.6
	 	Agents as Lenders	 	 	40	 
	15.7
	 	Acts of the Agents	 	 	40	 
	15.8
	 	Certain Amendments	 	 	41	 
	15.9
	 	Assumption re Event of Default	 	 	41	 
	15.10
	 	Limitations of Liability	 	 	42	 
	15.11
	 	Indemnification of the Agents	 	 	42	 
	15.12
	 	Consultation with Counsel	 	 	42	 
	15.13
	 	Resignation	 	 	42	 
	15.14
	 	Representations of Lenders	 	 	43	 
	15.15
	 	Notification of Event of Default.  The Facility	 	 	43	 
	16. NOTICES AND DEMANDS	 	 	43	 
	16.1
	 	Notices	 	 	43	 
	17. MISCELLANEOUS	 	 	44	 
	17.1
	 	Time of Essence	 	 	44	 
	17.2
	 	Unenforceable, etc., Provisions - Effect	 	 	44	 
	17.3
	 	References	 	 	44	 
	17.4
	 	Further Assurances	 	 	44	 
	17.5
	 	Prior Agreements, Merger	 	 	44	 
	17.6
	 	Entire Agreement; Amendments	 	 	44	 
	17.7
	 	Indemnification	 	 	45	 
	17.8
	 	Headings	 	 	45	 
	17.9
	 	Customer Identification	 	 	45	 






iv









 






	 	 	 	 	 
	 	 	 	 	 

	SCHEDULE
	 	 	 	 	 

	 	1	 	 	The Lenders and the Initial Commitments

	 	2	 	 	The Vessels

	 	3	 	 	Disclosure

	 	4	 	 	Approved Ship Brokers

	 	5	 	 	General Conditions

	 	 	 	 	 

	EXHIBITS
	 	 	 	 	 

	 	A	 	 	Form of Note

	 	B	 	 	Form of United States Mortgage

	 	C	 	 	Form of Earnings Assignment

	 	D	 	 	Form of Insurances Assignment

	 	E	 	 	Form of Builder’s Warranties Assignment

	 	F	 	 	Form of Assignment and Assumption Agreement

	 	G	 	 	Form of Compliance Certificate

	 	H	 	 	Form of Drawdown Notice

	 	I	 	 	Form of Interest Notice

	 	J	 	 	Form of Account Pledge

	 	K	 	 	Form of Subordination Agreement








 











 





SENIOR SECURED CREDIT FACILITY




THIS SENIOR SECURED CREDIT FACILITY AGREEMENT (this “Credit Facility Agreement”) is made as of the
28 day of December, 2005, by and among (1) RIGDON MARINE CORPORATION, a corporation incorporated
under the laws of the State of Delaware (the “Borrower”), (2) the banks and financial institutions
listed on Schedule 1, as lenders (together with any bank or financial institution which becomes a
Lender pursuant to Article 10, the “Lenders”), and (3) DVB BANK NV, (“DVB”), as underwriter,
arranger, swap bank, book manager, facility agent for the Lenders (in such capacity, the “Facility
Agent”) and security trustee for the Lenders ( in such capacity, the “Security Trustee”).



WITNESSETH THAT:




     WHEREAS, the Borrower wishes to (i) partially finance the delivery installments and
acquisition costs of various vessels currently under construction and to be delivered to the
Borrower pursuant to the Building Contract and (ii) re-finance existing indebtedness with respect
to certain vessels owned by the Borrower;



     WHEREAS, at the request of the Borrower, the Facility Agent and the Security Trustee have
agreed to serve in such capacities under the terms of this Credit Facility Agreement and the
Lenders have agreed to provide to the Borrower a senior secured credit facility in the amount of up
to the lesser of (i) US$170,000,000 and (ii) 70% of the Fair Market Value of the Vessels (as such
terms are defined below);



     NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as set forth below:



1. DEFINITIONS




     1.1 Specific Definitions. In this Credit Facility Agreement the words and expressions
specified below shall, except where the context otherwise requires, have the meanings attributed to
them below:



	 	 	 
	“Acceptable Accounting Firm”

	 	means UHY Mann Frankfort Stein & Lipp of 12 Greenway
Plaza, Suite 1202, Houston, Texas, or such other
recognized international accounting firm as shall be
approved by the Agent, such approval not to be
unreasonably withheld;
	 
	 	 
	“Account Pledge”

	 	means the pledge agreement to be executed by the Borrower
in favor of the Security Trustee in respect of the
Operating Account pursuant to Section 4.1(b),
substantially in the form set out in Exhibit L;
	 
	 	 
	“Advance(s)”

	 	means any amount advanced to the Borrower with respect to
the Facility or (as the context may require) the
aggregate amount of all such Advances for the time being
outstanding;
	 
	 	 
	“Affiliate”

	 	means with respect to any Person, any other Person






 









 






	 	 	 
	 

	 	directly or indirectly controlled by or under common
control with such Person. For the purposes of this
definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common
control with”) as applied to any Person means the
possession directly or indirectly of the power to direct
or cause the direction of the management and policies of
that Person whether through ownership of voting
securities or by contract or otherwise;
	 
	 	 
	“Agents”

	 	means each of the Facility Agent and the Security Trustee;
	 
	 	 
	“Applicable Margin”

	 	means 1.50% per annum;
	 
	 	 
	“Applicable Rate”

	 	means any rate of interest applicable to the Facility
from time to time pursuant to Section 6.1;
	 
	 	 
	“Assigned Moneys”

	 	means sums assigned to or received by the Agents pursuant
to any Security Document;
	 
	 	 
	“Assignment and Assumption
Agreement(s)”

	 	means any Assignment and Assumption Agreement executed
pursuant to Section 10 substantially in the form set out
in Exhibit H;
	 
	 	 
	“Assignment Notices”

	 	means
	 
	 	 
	 

	 	(i)      notices with respect to the Earnings Assignments
substantially in the form set out in Exhibit 1 thereto;

	 
	 	 
	 

	 	(ii)     notices with respect to the Insurances Assignments
substantially in the form set out in Exhibit 3 thereto;

	 
	 	 
	 

	 	(iii)    notices with respect to Builder’s Warranties
Assignments substantially in the form set out in Exhibit
1 thereto; and

	 
	 	 
	 

	 	(iv)    notices with respect to the Account Pledges
substantially in the form set out in Exhibit 1 thereto;

	 
	 	 
	“Assignments”

	 	means the Earnings Assignments, the Insurances
Assignments, the Interest Rate Agreements Assignment, the
Account Pledge and the Builder’s Warranties Assignments;
	 
	 	 
	“Banking Day(s)”

	 	Means day(s) on which banks are open for the transaction
of business in London, England, New York, New York,
andRotterdam, The Netherlands;






2









 






	 	 	 
	“Borrower”

	 	shall have the meaning ascribed thereto in the preamble;
	 
	 	 
	“Builder”

	 	means Bollinger Shipyards Lockport, L.L.C.;
	 
	 	 
	“Building Contract(s) “

	 	means that certain Vessel Construction Contract for the
Construction of Ten (10) 1,575 D.W.T. platform supply
vessels (Hull Nos. 521, 522, 523, 524, 525, 526, 527,
528, 529, and 530) dated November 9, 2005 between Builder
and RMCLLC as the same will be from time to time assigned
to the Borrower upon the delivery of each GPA 654 Vessel
thereunder;
	 
	 	 
	“Builder’s Warranties
Assignments”

	 	means the assignment(s) in respect of the post-delivery
warranties and guarantees from the Builder to the
Borrower contained in the Building Contracts, to be
executed by the Borrower in favor of the Security Trustee
pursuant to Section 4.1(c) substantially in the form set
out in Exhibit G;
	 
	 	 
	“Capital Lease”

	 	means any lease of property which in accordance with GAAP
would be capitalized on the lessee’s balance sheet;
	 
	 	 
	“Change of Control”

	 	means (a) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more
than 25% of the total voting power of the Borrower, (b)
the Board of Directors of the Borrower ceases to consist
of a majority of the directors existing on the date
hereof or directors nominated by the shareholders
existing on the date hereof, or (c) Larry Rigdon ceases
to be employed by the Borrower in a management capacity,
except as a result of Larry Rigdon’s death or disability;
	 
	 	 
	“Classification Society”

	 	means a member of the International Association of
Classification Societies with whom the Vessels are
entered and who conducted periodic physical surveys
and/or inspections of the Vessels;
	 
	 	 
	“Code”

	 	means the Internal Revenue Code of 1986, as amended, and
any successor statute and regulation promulgated
thereunder;
	 
	 	 
	“Collateral”

	 	means all property or other assets, real or personal,
tangible or intangible, whether now owned or hereafter
acquired in which any Agent or any Lender has been
granted a security interest pursuant to a Security
Document;






3









 






	 	 	 
	“Commitment(s)”

	 	means in relation to a Lender, the portion of the
Facility set out opposite its name in Schedule 1 or, as
the case may be, in any relevant Assignment and
Assumption Agreement, as such amount shall be reduced
from time to time pursuant to Section 5;
	 
	 	 
	“Compliance Certificate”

	 	means a certificate certifying the compliance by the
Borrower with all of its covenants contained herein and
showing the calculations thereof in reasonable detail,
and delivered by the chief financial officer of the
Borrower to the Facility Agent from time to time pursuant
to Section 9.1(d) in the form set out in Exhibit I, or in
such other form as the Majority Lenders may agree;
	 
	 	 
	“Consolidated Debt”

	 	means the total of all Funded Debt of the Borrower and
its Subsidiaries after eliminating all offsetting debits
and credits between the Borrower and its Subsidiaries and
all other items required to be eliminated by GAAP;
	 
	 	 
	“Consolidated Net Earnings”

	 	means the net earnings of the Borrower and its
Subsidiaries after deducting minority interests and any
common stock dividend payments in accordance with GAAP,
excluding (i) extraordinary items and (ii) any equity
interest of the Borrower on the unremitted earnings of
any company other than the Subsidiaries;
	 
	 	 
	“Consolidated Net Worth”

	 	means, at any time, shareholders equity (including
treasury stock) of the Borrower on a consolidated basis
determined in accordance with GAAP;
	 
	 	 
	“Consolidated Total Assets”

	 	means the total assets of the Borrower and its
Subsidiaries determined on a consolidated basis in
accordance with GAAP;
	 
	 	 
	“Consolidated Total
Capitalization”

	 	means the sum of Consolidated Debt, minority interest,
the Subordinated Mortgage and Consolidated Net Worth;
	 
	 	 
	“Credit Facility Agreement”

	 	means this agreement, as the same shall be amended,
modified or supplemented from time to time;
	 
	 	 
	“Default Rate”

	 	shall have the meaning ascribed thereto in Section 6.2;
	 
	 	 
	“Depository”

	 	Regions Bank, 301 St. Charles Ave, New Orleans, LA. 70130;
	 
	 	 
	“DOC”

	 	means a document of compliance issued to an Operator in
accordance with rule 13 of the ISM Code;






4









 






	 	 	 
	“Dollars” and the sign “$”

	 	means the legal currency, at any relevant time hereunder,
of the United States of America and, in relation to all
payments hereunder, in same day funds settled through the
New York Clearing House Interbank Payments System (or
such other Dollar funds as may be determined by the
Facility Agent to be customary for the settlement in New
York City of banking transactions of the type herein
involved);
	 
	 	 
	“Drawdown Date(s)”

	 	means the dates, each being a Banking Day, upon which the
Borrower has requested that an Advance be made available
to the Borrower, and such Advance is made, as provided in
Section 3;
	 
	 	 
	“Drawdown Notice”

	 	shall have the meaning ascribed thereto in Section 3.2;
	 
	 	 
	“DVB”

	 	shall have the meaning ascribed thereto in the Preamble;
	 
	 	 
	“Earnings Assignment(s)”

	 	means the collateral assignments in respect of the
earnings of each Vessel from any and all sources to be
executed by the Borrower in favor of the Security
Trustee pursuant to Section 4.2(c) substantially in the
form set out in Exhibit C;
	 
	 	 
	“Environmental Affiliate(s)”

	 	means any person or entity, the liability of which for
Environmental Claims the Borrower may have assumed by
contract or operation of law;
	 
	 	 
	“Environmental Approval(s)”

	 	shall have the meaning ascribed thereto in Section 2.1(n);
	 
	 	 
	“Environmental Claim(s)”

	 	shall have the meaning ascribed thereto in Section 2.1(n);
	 
	 	 
	“Environmental Law(s)”

	 	shall have the meaning ascribed thereto in Section 2.1(n);
	 
	 	 
	“ERISA”

	 	means the Employment Retirement Income Security Act of
1974, as amended;
	 
	 	 
	“ERISA Affiliate”

	 	means a trade or business (whether or not incorporated)
which is under common control with the Borrower within
the meaning of Sections 414(b), (c), (m) or (o) of the
Code;
	 
	 	 
	“Event(s) of Default”

	 	means any of the events set out in Section 8.1;
	 
	 	 
	“Exchange Act”

	 	shall mean the Securities and Exchange Act of 1934, as
amended;
	 
	 	 
	“Facility”

	 	means the credit facility to be made available by the
Lenders to the Borrower hereunder, in two tranches,






5









 






	 	 	 
	 

	 	pursuant to Section 3 in the maximum aggregate principal
amount equal to the lesser of (i) One Hundred Seventy
Million Dollars ($170,000,000) and (ii) Seventy Percent
(70%) of the Fair Market Value of the Vessels;
	 
	 	 
	“Facility Agent”

	 	shall have the meaning attributed thereto in the preamble;
	 
	 	 
	“Fair Market Value”

	 	means, in respect of any vessel, a charter-free appraisal
on an “as is”, “willing seller, willing buyer” basis of
such vessel from a ship broker listed in Schedule 4 or
such other independent ship broker approved by the
Majority Lenders, no such appraisal to be dated more than
thirty (30) days prior to the date on which such
appraisal is required pursuant to this Credit Facility
Agreement;
	 
	 	 
	“Fixed Charges”

	 	means the consolidated Interest Expense for the period,
plus dividends paid on common stock, plus minimum rent
payments under operating leases for the period;
	 
	 	 
	“Funded Debt”

	 	means all the liabilities for borrowed money, obligations
in respect of any Capital Lease, and any guarantee of the
foregoing, but shall exclude (i) such obligations and
guarantees if owed or guaranteed by a Subsidiary to the
Borrower or another Subsidiary or by the Borrower to a
Subsidiary, (ii) any common stock of the Borrower or a
Subsidiary and (iii) the Subordinated Mortgage Debt;
	 
	 	 
	“GAAP”

	 	shall have the meaning ascribed thereto in Section 1.3;
	 
	 	 
	“General Conditions”

	 	means the General Banking conditions of DVB in the form
attached hereto as Schedule 5;
	 
	 	 
	“GPA 654 Vessels”

	 	means those Vessels listed on Schedule 2 under the
heading GPA 654 Vessels;
	 
	 	 
	“Indemnitee”

	 	shall have the meaning ascribed thereto in Section 17.7;
	 
	 	 
	“Insurances Assignments”

	 	means the collateral assignments in respect of the
insurances over the Vessels to be executed by the
Borrower in favor of the Security Trustee pursuant to
Section 4.2(c) substantially in the form set out in
Exhibit D;
	 
	 	 
	“Interest Charges”

	 	means the periodic interest paid by the Borrower to the
Agent on behalf of the Lenders in relation to the
Facility;
	 
	 	 
	“Interest Expense”

	 	means the consolidated interest expense of the Borrower
and its Subsidiaries for any period (including both
capitalized and non-capitalized interest and the interest
component of capitalized leases);






6









 






	 	 	 
	“Interest Notice”

	 	means a notice from the Borrower to the Facility Agent
specifying the duration of any relevant Interest Period,
each substantially in the form of Exhibit I;
	 
	 	 
	“Interest Payment Date”

	 	means each date on which accrued interest on the Facility
shall be payable pursuant to Section 6.4;
	 
	 	 
	“Interest Period(s)”

	 	means period(s) of one, three, six or twelve months as
selected by the Borrower; provided, however, that the
Interest Period for any portion of the Facility which is
subject to an Interest Rate Agreement shall be one month;
	 
	 	 
	“Interest Rate Agreements”

	 	means any interest rate protection agreement, interest
rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement
entered into between the Borrower, with the Arranger,
which is designed to protect the Borrower against
fluctuations in interest rates applicable under this
Agreement, to or under which the Borrower is a party or a
beneficiary on the date of this Agreement or becomes a
party or a beneficiary hereafter; provided, however, that
there shall be no more than three Interest Rate
Agreements in connection with this Facility;
	 
	 	 
	“Interest Rate Agreements
Assignments”

	 	means a collateral assignment in respect of any Interest
Rate Agreements to be executed by the Borrower in favor
of the Security Trustee pursuant to Section 4.1(b) in
such form as the Security Trustee shall reasonably
require;
	 
	 	 
	“ISPS Code”

	 	means the International Ship and Port Facility Security
Code adopted by the International Maritime Organization
(as the same may be amended from time to time);
	 
	 	 
	“ISSC”

	 	means a valid and current International Ship Security
Certificate issued under the ISPS Code;
	 
	 	 
	“ISM Code”

	 	means the International Safety Management Code for the
Safe Operating of Ships and for Pollution Prevention
constituted pursuant to Resolution A.741(18) of the
International Maritime Organization and incorporated into
the Safety of Life at Sea Convention and includes any
amendments or extensions thereto and any regulation
issued pursuant thereto;






7









 






	 	 	 
	“Jones Act Eligible”

	 	means a vessel which is documented under the laws of the
United States with a coastwise endorsement and is
qualified for trade between U.S. ports (i.e. coastwise
trade) under the Merchant Marine Act of 1920, as amended
(and codified as amended at 46 U.S.C. App. § 883), which
is also known as the Jones Act;
	 
	 	 
	“Lender(s)”

	 	shall have the meaning ascribed thereto in the preamble;
	 
	 	 
	“LIBOR”

	 	means the rate (rounded upward to the nearest 1/16th of
one percent) for deposits of Dollars for a period
equivalent to the relevant Interest Period at or about
11:00 a.m. (London time) on the second London Banking Day
before the first day of such period as 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
(“BBAIRS” terms) dated August 1985)), provided that if on
such date no such rate is so displayed for the relevant
Interest Period, LIBOR for such period shall be the
arithmetic mean (rounded upward if necessary to four
decimal places) of the rate offered by DVB for deposits
of Dollars in an amount approximately equal to the amount
in relation to which LIBOR is to be determined for a
period equivalent to the relevant Interest Period to
prime banks in the London Interbank Market at or about
11:00 a.m. (London time) on the second Banking Day before
the first day of such period;
	 
	 	 
	“Lien”

	 	means, as to any entity, any mortgage, lien, pledge,
adverse claim, charge, security interest or other
encumbrance in or on, or interest or title of any vendor,
lessor, lender or other secured party to or of the entity
under conditional sale or other title retention agreement
or Capital Lease with respect to, any property or asset
of the entity;
	 
	 	 
	“Majority Lenders”

	 	at any time means Lenders holding an aggregate of more
than 50% of the Advances then outstanding;
	 
	 	 
	“Mandate Letter”

	 	means the letter dated October 20, 2005, as supplemented
by that letter dated November 15, 2005 and as the same
may be further amended or supplemented, and entered into
by the Borrower and DVB in respect of this facility;






8









 






	 	 	 
	“Material Adverse Effect”

	 	shall mean a material adverse effect on (i) the ability
of the Borrower to repay the Advances or perform any of
its obligations hereunder or under the Note, (ii) the
ability of the Borrower to perform its obligations under
any Security Documents or (iii) the business, property,
assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Borrower taken as a whole;
	 
	 	 
	“Materials of Environmental
Concern”

	 	shall have the meaning ascribed thereto in Section 2.1(o);
	 
	 	 
	“Mortgages”

	 	means the first preferred United States ship mortgages on
the Vessels, to be executed by the Borrower as listed in
Schedule 2 in favor of the Security Trustee (as trustee
for the Lenders) pursuant to Section 4.2(c),
substantially in the form set out in Exhibits B-1 and
B-2;
	 
	 	 
	“MTSA”

	 	means the Maritime and Transportation Security Act, 2002,
as amended, inter alia, by Public Law 107-295;
	 
	 	 
	“Multiemployer Plan”

	 	means, at any time, a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate is making or accruing an obligation to
make contributions or has within any of the three
preceding plan years made or accrued an obligation to
make contributions;
	 
	 	 
	“Multiple Employer Plan”

	 	means, at any time, an employee benefit plan, other than
a Multiemployer Plan, subject to Title IV or ERISA, to
which the Borrower or any ERISA Affiliate, and one or
more employers other than the Borrower or an ERISA
Affiliate, is making or accruing an obligation to make
contributions or, in the event that any such plan has
been terminated, to which the Borrower or any ERISA
Affiliate made or accrued an obligation to make
contributions during any of the five plan years preceding
the date of termination of such plan;
	 
	 	 
	“Note”

	 	means the promissory note to be executed by the Borrower
to the order of an Agent pursuant to Section 4.1(b), to
evidence the Facility substantially in the form set out
Exhibit A;
	 
	 	 
	“Operating Account”

	 	shall have the meaning ascribed thereto in Section 4.1(h);
	 
	 	 
	“Operator”

	 	means, in respect of any Vessel, the Person who is
concerned with the operation of such Vessel and falls
within the definition of “Company” set out in rule 1.1.2
of the ISM Code;






9









 






	 	 	 
	“PBGC”

	 	means the Pension Benefit Guaranty Corporation;
	 
	 	 
	“Permitted Investments”

	 	means, with respect to the Borrower’s investments, (i)
the existing Restricted Investments identified on
Schedule 3 hereto, (ii) certificates of deposit with a
final maturity date of one year or less issued by
nationally chartered commercial banks in the United
States having capital and surplus in excess of
$100,000,000, (iii) commercial paper with a maturity of
one year or less, (iv) direct obligations of the United
States or a United States agency with a final maturity
date of one year or less, (v) money market preferred
stock rated ‘A’ or above, (vi) tax exempt floating rate
option tender bonds, backed by a letter of credit issued
by a bank rated AA by Standard & Poor’s Corporation or AA
by Moody’s Investor Service and (vii) investments in
consolidated Subsidiaries which conduct business similar
to the Borrower’s existing business operations;
	 
	 	 
	“Person”

	 	means any individual, sole proprietorship, corporation,
partnership (general or limited), limited liability
company, business trust, bank, trust company, joint
venture, association, joint stock company, trust or other
unincorporated organization, whether or not a legal
entity, or any government or agency or political
subdivision thereof;
	 
	 	 
	“Plan”

	 	means any employee benefit plan (other than a
Multiemployer Plan or a Multiple Employer Plan) covered
by Title IV of ERISA;
	 
	 	 
	“Pre-existing Vessels”

	 	means each of those Vessels which shall have been
purchased by and delivered to the Borrower prior to the
date of this Credit Facility Agreement and listed on
Schedule 2 under the heading Pre-existing Vessels;
	 
	 	 
	“Proceeding”

	 	shall have the meaning ascribed thereto in Section 8.1(h);
	 
	 	 
	“Property”

	 	means any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible;
	 
	 	 
	“Restricted Investment(s)”

	 	means any investment other than a Permitted Investment;
	 
	 	 
	“Restricted Payment”

	 	means any of (i) the payment of any accrued and unpaid
interest on the Subordinated Second Mortgage Debt, (ii)
the declaration or payment of any dividend or other
distribution on account of its stock (except dividends or
stock splits paid solely in common stock of the Borrower)
and (iii) purchases, redemptions, or other acquisitions
(direct of indirect) of shares of its common stock;






10









 






	 	 	 
	“Required Percentage”

	 	means one hundred and forty-three percent (143%);
	 
	 	 
	“RMCLLC”

	 	means Rigdon Marine, LLC, a limited liability company
organized and existing under the laws of the State of
Louisiana;
	 
	 	 
	“Security Document(s)”

	 	means the Mortgages, the Assignments, the Account Pledge
and any other documents that may be executed as security
for the Facility and the Borrower’s obligations in
connection therewith;
	 
	 	 
	“Security Trustee”

	 	shall have the meaning attributed thereto in the preamble;
	 
	 	 
	“SMC”

	 	means the safety management certificate issued in respect
of a Vessel in accordance with rule 13 of the ISM code;
	 
	 	 
	“Subordinated Lender”

	 	means Bourbon Capital U.S.A., Inc.;
	 
	 	 
	“Subordinated Mortgage”

	 	means the second preferred fleet mortgage in favor of
Subordinated Lender over each of the Pre-existing Vessels
and as shall be amended or supplemented to cover any GPA
654 Vessels;
	 
	 	 
	“Subordinated Mortgage Debt”

	 	means the ninety million dollar ($90,000,000) loan made
or to be made available by the Subordinated Lender to the
Borrower pursuant to a loan agreement of even date
herewith between the Borrower and the Subordinated Lender
and evidenced by a promissory note of even date herewith;
	 
	 	 
	“Subordination Agreement”

	 	means the subordination agreement to be entered into by
the Agent on behalf of the Lenders and the Subordinated
Lender pursuant to Section 4.1(k), substantially in the
form of Exhibit K;
	 
	 	 
	“Subsidiary(ies)”

	 	means, with respect to any Person, any business entity of
which more than 50% of the outstanding voting stock or
other equity interest is owned directly or indirectly by
such Person and/or one or more other Subsidiaries of such
Person;
	 
	 	 
	“Taxes”

	 	means any present or future income or other taxes,
levies, duties, charges, fees, deductions or withholdings
of any nature now or hereafter imposed, levied,
collected, withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured by the
overall net income of each Lender imposed by its
jurisdiction of incorporation or applicable lending
office, the United States of America, the State or City
of New York or any governmental






11









 






	 	 	 
	 

	 	subdivision or taxing
authority of any thereof or by any other taxing authority
having jurisdiction over such Lender (unless such
jurisdiction is asserted by reason of the activities of
the Borrower or any Affiliate thereof);
	 
	 	 
	“Termination Event”

	 	means (i) a “reportable event,” as defined in Section 403
of ERISA (other than a “reportable event” not subject to
the provision for 30-day notice to the PBGC), (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a
Multiemployer Plan during a plan year in which it was a
“substantial employer,” as defined in Section 4001(a)(2)
of ERISA, or the incurrence of liability by the Borrower
or any ERISA Affiliate under Section 4064 of ERISA upon
the termination of a Multiple Employer Plan, (iii) the
filing of a notice of intent to terminate a Plan under
Section 4041of ERISA or the treatment of a Multiemployer
Plan amendment as a termination under Section 4041A of
ERISA, (iv) the institution of proceedings to terminate a
Plan or a Multiemployer Plan, or (v) any other event or
condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or Multiemployer
Plan;
	 
	 	 
	“Total Loss”

	 	shall have the meaning ascribed thereto in the Mortgages;
	 
	 	 
	“Tranche A”

	 	means the tranche to be made available by the Lenders to
the Borrower hereunder in a single advance pursuant to
Section 3.1(a) in the maximum aggregate principal amount
of Ninety-Five Million Dollars ($95,000,000) but in no
event greater than Seventy Percent (70%) of the Fair
Market Value of the Pre-existing Vessels;
	 
	 	 
	“Tranche A Final Payment”

	 	means the balloon payment of $28,472,000 or such other
amount as may be necessary to repay Tranche A on the
Tranche A Final Payment Date, together with accrued but
unpaid interest and any other amounts owing by the
Borrower to the Facility Agent, the Security Trustee or
any Lender pursuant to this Credit Facility Agreement,
the Note or any Security Document;
	 
	 	 
	“Tranche A Final Payment Date”

	 	means the date which is seven (7) years from the Drawdown
Date of Tranche A, but in no event later than January 31,
2013;
	 
	 	 
	“Tranche B”

	 	means the tranche to be made available by the Lenders to
the Borrower hereunder in multiple advances pursuant to
Section 3.1(b) in the maximum aggregate principal amount
of Seventy-Five Million Dollars ($75,000,000) but in no
event shall any Advance thereunder, when aggregated with






12









 






	 	 	 
	 

	 	other amounts outstanding under the Facility, cause the
Facility to exceed Seventy Percent (70%) of the aggregate
Fair Market Value of the Pre-existing Vessels and the GPA
654 Vessels financed with the proceeds of the Facility;
	 
	 	 
	“Tranche B Final Payment”

	 	means the balloon payment of $38,062,500 or such other
amount as may be necessary to repay Tranche B on the
Tranche B Final Payment Date as a consequence of, inter
alia, changed delivery dates of the GPA 654 Vessels,
together with accrued but unpaid interest and any other
amounts owing by the Borrower to the Facility Agent, the
Security Trustee or any Lender pursuant to this Credit
Facility Agreement, the Note or any Security Document;
	 
	 	 
	Tranche B Final Payment Date”

	 	means the date which is five (5) years from the final
Advance made under Tranche B, but in no event later than
the Tranche A Final Payment Date;
	 
	 	 
	“Vessel(s)”

	 	each of the Vessels listed in Schedule 2, registered or
to be registered in the name of the Borrower as set forth
in such Schedule, but excluding any Vessel for which a
mandatory prepayment was made pursuant to section 5.3;
and
	 
	 	 
	“Withdrawal Liability(ies)”

	 	shall have the meaning given to such term under Part 1 of
Subtitle E of Title IV of ERISA.






     1.2 Computation of Time Periods; Other Definitional Provisions. In this Credit
Facility Agreement, the Note and the Security Documents, in the computation of periods of time from
a specified date to a later specified date, the word “from” means “from and including” and the
words “to” and “until” each mean “to but excluding”; words importing either gender include the
other gender; references to “writing” include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words “including,” “includes” and “include” shall
be deemed to be followed by the words “without limitation”; references to articles, sections (or
subdivisions of sections), exhibits, annexes or schedules are to this Credit Facility Agreement,
the Note or such Security Document, as applicable; references to agreements and other contractual
instruments (including this Credit Facility Agreement, the Note and the Security Documents) shall
be deemed to include all subsequent amendments, amendments and restatements, supplements,
extensions, replacements and other modifications to such instruments (without, however, limiting
any prohibition on any such amendments, extensions and other modifications by the terms of this
Credit Facility Agreement, the Note or any Security Document); references to any matter that is
“approved” or requires “approval” of a party shall mean approval given in the sole and absolute
discretion of such party unless otherwise specified.



     1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used in this
Credit Facility Agreement, the Note and in the Security Documents shall be interpreted, and all
financial statements and certificates and reports as to financial matters required to be delivered
to the Facility Agent or to the Lenders under this Credit Facility Agreement shall be prepared, in
accordance with generally accepted accounting principles for the United States (“GAAP”).




13











 





     1.4 Certain Matters Regarding Materiality. To the extent that any representation,
warranty, covenant or other undertaking of the Borrower in this Credit Facility Agreement is
qualified by reference to those which are not reasonably expected to result in a “Material Adverse
Effect” or language of similar import, no inference shall be drawn therefrom that any Agent or
Lender has knowledge or approves of any noncompliance by the Borrower with any governmental rule.



     1.5 Forms of Documents. Except as otherwise expressly provided in this Credit
Facility Agreement, references to documents or certificates “substantially in the form” of Exhibits
to another document shall mean that such documents or certificates are duly completed in the form
of the related Exhibits with substantive changes subject to the provisions of Section 17.6 of this
Credit Facility Agreement, as the case may be, or the correlative provisions of the Security
Documents.



     1.6 General Conditions. Certain matters governing banking relationships between DVB in
its capacities as Agent and Security Trustee and the Borrower are governed by the General
Conditions.



2. REPRESENTATIONS AND WARRANTIES 




     2.1 Representations and Warranties. In order to induce the Agents and the Lenders to
enter into this Credit Facility Agreement and to induce the Lenders to make the Facility available,
the Borrower hereby represents and warrants to the Agents and the Lenders (which representations
and warranties shall survive the execution and delivery of this Credit Facility Agreement and the
Note and the drawdown of each Advance hereunder) that:



          (a) Due Organization and Power. The Borrower is duly formed and is validly existing in
good standing under the laws of its jurisdiction of incorporation or formation, has full power to
carry on its business as now being conducted and to enter into and perform its obligations under
this Credit Facility Agreement, the Note and the Security Documents, and has complied with all
statutory, regulatory and other requirements relative to such business and such agreements;



          (b) Authorization and Consents. All necessary corporate action has been taken to
authorize, and all necessary consents and authorities have been obtained and remain in full force
and effect to permit, the Borrower to enter into and perform its obligations under this Credit
Facility Agreement, the Note and the Security Documents and, to borrow, service and repay the
Advances and, as of the date of this Credit Facility Agreement, no further consents or authorities
are necessary for the service and repayment of the Advances or any part thereof;



          (c) Binding Obligations. This Credit Facility Agreement, the Note and the Security
Documents constitute or will, when executed and delivered, constitute the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except to
the extent that such enforcement may be limited by equitable principles, principles of public
policy or applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
generally the enforcement of creditors’ rights;



          (d) No Violation. The execution and delivery of, and the performance of the provisions
of, this Credit Facility Agreement, the Note and the Security Documents do not contravene any
applicable law or regulation existing at the date hereof or any contractual restriction binding on
the Borrower or the certificate of incorporation or by-laws (or equivalent instruments) thereof and
that the proceeds of the Advances shall be used by the Borrower exclusively for its own account or
for the account ;



14









 





          (e) Litigation. No action, suit or proceeding is pending or threatened against the
Borrower before any court, board of arbitration or administrative agency which could or might
result in any Material Adverse Effect;



          (f) No Default. The Borrower is not in default under any material agreement by which it
is bound, or is in default in respect of any material financial commitment or obligation;



          (g) Vessels. Upon the date of the making of each Advance each of the Vessels being
delivered in connection with such Advance or having been theretofore delivered in connection with
this Credit Facility Agreement and each of the Pre-existing Vessels:




	 	(i)	 	will be in the sole and absolute ownership of the
Borrower and duly registered in the Borrower’s name under United
States flag shall be Jones Act Eligible, unencumbered, save and except
for the Mortgage recorded against it and as permitted thereby, and the
Subordinated Mortgage;
	 
	 	(ii)	 	will be classed in the highest classification and
rating for vessels of the same age and type with the respective
Classification Society as set forth in Schedule 2 without any material
outstanding recommendations;
	 
	 	(iii)	 	will be operationally seaworthy and in every way
fit for its intended service;
	 
	 	(iv)	 	will be insured in accordance with the provisions
of the Mortgage recorded against it and the requirements thereof in
respect of such insurances will have been complied with and;
	 
	 	(v)	 	will be in compliance in all material respects
with all relevant laws, regulations and requirements (including
Environmental Laws), statutory or otherwise, as are applicable to (A)
vessels documented under the United States flag and that are Jones Act Eligible and (B)
vessels engaged in trade similar to that to be performed by the
Vessel, except where the failure to so comply would not have a
material adverse effect on the operation of the Vessel in its intended
trade or the financial condition of the Borrowers;





          (h) Insurance. The Borrower and each Subsidiary has insured its properties and assets
against such risks and in such amounts as are customary for companies engaged in similar
businesses;



          (i) Financial Information. All financial statements, information and other data furnished
by the Borrower to the Facility Agent are complete and correct, such financial statements have been
prepared in accordance with GAAP and accurately and fairly present the financial condition of the
parties covered thereby as of the respective dates thereof and the results of the operations
thereof for the period or respective periods covered by such financial statements, and since the
date of the Borrower’s financial statements most recently delivered to the Facility Agent there has
been no Material Adverse Effect as to any of such parties and none thereof has any contingent
obligations, liabilities for taxes or other outstanding financial obligations which are material in
the aggregate except as disclosed in such statements, information and data;



15









 





          (j) Tax Returns. The Borrower and each Subsidiary has filed all material tax returns
required to be filed thereby and has paid all taxes payable thereby which have become due, other
than those not yet delinquent or the nonpayment of which would not have a Material Adverse Effect
on the Borrower or such Subsidiary and except for those taxes being contested in good faith and by
appropriate proceedings or other acts and for which adequate reserves shall have been set aside on
its books;



          (k) ERISA. The execution and delivery of this Credit Facility Agreement and the
consummation of the transactions hereunder will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code and no condition exists or event or transaction has
occurred in connection with any Plan maintained or contributed to by the Borrower or any Subsidiary
or any ERISA Affiliate resulting from the failure of any thereof to comply with ERISA insofar as
ERISA applies thereto which is reasonably likely to result in the Borrower or any such Subsidiary
or any ERISA Affiliate incurring any liability, fine or penalty which individually or in the
aggregate would have a Material Adverse Effect. Prior to the date hereof, the Borrower has
delivered to the Facility Agent a list of all the employee benefit plans to which the Borrower or
any Subsidiary or any ERISA Affiliate is a “party in interest” (within the meaning of Section 3(14)
of ERISA) or a “disqualified person” (within the meaning of Section 4975(e)(2) of the Code);



          (l) Chief Executive Office. The Borrower’s chief executive office and chief place of
business and the office in which the records relating to the earnings and other receivables of each
Subsidiary are kept is, and will continue to be, located at 815 Walker Street, Suite 750, Houston,
Texas, 77002;



          (m) Foreign Trade Control Regulations. To the best of the Borrower’s knowledge, none of
the transactions contemplated herein will violate any of the provisions of the Foreign Assets
Control Regulations of the United States of America (Title 31, Code of Federal Regulations, Chapter
V, Part 500, as amended), any of the provisions of the Cuban Assets Control Regulations of the
United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 515, as amended),
any of the provisions of the Iranian Transaction Regulations of the United States of America (Title
31, Code of Federal Regulations, Chapter V, Part 560, as amended), or any of the provisions of the
Regulations of the United States of America Governing Transactions in Foreign Shipping of
Merchandise (Title 31, Code of Federal Regulations, Chapter V, Part 505, as amended);



          (n) Environmental Matters and Claims. (a) Except as heretofore disclosed in writing to
the Facility Agent, to the best of the Borrower’s knowledge and belief, (i) the Borrower, each of
its Subsidiaries and their Affiliates is in compliance with all applicable United States federal
and state, local, foreign and international laws, regulations, conventions and agreements relating
to pollution prevention or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, navigable waters, waters of the contiguous
zone, ocean waters and international waters), including, without limitation, laws, regulations,
conventions and agreements relating to (1) emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous materials, oil,
hazardous substances, petroleum and petroleum products and by-products (“Materials of Environmental
Concern”), or (2) the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (“Environmental Laws”); (ii) the
Borrower, each of its Subsidiaries and their Affiliates has all permits, licenses, approvals,
rulings, variances, exemptions, clearances, consents or other authorizations required under
applicable Environmental Laws (“Environmental Approvals”) and is in compliance with all
Environmental



16









 







Approvals required to operate their business; (iii) none of the Borrower, any
Subsidiary nor any Affiliate thereof has received any notice of any claim, action, cause of action,
investigation or demand by any person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or instrumentality thereof, alleging
potential liability for, or a requirement to incur, material investigator costs, cleanup costs,
response and/or remedial costs (whether incurred by a governmental entity or otherwise), natural
resources damages, property damages, personal injuries, attorneys’ fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the presence, or release or
threat of release into the environment, of any Materials of Environmental Concern at any location,
whether or not owned by such person, or (2) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law or Environmental Approval (“Environmental Claim”)
(other than Environmental Claims that have been fully and finally adjudicated or otherwise
determined and all fines, penalties and other costs, if any, payable by the Security Parties in
respect thereof have been paid in full or which are fully covered by insurance (including permitted
deductibles)); and (iv) there are no circumstances that may prevent or interfere with such full
compliance in the future; and (b) except as heretofore disclosed in writing to the Facility Agent
there is no Environmental Claim pending or threatened against the Borrower, any Subsidiary or any
Affiliate thereof and there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission, discharge or disposal of
any Materials of Environmental Concern, that could form the basis of any Environmental Claim against such persons the adverse
disposition of which may result in a Material Adverse Effect;



          (o) Compliance with ISM Code, ISPS Code and MTSA. Each Vessel complies or, when
applicable, will comply and each Operator complies with the requirements of the ISM Code, the ISPS
Code and the MTSA including (but not limited to) the maintenance and renewal of valid certificates
pursuant thereto;



          (p) No Threatened Withdrawal of DOC, ISSC or SMC. There is no threatened or actual
withdrawal of any Operator’s DOC, ISSC or SMC or other certification or documentation related to
the ISM Code, the ISPS Code or otherwise required for the operation of such vessels in respect of
any of the Vessels;



          (q) Liens. Other than as disclosed on Schedule 3, including the Subordinated Mortgage
Debt, there are no liens of any kind on any Property owned by the Borrower or any Subsidiary of the
Borrower;



          (r) Funded Debt. Other than as disclosed in Schedule 3, the Borrower (and its
Subsidiaries on a consolidated basis) has no long-term Funded Debt and has not entered into any
negotiations with respect to any debt facilities other than those undertaken in connection with
this Credit Facility Agreement; and



          (s) Survival. All representations, covenants and warranties made herein and in any
certificate or other document delivered pursuant hereto or in connection herewith shall survive the
making of the Advances and the issuance of the Note.



3. THE ADVANCES




     3.1 Availability. Subject to the terms and conditions hereof, each of the Lenders
agrees severally and not jointly, in the proportion of its Commitment hereunder, to make the
Facility available to the Borrower in an aggregate amount of up to the lesser of (i) One Hundred
Seventy



17









 







Million United States Dollars ($170,000,000) or (ii) seventy percent (70%) of the Fair
Market Value of the Vessels, to be made available in two (2) tranches as follows:



          (a) term loan in the aggregate principal amount of up to $95,000,000 (the “Tranche A
Facility”) solely for the purpose of partially refinancing the Pre-existing Vessels;



          (b) term loan facility in the aggregate principal amount of up to $75,000,000 (the “Tranche B
Facility”) solely for the purpose of partially financing the delivery installments and acquisition
costs each of the GPA 654 Vessels;



     3.2 Receipt of Funds. Unless the Facility Agent shall have received notice from a Lender prior to the Drawdown Date
of any Advance that such Lender will not make available to the Administrative Agent such Lender’s
share of such Advance, the Administrative Agent may assume that such Lender has made such share
available to the Administrative Agent on the date of such Advance in accordance this Section 3.2
and the Facility Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall not have so made
such share available to the Facility Agent, such Lender and the Borrower (but without duplication)
severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of
the Borrower, a rate per annum equal to the higher of (y) the LIBOR rate for overnight or weekend
deposits plus the Margin and (z) the interest rate applicable thereto pursuant to Section 6.1 and
(ii) in the case of such Lender, the LIBOR rate for overnight or weekend deposits. If such Lender
shall repay to the Facility Agent such corresponding amount, such amount so repaid shall constitute
such Lender’s Advance included in such Advance for purposes of this Credit Facility Agreement as of
the date such Advance was made. Nothing in this subsection (c) shall be deemed to relieve any
Lender of its obligation to make Advances to the extent provided in this Agreement. In the event
that the Borrower is required to repay an Advance to the Facility Agent pursuant to this Section
3.2 as between the Borrower and the defaulting Lender, the liability for any breakfunding costs as
described in Section 4.3 shall be borne by the defaulting Lender. If the defaulting Lender has not
paid any such breakage costs upon demand by the Facility Agent therefor, the Borrower shall pay
such breakage costs upon demand by the Facility Agent and the Borrower shall be entitled to recover
any such payment for breakfunding costs made by the Borrower from the defaulting Lender.



     3.3 Drawdown Notice. The Borrower shall, at least three (3) Banking Days before a
Drawdown Date, serve a notice (a “Drawdown Notice”) substantially in the form of Exhibit H on the
Facility Agent which notice shall (a) be in writing addressed to the Facility Agent, (b) be
effective on receipt by the Facility Agent, (c) specify the amount and purpose of such Advance to
be drawn, (d) specify the Banking Day on which such Advance is to be drawn and, subject to the
terms of Section 6.3 hereof, the Interest Period, (e) specify the disbursement instructions, (f)
attach evidence satisfactory to the Facility Agent that the Borrower is in compliance with the
covenants set forth in Section 9.3 and Section 9.4, as the case may be, (g) with respect to Tranche
B, attach the delivery invoice under the Building Contract and copies of invoices from third party
suppliers whose materials have been incorporated into the applicable Vessel to which such Advance
relates, which such invoices shall clearly identify the Building Contract(s) and the Vessel(s) to
which it relates, and (h) be irrevocable.



     3.4 Effect of Drawdown Notice. Such Drawdown Notice shall be deemed to constitute a
warranty by the Borrower (a) that the representations and warranties stated in Section 2 (updated
mutatis mutandis) are true and correct on and as of the date of such Drawdown
Notice and will be



18









 







true and correct on and as of the relevant Drawdown Date as if made on such
date, and (b) that no Event of Default nor any event which with the giving of notice or lapse of
time or both would constitute an Event of Default has occurred and is continuing.



     3.5 Notation of Advances. Each Advance made by the Lenders to the Borrower may be
evidenced by a notation of the same made by Facility Agent on the grid attached to the Note, which
notation, absent manifest error, shall be prima facie evidence of the amount of the relevant
Advance.



4. CONDITIONS




     4.1 Conditions Precedent to the Effectiveness of this Credit Facility Agreement. The
effectiveness of this Credit Facility Agreement and the obligation of the Lenders to make an
Advance available to the Borrower under this Credit Facility Agreement shall be expressly subject
to the following conditions precedent:



          (a) Corporate Authority. The Facility Agent shall have received the following documents
in form and substance satisfactory to the Facility Agent:




	 	(i)	 	copies, certified as true and complete by an
officer of the Borrower, of the resolutions of the board of directors of
the Borrower evidencing approval of this Credit Facility Agreement and
the Note and approving the opening of any bank accounts with the Agent
or the Security Trustee and authorizing an appropriate officer or
officers or attorney-in-fact or attorneys-in-fact to execute the same on
its behalf, or other evidence of such approvals and authorizations;
	 
	 	(ii)	 	copies, certified as true and complete by an
officer of the Borrower, of all documents evidencing any other necessary
action (including actions by such parties thereto other than the
Borrower as may be required by the Facility Agent), approvals or
consents with respect to this Credit Facility Agreement, the Note and
the Security Documents;
	 
	 	(iii)	 	copies, certified as true and complete by an
officer of the Borrower of the certificate of incorporation and by-laws,
certificate of formation and operating agreement, or equivalent
instruments thereof;
	 
	 	(iv)	 	certificate of the Secretary of the Borrower
certifying the incumbency of the directors and officers thereof
(setting out specimen signatures of any signatories to this Agreement,
the Note and any other documents to be executed by the Borrower)
	 
	 	(v)	 	certificates of the jurisdiction of incorporation
or formation, as the case may be, of the Borrower as to the good
standing thereof; and
	 
	 	(vi)	 	copies of passports, driver’s licenses or such
other proof of identity as the Agent may require in order to insure
compliance with all applicable “Know Your Customer” rules;





          (b) The Credit Facility Agreement, the Note Pledge. the Borrower shall have duly executed and delivered to the Facility Agent this Credit Facility
Agreement, the Note, the



19









 







Interest Rate Agreements Assignment (in respect of any theretofore
executed Interest Rate Agreement), and the Account Pledge;



          (c) Environmental Claims. The Facility Agent shall be satisfied that neither the Borrower
nor any of its Subsidiaries is subject to any Environmental Claim which could have a Material
Adverse Effect;



          (d) Fees. The Facility Agent shall have received payment in full of all fees and expenses
then due to the Agents and/or the Lenders under Section 13 and the Mandate Letter;



          (e) Account. The Borrower (i) shall have established a master operating account with the
Depository into which Assigned Moneys are to be paid (the “Operating Account”) and (ii) shall have
established an account with the Facility Agent for the purposes of, inter alia, effecting timely
payments of amounts due hereunder;



          (f) Compliance Certificate. The Facility Agent having received a Compliance Certificate
with respect to the most recently ended fiscal quarter;



          (g) Building Contracts. The Facility Agent having received copies of all Building
Contracts, and contracts with third party suppliers of material components of the GPA 654 Vessels
certified as true and complete by an officer of the Borrower , which contracts shall be
satisfactory to the Facility Agent and its counsel;



          (h) Subordination Agreement. The Subordinated Lender shall have entered into a
Subordination Agreement with the Lenders and the Borrower shall have delivered copies of the
documents relating to the Subordinated Mortgage Loan to the Facility Agent, which documents shall
be in form and substance satisfactory thereto;



          (i) Subordinated Mortgage. The Facility Agent having received a copy of the Subordinated
Mortgage, certified as true and complete by an officer of the Borrower; and



          (j) Legal Opinions. The Facility Agent, on behalf of the Agents and the Lenders, shall
have received legal opinions addressed to the Facility Agent from (i) Lugenbuhl, Wheaton, Peck,
Rankin and Hubbard, counsel for the Security Parties, (ii) Winston & Strawn, counsel for the
Subordinated Lender, and (iii) Seward & Kissel LLP, special counsel to the Agents and Lenders, in
each case in such form as the Facility Agent may require, as well as such other legal opinions as
the Facility Agent shall have required as to all or any matters under the laws of the United States
of America and the State of New York covering the representations and conditions which are the subjects
of Sections 2 and 4.1.



     4.2 Further Conditions Precedent. The obligation of the Lenders to make any Advance
available to the Borrower under this Credit Facility Agreement shall be expressly and separately
subject to the following further conditions precedent on the relevant Drawdown Date:



          (a) Drawdown Notice. The Facility Agent having received a Drawdown Notice in accordance
with the terms of Section 3.2;



          (b) The Vessels. The Facility Agent shall have received evidence satisfactory to it that
each of the Vessels owned by the Borrower being delivered in connection with such Advance or
previously delivered and/or acquired by the Borrower:




	 	(i)	 	is in the sole and absolute ownership of the
Borrower as set forth in Schedule 2 and duly registered in the
Borrower’s name under United States flag, Jones Act Eligible,
unencumbered, save and except for the 




20









 






	 	 	 	Mortgage, recorded against it and
as otherwise permitted thereby, and the Subordinated Mortgage;






	 	(ii)	 	is classed in the highest classification and
rating for vessels of the same age and type with the respective
classification society as set forth in Schedule 2 without any material
outstanding recommendations;
	 
	 	(iii)	 	is operationally seaworthy and in every way fit
for its intended service; and
	 
	 	(iv)	 	is insured in accordance with the provisions of
the Mortgage recorded against it and the requirements thereof in respect
of such insurances have been complied with;





          (c) Vessel Documents. The Borrower shall have duly executed and delivered to the Facility
Agent with respect to the Pre-Existing Vessels, and the GPA 654 Vessel being financed in connection
with such Advance:




	 	(i)	 	the Mortgage over such Vessel(s);
	 
	 	(ii)	 	an Insurances Assignment with respect to its Vessel(s);
	 
	 	(iii)	 	an Earnings Assignment with respect to its Vessel(s);
	 
	 	(iv)	 	the Builder’s Warranties Assignments with respect to its Vessel(s);
	 
	 	(v)	 	the Assignment Notices with respect to the
above-indicated Insurances Assignments, Earnings Assignments and
Builder’s Warranties Assignments; and
	 
	 	(vi)	 	Uniform Commercial Code Financing Statements for
filing with the State of Delaware and in such other jurisdictions as the
Facility Agent may reasonably require;





          (d) Representations and Warranties. The representations stated in Section 2 (updated
mutatis mutandis to such date) being true and correct as if made on and as of that date;



          (e) No Event of Default. No Event of Default having occurred and being continuing and no
event having occurred and being continuing which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default;



          (f) No Change in Laws. The Facility Agent being satisfied that no change in any
applicable laws, regulations, rules or in the interpretation thereof shall have occurred which make
it unlawful for any Security Party to make any payment as required under the terms of this Credit
Facility Agreement, the Note, the Security Documents or any of them;



          (g) No Material Adverse Effect. There having been no Material Adverse Effect since the
date hereof;



          (h) Vessel Liens. The Facility Agent shall have received evidence satisfactory to it and
to its legal advisor that, save for the liens created by the Mortgages and the Assignments,



21









 







there are no liens, charges or encumbrances of any kind whatsoever on each of the Vessels being delivered
in connection with such Advance or on their respective earnings except the Subordinated Mortgage
and as permitted hereby or by any of the Security Documents;



          (i)
Charters; Pooling Agreements. The Borrower shall have delivered to the Facility Agent
true and complete copies of (i) all charters having a term longer than twelve (12) months from the
date of execution and (ii) all vessel pooling agreements, in each case to which the Borrower is a
party;



          (j)
ISM DOC and ISSC. The Facility Agent shall have received a copy of the DOC and ISSC
for of the Vessels;



          (k)
Legal Opinions. The Facility Agent, on behalf of the Agents and the Lenders, shall
have received legal opinions addressed to the Facility Agent from (i) Lugenbuhl, Wheaton, Peck,
Rankin and Hubbard, counsel for the Security Parties and (ii) Seward & Kissel LLP, special counsel to the
Agents and Lenders, in each case in such form as the Facility Agent may require, as well as such
other legal opinions as the Facility Agent shall have required as to all or any matters under the
laws of the United States of America and the State of New York covering the representations and
conditions which are the subjects of this Section 4.2.



     4.3 Breakfunding Costs. In the event that, on the date specified for the making of an
Advance in any Drawdown Notice, the Lenders shall not be obliged under this Credit Facility
Agreement to make such Advance available, the Borrower shall indemnify and hold the Lenders fully
harmless against any losses which the Lenders (or any thereof) may sustain as a result of borrowing
or agreeing to borrow funds to meet the drawdown requirement of such Drawdown Notice and the
certificate of the relevant Lender or Lenders shall, absent manifest error, be conclusive and
binding on the Borrower as to the extent of any such losses.



     4.4 Satisfaction after Drawdown. Without prejudice to any of the other terms and
conditions of this Credit Facility Agreement, in the event the Lenders, in their sole discretion,
make any Advance prior to the satisfaction of all or any of the conditions referred to in Sections
4.1 or 4.2, the Borrower hereby covenants and undertakes to satisfy or procure the satisfaction of
such condition or conditions within five (5) days after the relevant Drawdown Date (or such longer
period as the Lenders, in their sole discretion, may agree).



5. REPAYMENT AND PREPAYMENT




     5.1 Repayment. Subject to the provisions of Section 5 regarding application of
prepayments, the Borrower shall repay the principal amount of that portion of the Facility
attributable to each Tranche in accordance with the following:



          (a) Tranche A shall be repaid in eighty-four (84) consecutive monthly installments, commencing
at the end of the first full month following the Drawdown Date for Tranche A, each payment to be in
the principal amount of Seven Hundred Ninety Two Thousand Dollars ($792,000), the last such
installment being made on the Tranche A Final Payment date together with the Tranche A Final
Payment. If the initial aggregate principal amount of Tranche A is less than $95,000,000, all
payments of principal, including the Tranche A Final Payment, will be reduced pro rata; and



          (b) each Advance made under Tranche B for each GPA 654 Vessel shall be repaid in consecutive
monthly installments, commencing on the last day of the first full month after



22









 







the Drawdown Date for such Advance, each payment to be in the principal amount of Sixty Two Thousand Five Hundred
Dollars ($62,500); provided, however, that if upon drawdown the amount of the Tranche B
Advance for the delivered GPA 654 vessel is less than one-tenth
(1/10th) of the maximum
aggregate principal amount of Tranche B, the respective installment amount and the Tranche B Final
Payment will be reduced pro rata. The last such monthly installment shall be made on the Tranche B
Final Payment date together with the Tranche B Final Payment. The payment dates for each Advance made under Tranche B shall be consolidated with Tranche A, on a
per-vessel basis, on the end of the month following the Drawdown Date for each Vessel. The
Borrower shall reimburse the Lenders for any and all costs or expenses incurred by any Lender in
connection with any breaking of funding (as certified by such Lender, which certification shall,
absent any manifest error, be conclusive and binding on the Borrower) as a consequence of such
consolidation or otherwise.



     5.2 Voluntary Prepayment; No Re-borrowing. The Borrower may prepay, upon five (5)
Banking Days written notice, any outstanding Advance or any portion thereof, without penalty,
provided that such prepayment is made on the last day of the Interest Period of such Advance. Each
prepayment shall be in a minimum amount equal to one repayment installment for the Tranche to which
such Advance relates, or in an integral multiple thereof Amounts prepaid under this Section 5.2
shall be applied to the remaining payments on a pro-rata basis and will not be available for
re-borrowing.



     5.3 Mandatory Prepayment; Sale or Loss of Vessel. On (i) any sale of a Vessel (subject in
all cases to the provisions of Section 9.2(e) hereof) or (ii) the earlier of (x) one hundred eighty
(180) days after the Total Loss of a Vessel or (y) the date on which the insurance proceeds in
respect of such loss are received by the Borrower or the Facility Agent as assignee thereof,
outstanding amounts under the Facility shall be prepaid in an amount equal to the sum of the then
committed amount under this Credit Facility Agreement related to the proportionate value of the
respective Vessel (determined at the time of such prepayment). Prepayments made under this Section
5.3 shall be applied to the remaining payments on a pro-rata basis and will not be available for
re-borrowing.



     5.4 Interest and Costs with Prepayments/Application of Prepayments. Any prepayment of
the Advances made hereunder (including, without limitation, those made pursuant to Sections 5 and
9) shall be subject to the condition that on the date of prepayment all accrued interest to the
date of such prepayment shall be paid in full with respect to the Advances or portions thereof
being prepaid, together with any and all costs or expenses incurred by any Lender in connection
with any breaking of funding (as certified by such Lender, which certification shall, absent any
manifest error, be conclusive and binding on the Borrower) or any partial or complete termination
of an Interest Rate Agreement.



6. INTEREST AND RATE




     6.1 Applicable Rate. Each Advance shall bear interest at the Applicable Rate, which
shall be the rate per annum which is equal to the aggregate of (a) LIBOR for the relevant Interest
Period plus (b) the Applicable Margin. The Applicable Rate shall be determined by the Facility
Agent two (2) Banking Days prior to the first (1st) day of the relevant Interest Period.
The Facility Agent shall promptly notify the Borrower in writing of the Applicable Rate as and
when determined. Each such determination, absent manifest error, shall be conclusive and binding
upon



23









 







the Borrower. The Borrower may elect to fix the Applicable Rate by entering into an Interest
Rate Agreement with the Facility Agent.



     6.2 Default Rate. Any amounts due under this Credit Facility Agreement, not paid when
due, whether by acceleration or otherwise, shall bear interest thereafter from the due date thereof
until the date of payment at a rate per annum equal to (i) the otherwise Applicable Rate (as
notified to the Borrower by the Facility Agent), plus (ii) the Applicable Margin, plus (iii) three
percent (3%) (the “Default Rate”). In addition, following the occurrence of any Event of Default,
the Facility Agent may, and upon instruction of the Majority Lenders shall, deliver a notice to the
Borrower advising the Borrower that an Event of Default has occurred. From the date of any such
notice, or in the case of the occurrence of an Event of Default of the type described in Sections
8.1(a) or 8.1(b), from the date such Event of Default first occurred, until each such Event of
Default is cured to the satisfaction of the Majority Lenders, the Facility shall bear interest at
the Default Rate.



     6.3 Interest Periods.



          The Borrower shall give the Facility Agent an Interest Notice specifying the Interest Period
selected at least three (3) Banking Days prior to the end of any then existing Interest Period. If
at the end of any then existing Interest Period the Borrower fails to give an Interest Notice the
relevant Interest Period shall be one (1) month. The Borrower’s right to select an Interest Period
shall be subject to the restriction that no selection of an Interest Period shall be effective
unless LIBOR is available for such period and that no Event of Default or event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default shall have
occurred and be continuing. In addition, there may be no more than three (3) different Interest
Periods in respect of Advances made hereunder at any one time. Interest Periods for each Advance
made under Tranche B shall be consolidated at the earlier of the end of the Interest Period
immediately following the delivery date for the last delivered Vessel. The Borrower shall reimburse
the Lenders for any and all costs or expenses incurred by any Lender in connection with any
breaking of funding (as certified by such Lender, which certification shall, absent any manifest
error, be conclusive and binding on the Borrower) as a consequence of such consolidation or
otherwise.



     6.4 Interest Payments. Accrued interest on the Facility shall be payable in arrears
on the last day of each Interest Period, except that if the Borrower shall select an Interest
Period in excess of one (1) month, accrued interest shall be payable during such Interest Period on
each one (1) month anniversary of the commencement of such Interest Period and upon the end of such
Interest Period.



7. PAYMENTS




     7.1 Place of Payments, No Set Off. All payments to be made hereunder by the Borrower shall
be made to the Facility Agent, not later than 10 a.m. New York time (any payment received after 10
a.m. New York time shall be deemed to have been paid on the next Banking Day) on the due date of
such payment, at its office located at Parklaan 2, 3016 BB Rotterdam, The Netherlands or to such
other office of the Facility Agent as the Facility Agent may direct, without set-off or
counterclaim and free from, clear of, and without deduction for, any Taxes, provided, however, that
if the Borrower shall at any time be compelled by law to withhold or deduct any Taxes from any amounts payable to the Lenders hereunder, then the
Borrower shall pay such additional amounts in Dollars as may be necessary in order that the net
amounts received after withholding or deduction shall equal the amounts which would have been
received if such withholding or deduction were not required and, in the event any withholding or
deduction is made, whether for Taxes or otherwise, the Borrower shall promptly send to the Facility
Agent such documentary evidence with respect to



24









 







such withholding or deduction as may be required from time to time by the Lenders. The Borrower shall send, or cause to be sent, a SWIFT message to
the Facility Agent confirming the remittance of any payment hereunder at the time such payment is
made.



     7.2 Tax Credits. If any Lender obtains the benefit of a credit against the liability
thereof for federal income taxes imposed by any taxing authority for all or part of the Taxes as to
which the Borrower has paid additional amounts as aforesaid (and each Lender agrees to use its best
efforts to obtain the benefit of any such credit which may be available to it, provided it has
knowledge that such credit is in fact available to it), then such Lender shall reimburse the
Borrower for the amount of the credit so obtained. Each Lender agrees that in the event that Taxes
are imposed on account of the situs of its loans hereunder, such Lender, upon acquiring knowledge
of such event, shall, if reasonable, shift such loans on its books to another office of such Lender
so as to avoid the imposition of such Taxes. Nothing contained in this clause shall in any way
prejudice the right of the Lenders to arrange their tax affairs in such way as they, in their sole
discretion, deem appropriate. In particular, no Lender shall be required to obtain such tax
credit, if this interferes with the way, such Lender normally deals with its tax affairs.



     7.3 Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of
a right of banker’s lien, setoff or counterclaim or pursuant to a secured claim under Section 506
of the Federal Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, exercised or received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Advance or Advances as a result of which its funded Commitment shall be
proportionately less than the funded Commitment of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the funded Commitment of such other
Lender so that the aggregate funded Commitment of each Lender shall be in the same proportion to
the aggregate funded Commitments then outstanding as its funded Commitment prior to such exercise
of banker’s lien, setoff or counterclaim or other event was to the principal amount of all funded
Commitments outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other
event; provided, however, that, if any such purchase or purchases or adjustments
shall be made pursuant to this Section 7.3 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without interest. Any Lender
holding a participation in a funded Commitment deemed to have been so purchased may exercise any
and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing to
such Lender by reason thereof as fully as if such Lender had made an Advance in the amount of such participation. The Borrower
expressly consents to the foregoing arrangement.



     7.4 Computations; Banking Days. (a) All computations of interest and fees shall be made by
the Facility Agent or the Lenders, as the case may be, on the basis of a 360-day year, in each case
for the actual number of days (including the first day but excluding the last day) occurring in the
period for which interest or fees are payable. Each determination by the Facility Agent or the
Lenders of an interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.



          (b) Whenever any payment hereunder or under the Note shall be stated to be due on a day other
than a Banking Day, such payment shall be due and payable on the next succeeding



25









 







Banking Day unless the next succeeding Banking Day falls in the following calendar month, in which case it shall be
payable on the immediately preceding Banking Day.



8. EVENTS OF DEFAULT




     8.1 Events of Default. The occurrence of any of the following events shall be an
Event of Default:



          (a) Non-Payment of Principal. Any payment of principal is not paid when due or, in the
event such non-payment is solely the result of a banking error or the occurrence of a day on which
banks are closed for business in London or Rotterdam (but not the United States), is not paid
within two (2) days of the due date; or



          (b) Non-Payment of Interest or Other Amounts. Any interest or any other amount becoming
payable to the Facility Agent or any Lender under this Credit Facility Agreement, under the Note or
under any of the Security Documents is not paid on the due date or date of demand (as the case may
be), and such default continues unremedied for a period of five (5) Banking Days; or



          (c) Representations. Any representation, warranty or other statement made by the Borrower
in this Credit Facility Agreement or by any Security Party or in any of the Security Documents or
in any other instrument, document or other agreement delivered in connection herewith or therewith
proves to have been untrue or misleading in any material respect as at the date as of which made or
confirmed; or



          (d) Mortgage. There is an event of default under any Mortgage; or



          (e) Covenants. The Borrower defaults in the due and punctual observance or performance of
any other term, covenant or agreement contained in this Credit Facility Agreement, in the Note, in
any of the Security Documents or in any other instrument, document or other agreement delivered in
connection herewith or therewith, or it becomes impossible or unlawful for the Borrower to fulfill
any such term, covenant or agreement or there occurs any other event which constitutes a default
under this Credit Facility Agreement, under the Note or under any of the Security Documents, in
each case other than an Event of Default referred to elsewhere in this Section 8.1, and such
default, impossibility and/or unlawfulness, in the reasonable opinion of the Majority Lenders,
could have a material adverse effect on the Lenders’ rights or the ability of the Security Parties
to perform their obligations hereunder, under the Note and/or under the Security Documents or on
the Lenders’ right to enforce this Credit Facility Agreement, the Note and/or the Security
Documents, and continues unremedied or unchanged, as the case may be, for a period of thirty (30)
days; or



          (f) Funded Debt. The Borrower, any Subsidiary or any Affiliate of the Borrower shall
default in the payment when due (subject to any applicable grace period) of any Funded Debt or of
any other indebtedness, in either case, in the outstanding principal amount equal to or exceeding
Five Hundred Thousand Dollars ($500,000) or such Funded Debt or indebtedness is, or by reason of
such default is subject to being, accelerated or any party becomes entitled to enforce the security
for any such Funded Debt or indebtedness and such party shall take steps to enforce the same,
unless such default or enforcement is being contested in good faith and by appropriate proceedings
or other acts and the Security Party, Subsidiary or Affiliate of the Borrower, as the case may be,
shall set aside on its books adequate reserves with respect thereto; or



26









 





          (g) Bankruptcy. The Borrower, any Subsidiary or any Affiliate of the Borrower commences
any proceeding under any reorganization, arrangement or readjustment of debt, dissolution, winding
up, adjustment, composition, bankruptcy or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect (a “Proceeding”), or there is commenced against any thereof any
Proceeding and such Proceeding remains undismissed or unstayed for a period of thirty (30) days or
any receiver, trustee, liquidator or sequestrator of, or for, any thereof or any substantial
portion of the property of any thereof is appointed and is not discharged within a period of thirty
(30) days or any thereof by any act indicates consent to or approval of or acquiescence in any
Proceeding or the appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or of, or for, any substantial portion of its property; or



          (h) Termination of Operations; Sale of Assets. Except as expressly permitted under Clause
9.2(e) of this Credit Facility Agreement, the Borrower ceases its operations or sells or otherwise
disposes of all or substantially all of its assets or all or substantially all of the assets of
any Security Party are seized or otherwise appropriated; or



          (i) Judgments. Any judgment or order is made the effect whereof would be to render
ineffective or invalid this Credit Facility Agreement, the Note or any of the Security Documents or
any material provision thereof, or the Borrower asserts that any such agreement or provision
thereof is invalid; or



          (j) Inability to Pay Debts. The Borrower, any Subsidiary or any Affiliate of the Borrower is unable to pay or admits its
inability to pay its debts as they fall due or a moratorium shall be declared in respect of any
material indebtedness of the Borrower or any Affiliate of the Borrower; or



          (k) Change in Financial Position. Any change in the financial position of the Borrower or
any Affiliate of the Borrower which, in the reasonable opinion of the Majority Lenders, shall have
a Material Adverse Effect; or



          (l) Change in Control. A Change of Control shall occur with respect to the Borrower; or



          (m) Cross-Default. The Borrower, any Subsidiary or any Affiliate of the Borrower
defaults under any contract or agreement to which it is a party or by which it is bound and such
default could reasonably be expected to have a Material Adverse Effect; or



          (n) ERISA Debt. (i) The Borrower or any ERISA Affiliate fails to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it or they have become liable to pay under
Title IV of ERISA or (ii) the Borrower or any ERISA Affiliate, individually or collectively,
incurs, or should reasonably expect to incur, any Withdrawal Liability or liability upon the
happening of a Termination Event and the aggregate of all such Withdrawal Liabilities and such
other liabilities exceeds $10,000,000.



          Upon and during the continuance of any Event of Default, the Lenders’ obligation to make any
Advance available shall cease and the Facility Agent may, and on the instructions of the Majority
Lenders shall, by notice to the Borrower, declare the entire unpaid balance of the then outstanding
Advances, accrued interest and any other sums payable by the Borrower hereunder or under the Note
due and payable, whereupon the same shall forthwith be due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived; provided that upon the
happening of an event specified in subsections (g) or (j) of this Section 8.1 with respect to the
Borrower, the Note shall be immediately due and payable without declaration or



27









 







other notice to the Borrower. In such event, the Lenders may proceed to protect and enforce their rights by action at
law, suit in equity or in admiralty or other appropriate proceeding, whether for specific
performance of any covenant contained in this Credit Facility Agreement, in the Note or in any
Security Document, or in aid of the exercise of any power granted herein or therein, or the Lenders
may proceed to enforce the payment of the Note or to enforce any other legal or equitable right of
the Lenders, or proceed to take any action authorized or permitted under the terms of any Security
Document or by applicable law for the collection of all sums due, or so declared due, on the Note.
Without limiting the foregoing, the Borrower agrees that during the continuance of any Event of
Default each of the Lenders shall have the right to appropriate and hold or apply (directly, by way
of set-off or otherwise) to the payment of the obligations of the Borrower to the Lenders hereunder
and/or under the Note (whether or not then due) all moneys and other amounts of the Borrower then
or thereafter in possession of any Lender, the balance of any deposit account (demand or time,
mature or unmatured) of the Borrower then or thereafter with any Lender and every other claim of
the Borrower then or thereafter against any of the Lenders.



     8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold the Agents
and the Lenders harmless against any loss, as well as against any reasonable costs or expenses
(including reasonable legal fees and expenses), which any of the Agents or the Lenders sustains or
incurs as a consequence of any default in payment of the principal amount of the Facility, interest
accrued thereon or any other amount payable hereunder, under the Note or under any Security
Documents including, but not limited to, all actual losses incurred in liquidating or re-employing
fixed deposits made by third parties or funds acquired to effect or maintain the Facility or any
portion thereof. Any Lenders’ certification of such costs and expenses shall, absent any manifest
error, be conclusive and binding on the Borrower.



     8.3 Application of Moneys. Except as otherwise provided in any Security Document, all
moneys received by the Agents or the Lenders under or pursuant to this Credit Facility Agreement,
the Note or any of the Security Documents after the happening of any Event of Default (unless cured
to the satisfaction of the Majority Lenders) shall be applied by the Facility Agent in the
following manner:



          (a) first, in or towards the payment or reimbursement of any expenses or liabilities incurred by
the Agents, or the Lenders in connection with the ascertainment, protection or enforcement of their
rights and remedies hereunder, under the Note and under any of the Security Documents,



          (b) secondly, in or towards payment of any interest owing in respect of the Facility, inclusive
of breakfunding costs,



          (c) thirdly, in or towards repayment of principal of the Facility and amounts owing under the
Interest Rate Agreements, on a pari passu basis,



          (d) fourthly, in or towards payment of all other sums which may be owing to the Agents, or any
of them, or the Lenders under this Credit Facility Agreement, under the Note, under the Mandate
Letter or under any of the Security Documents, and



          (e) fifthly, the surplus (if any) shall be paid to the Borrower or to whosoever else may be
entitled thereto.



9. COVENANTS




     9.1 Affirmative Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing



28









 







in respect of this Credit Facility Agreement, under the Note or under any of the Security
Documents, the Borrower will:



          (a) Performance of Agreements. Duly perform and observe, and procure the observance and
performance by all other parties thereto (other than the Lenders) of, the terms of this Credit
Facility Agreement, the Note and the Security Documents;



          (b) Notice of Default, etc. Promptly upon obtaining knowledge thereof, inform the
Facility Agent of the occurrence of (a) any Event of Default or of any event which, with the giving
of notice or lapse of time, or both, would constitute an Event of Default, (b) any litigation or
governmental proceeding pending or threatened against it or against any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect, (c) the withdrawal of any Vessel’s
rating by its Classification Society or the issuance by the Classification Society of any material
recommendation or notation affecting class and (d) any other event or condition which is reasonably
likely to have a Material Adverse Effect;



          (c) Obtain Consents. Without prejudice to Section 2.1 and this Section 9.1, obtain every
consent and do all other acts and things which may from time to time be necessary or advisable for
the continued due performance of all its and the other Security Parties’ respective obligations
under this Credit Facility Agreement, under the Note and under the Security Documents;



          (d) Financial Information. Deliver to each Lender:




	 	(i)	 	as soon as available but not later than one
hundred twenty (120) days after the end of each fiscal year of the
Borrower, complete copies of the consolidated financial reports of the
Borrower and its Subsidiaries (together with a Compliance Certificate),
all in reasonable detail, which shall include at least the consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such
year and the related consolidated statements of income and sources and
uses of funds for such year, which shall be audited reports prepared by
an Acceptable Accounting Firm;
	 
	 	(ii)	 	as soon as available but not later than
forty-five (45) days after the end of each of the first three quarters
of each fiscal year of the Borrower, a quarterly interim consolidated
balance sheet of the Borrower and its Subsidiaries and the related
consolidated profit and loss statements and sources and uses of funds
(together with a Compliance Certificate), all in reasonable detail,
unaudited, but certified to be true and complete by the chief financial
officer of the Borrower;
	 
	 	(iii)	 	within ten (10) days of the Borrower’s receipt
thereof, copies of all audit letters or other correspondence from any
external auditors including material financial information in respect of
the Borrower;
	 
	 	(iv)	 	such other statements (including, without
limitation, monthly consolidated statements of operating revenues and
expenses), lists of assets and accounts, budgets, forecasts, reports and
other financial information with respect to its business as the Facility
Agent may 




29









 






	 	 	 	from time to time reasonably request, certified to be true and complete by the chief financial officer of the Borrower;





          (e) Vessel Valuations. On the date here and each one year anniversary thereof, and in any
event upon the request of the Facility Agent, the Facility Agent shall obtain appraisals addressed
to the Facility Agent of the Fair Market Value of the Vessels. The first two such valuations in
any year are to be at the Borrower’s cost, provided, that following and during the
continuance of any Event of Default, all such valuations are to be at the Borrower’s cost. For
purposes of determining the aggregate Fair Market Value of all Vessels, appraisals will be obtained
for the oldest and the youngest Pre-Existing Vessel and for the oldest and most recently delivered
GPA 654 Vessel and the aggregate Fair Market Value shall be the sum of the arithmetic means of such
appraisals for each Vessel type multiplied by the number of Vessels of such type. If the Borrower
does not agree with the result of any appraisal, the Borrower may appoint an additional ship broker
from the list set forth in Schedule 4, or such other independent ship broker approved by the
Majority Lenders, to conduct a separate appraisal, and such additional valuation shall be averaged
for the purposes of this Section 9(e).



          (f) Corporate Existence. Do or cause to be done, and procure that each Subsidiary of the
Borrower shall do or cause to be done, all things necessary to preserve and keep in full force and
effect its corporate existence, or limited liability company existence, as the case may be, and all
licenses, franchises, permits and assets necessary to the conduct of its business;



          (g) Books and Records. At all times keep, and cause each Subsidiary of the Borrower to
keep, proper books of record and account into which full and correct entries shall be made in
accordance with GAAP;



          (h) Taxes and Assessments. Pay and discharge, and cause each Subsidiary of the Borrower
to pay and discharge, all material taxes, assessments and governmental charges or levies imposed
upon it or upon its income or property prior to the date upon which penalties attach thereto;
provided, however, that it shall not be required to pay and discharge, or cause to be paid and
discharged, any such tax, assessment, charge or levy so long as the legality thereof shall be
contested in good faith and by appropriate proceedings or other acts and it shall set aside on its
books adequate reserves with respect thereto;



          (i) Inspection. Allow, and cause each Subsidiary to allow, any representative or
representatives designated by the Facility Agent, subject to applicable laws and regulations, to
visit and inspect any of its properties, and, on request, to examine its books of account, records,
reports and other papers and to discuss its affairs, finances and accounts with its officers, all at such reasonable
times and as often as the Facility Agent reasonably requests;



          (j) Inspection and Survey Reports. The Borrower shall provide the Lenders with copies
of all inspection or survey reports on the Vessels issued by the Classification Society and all
internally generated reports addressing material items in respect of the condition of any of the
Vessels.



          (k) Compliance with Statutes, Agreements, etc. Do or cause to be done, and cause each
Subsidiary to do and cause to be done, all things necessary to comply with all material contracts
or agreements to which it, or any Subsidiary is a party, and all material laws, and the rules and
regulations thereunder, applicable to the Borrower or such Subsidiary, including, without
limitation, those laws, rules and regulations relating to employee benefit plans and environmental
matters;



30









 





          (l) Environmental Matters. Promptly upon the occurrence of any of the following
conditions, provide to the Facility Agent a certificate of a chief executive officer thereof,
specifying in detail the nature of such condition and its proposed response or the response of its
Environmental Affiliates: (a) its receipt or the receipt by any other Security Party or any
Environmental Affiliates of the Borrower or any other Security Party of any written communication
whatsoever that alleges that such person is not in compliance with any applicable Environmental Law
or Environmental Approval, if such noncompliance could reasonably be expected to have a Material
Adverse Effect, (b) knowledge by it, or by any other Security Party or any Environmental Affiliates
of the Borrower or any other Security Party that there exists any Environmental Claim pending or
threatened against any such person, which could reasonably be expected to have a Material Adverse
Effect, or (c) any release, emission, discharge or disposal of any material that could form the
basis of any Environmental Claim against it, any other Security Party or against any Environmental
Affiliates of the Borrower or any other Security Party, if such Environmental Claim could
reasonably be expected to have a Material Adverse Effect. Upon the written request by the Facility
Agent, it will submit to the Facility Agent at reasonable intervals, a report providing an update
of the status of any issue or claim identified in any notice or certificate required pursuant to
this subsection;



          (m) ERISA. Forthwith upon learning of the occurrence of any material liability of the
Borrower, any Subsidiary or any ERISA Affiliate pursuant to ERISA in connection with the
termination of any Plan or withdrawal or partial withdrawal of any multi-employer plan (as defined
in ERISA) or of a failure to satisfy the minimum funding standards of Section 412 of the Code or
Part 3 of Title I of ERISA by any Plan for which the Borrower, any Subsidiary or any ERISA
Affiliate is plan administrator (as defined in ERISA), furnish or cause to be furnished to the
Lenders written notice thereof;



          (n) Vessel Management. Cause each of the Vessels to be managed both commercially and
technically by the Borrower, a wholly-owned subsidiary thereof or its existing manager;



          (o) ISM Code, ISPS Code and MTSA Matters. (i) Procure that the Operator will comply with and ensure each of the Vessels will comply
with the requirements of (A) the ISM Code and the ISPS Code in accordance with the implementation
schedule thereof, including (but not limited to) the maintenance and renewal of valid certificates
pursuant thereto and (B) the MTSA; and (ii) will procure that the Operator will immediately inform
the Administrative Agent if there is any threatened or actual withdrawal, suspension, cancellation
or modification of its DOC or the ISSC or the SMC in respect of any Vessel; and (iii) will procure
that the Operator will promptly inform the Administrative Agent upon the issuance to the Borrower
or Operator of a DOC and the issuance to any Vessel of an ISSC and an SMC;



          (p) Brokerage Commissions, etc. Indemnify and hold each of the Agents and the Lenders
harmless from any claim for any brokerage commission, fee, or compensation from any broker or third
party resulting from the transactions contemplated hereby. The Facility Agent represents that it
has not used a broker in connection with the origination of this Facility;



          (q) Deposit Accounts; Assignment. Maintain an Operating Account with the Depository and
an account with the Facility Agent and shall procure that all earnings of any Vessels shall be paid
into the Operating Account.;



          (r) Insurance. Without prejudice to the provisions of the Mortgages, maintain, and cause
each other Security Party to maintain, with financially sound and reputable insurance



31









 







companies insurance on all their respective properties and against all such risks and in at least such
amounts as are usually insured against by companies of established reputation engaged in the same
or similar business from time to time; and



          (s) Interest Rate Agreements. Enter into Assignments of any Interest Rate Agreements
entered into in respect of Advances made subsequent to the Drawdown Date in respect of Tranche A.



     9.2 Negative Covenants. The Borrower hereby covenants and undertakes with the Lenders
that, from the date hereof and so long as any principal, interest or other moneys are owing in
respect of this Credit Facility Agreement, under the Note or under any of the Security Documents,
the Borrower will not, and will procure that no Subsidiary, to the extent applicable, will,
without the prior written consent of the Majority Lenders (or all of the Lenders if required by
Section 15.8):



          (a) Liens. Create, assume or permit to exist, any mortgage, pledge, lien, charge,
encumbrance or any security interest whatsoever upon any Collateral or other property except:




	 	(i)	 	liens disclosed in Schedule 3;
	 
	 	(ii)	 	liens for taxes not yet payable for which
adequate reserves have been maintained;
	 
	 	(iii)	 	the Mortgages, the Subordinated Mortgage, the
Assignments and other liens in favor of the Security Trustee;
	 
	 	(iv)	 	liens, charges and encumbrances against their
respective Vessels permitted to exist under the terms of the Mortgages;
	 
	 	(v)	 	other liens, charges and encumbrances incidental
to the conduct of the business of each such party, the ownership of any
such party’s property and assets and which do not in the aggregate
materially detract from the value of each such party’s property or
assets or materially impair the use thereof in the operation of its
business;





          (b) Change in Business. Materially change the nature of its business or commence any
business materially different from its current business;



          (c) Change in Flag, Class, Management or Ownership. Without the approval of the Majority
Lenders, change the flag of any Vessel, change the Classification Society of any Vessel, the
technical management of any Vessel or the immediate or ultimate ownership of any Vessel;



          (d) Sale or Pledge of Shares. Sell, assign, transfer, pledge or otherwise convey or
dispose of any of its shares (including by way of spin-off, installment sale or otherwise) of the
capital stock;



          (e) Sale of Assets. Sell, lease or transfer or otherwise dispose of (including by way of
bareboat charter) more than 25% of its Consolidated Total Assets, other than in the ordinary course
of business in any fiscal year; such sales, leases, transfers or other disposals during the term of
this Facility, not to exceed 50% of its Consolidated Total Assets except that (i) any Subsidiary
may sell, lease, transfer or otherwise dispose of its assets to the Borrower or any other
Subsidiary and (ii) the Borrower may sell, lease, transfer or otherwise dispose of its assets in
excess of the



32









 








limitations set forth in this Section 9.2(e) if the proceeds of such sales are used
towards the payment of (a) the Facility and (b) the Subordinated Mortgage Debt and all accrued
interest thereon, or (c) to purchase other similar property within one year of such sale;



          (f) Changes in Offices or Names. Change the location of its chief executive office or the
chief place of business any such parties, the office in which the records relating to the earnings
or insurances of the Vessels are kept unless the Lenders shall have received sixty (60) days prior
written notice of such change and, in on event, to any jurisdiction outside the United States of
America;



          (g) Consolidation and Merger. Consolidate with, or merge into, any corporation or other
entity, or merge any corporation or other entity into it;



          (h) Change Fiscal Year. Change its fiscal year.



          (i) Limitations on Ability to Make Distributions. Create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the ability of any
Subsidiary to (i) pay dividends or make any other distributions on its capital stock or limited
liability company interests, as the case may be, to the Borrower or pay any Funded Debt owed to the
Borrower if there has been any Event of Default or of any event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default or if all of the Tranche B funds have
not been drawn, (ii) make any loans or advances to the Borrower, or (iii) transfer any of its
property or assets to the Borrower;



          (j) Use of Corporate Funds. Pay out any funds to any company or person except (i) in the
ordinary course of business in connection with the management of the business of the Borrower,
including the operation and/or repair of the Vessels and other vessels owned or operated by such
parties and (ii) the servicing of the Funded Debt permitted hereunder (but excluding, any
repayments or prepayments of any Funded Debt other than the Facility);



          (k) No Money Laundering. In connection with this Credit Facility Agreement or any of the
Security Documents, contravene any law, official requirement or other regulatory measure or
procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive
(91/308/EEC) of the Council of the European Communities) and comparable United States Federal and
state laws.



          (l) Restricted Payment/Restricted Investments. The Borrower shall not make any Restricted
Payments or Restricted Investments; provided, however, that the Borrower may make Restricted
Payments and Restricted Investments to the extent that the aggregate of such any Restricted
Payments or Restricted Investments do not exceed fifty percent (50%) of the cumulative positive
Consolidated Net Earnings of the Borrower reduced by one hundred percent (100%) of any consolidated
net loss, each measured quarterly; provided, further, that no Restricted Payment or Restricted
Investment, other than the payment of interest on the Subordinated Second Mortgage Debt until
January 31, 2008 or until such time as all of the GPA 654 Vessels have been delivered. At no time
shall the Borrower make a Restricted Payment or Restricted Investment, if the making of such
Restricted Payment or Restricted Investment would, result in an Event of Default or an event which,
with the giving of notice or lapse of time or both, would constitute an Event of Default. For the
avoidance of doubt, no payment of principal shall be made in respect of the Subordinated Second
Mortgage Debt until all amounts owing to the Agents and the Lenders under or in connection with
this Agreement have been fully and indefeasibly repaid;



33









 





     9.3 Financial Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or other moneys are owing
in respect of this Credit Facility Agreement, under the Note or under any of the Security
Documents, the Borrower will:



          (a) Consolidated Net Worth. Maintain at all times a Consolidated Net Worth of not less
than Twenty Million Dollars ($20,000,000) plus fifty percent (50%) of the Borrower’s positive
Consolidated Net Earnings for each quarter after December 31, 2005;



          (b) Fixed Charge Coverage. Maintain at all times a ratio of Consolidated Net Earnings
before Fixed Charges and taxes to Interest Charges of not less than 2.0 to 1, calculated quarterly
on a trailing 12 month basis;



          (c) Limitation on Funded Debt. Maintain, at all times a ratio of Consolidated Debt to
Consolidated Total Capitalization of not greater than (i) .70:1.00
through December 31, 2007, (ii).65:1.00 through December 31, 2009, and (iii) .60:1.00 through December 31, 2010 and thereafter;
and



          (d) Limitation on Subsidiary Debt. Not permit any Subsidiary of the Borrower to create,
assume, incur, guarantee or otherwise become liable in respect of any Debt except (i) Debt of any
Person existing at the time such Person becomes a Subsidiary, and the extension, renewal or
replacement of such Debt, provided that the principal amount shall not be increased over the
original amount borrowed, and (ii) all other Debt of all Subsidiaries of the Borrower which in the
aggregate amount, including (i) above, shall not exceed 25% of the Borrower’s Consolidated Net
Worth.



     9.4 Asset Maintenance. If at any time during the term of the Credit Facility
Agreement, the result of (i) the sum of the Fair Market Values of the Vessels is less than the
Required Percentage of the outstanding amount of the Facility, the Borrower shall, within a period
of thirty (30) days following receipt by the Borrower of written notice from the Facility Agent
notifying the Borrower of such shortfall and specifying the amount thereof (which amount shall, in
the absence of manifest error, be deemed to be conclusive and binding on the Borrower), either
deliver to the Security Trustee, upon the Facility Agent’s request, such additional collateral as
may be satisfactory to the Lenders in their sole discretion of sufficient value to restore
compliance with the Required Percentage or (ii) the Borrower shall prepay such amount of the
Facility (together with interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as shall result in the Fair Market Value of the Vessels then mortgaged to
the Security Trustee being not less than the Required Percentage.



     10. ASSIGNMENT.



          This Credit Facility Agreement shall be binding upon, and inure to the benefit of, the
Borrower and the Lenders, the Agents and their respective successors and assigns, except that the
Borrower may not assign any of its rights or obligations hereunder. Subject to the requirement
that each Lender proposing to make an assignment hereunder to unaffiliated third parties first
grant the Facility Agent a right to purchase the portion of the Facility such Lender proposes to
assign on the same terms and conditions being offered thereby , each Lender shall be entitled to
assign its rights and obligations under this Credit Facility Agreement or grant participation(s) in
the Facility to any subsidiary, holding company or other affiliate of such Lender, to any
subsidiary or other affiliate company of any thereof or collateralized loan obligation fund or trust (“CLO”) or, with the
consent of the Borrower (except upon the occurrence and during the continuation of an Event of
Default in



34









 







which case the Borrower’s consent shall not be required), and the Facility Agent, each
such consent not to be unreasonably withheld and provided that no assignment shall result in
increased costs or withholding, to any other bank or financial institution, and in the case of a
partial assignment (other than to another Lender or to an affiliate of such Lender), such
assignment must be in a minimum amount of not less than $10,000,000 and after giving effect
thereto, the assigning Lender, if it retains any interest, shall retain an interest in the Facility
in a minimum amount of not less than $10,000,000 unless otherwise agreed by the Borrower and the
Facility Agent, and such Lender shall forthwith give notice of any such assignment or participation
to the Borrower and pay the Facility Agent an assignment fee of $3,000 for each such assignment or
participation; provided, however, that any such assignment must be made pursuant to
an Assignment and Assumption Agreement. The Borrower will take all reasonable actions requested by
the Agents or any Lender to effect such assignment, including, without limitation, the execution of
a written consent to any Assignment and Assumption Agreement.



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




     11.1 Illegality. In the event that by reason of any change in any applicable law,
regulation or regulatory requirement or in the interpretation thereof, a Lender has a reasonable
basis to conclude that it has become unlawful for any Lender to maintain or give effect to its
obligations as contemplated by this Credit Facility Agreement, such Lender shall inform the
Facility Agent and the Borrower to that effect, whereafter the liability of such Lender to make its
Commitment available shall forthwith cease and the Borrower shall be required either to repay to
such Lender that portion of the Facility advanced by such Lender immediately or, if such Lender so
agrees, to repay such portion of the Facility to such Lender on the last day of any then current
Interest Period in accordance with and subject to the provisions of Section 11.4. In any such
event, but without prejudice to the aforesaid obligations of the Borrower to repay such portion of
the Facility, the Borrower and the relevant Lender shall negotiate in good faith with a view to
agreeing on terms for making such portion of the Facility available from another jurisdiction or
otherwise restructuring such portion of the Facility on a basis which is not unlawful.



     11.2 Increased Costs. If any change in applicable law, regulation or regulatory
requirement, or in the interpretation or application thereof by any governmental or other
authority, shall:




	 	(i)	 	subject any Lender to any Taxes with respect to
its income from the Facility, or any part thereof, or
	 
	 	(ii)	 	change the basis of taxation to any Lender of
payments of principal or interest or any other payment due or to become
due pursuant to this Credit Facility Agreement (other than a change in
the basis effected by the jurisdiction of organization of such Lender,
the jurisdiction of the principal place of business of such Lender, the
United States of America, the State or City of New York or any
governmental subdivision or other taxing authority having jurisdiction
over such Lender (unless such jurisdiction is asserted by reason of the
activities of the Borrower or any of the other Security Parties) or such other
jurisdiction where the Facility may be payable), or
	 
	 	(iii)	 	impose, modify or deem applicable any reserve
requirements or require the making of any special deposits against or in
respect of any 




35









 






	 	 	 	assets or liabilities of, deposits with or for the account of, or loans by, a Lender, or






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





          and the result of the foregoing is either to increase the cost to such Lender of making
available or maintaining its Commitment or any part thereof or to reduce the amount of any payment
received by such Lender, then and in any such case if such increase or reduction in the opinion of
such Lender materially affects the interests of such Lender under or in connection with this Credit
Facility Agreement:



          (a) the Lender shall notify the Facility Agent and the Borrower of the happening of such
event, and



          (b) the Borrower agrees forthwith upon demand to pay to such Lender such amount as such Lender
certifies to be necessary to compensate such Lender for such additional cost or such reduction;
PROVIDED, however, that the foregoing provisions shall not be applicable in the event that
increased costs to the Lender result solely from the exercise by the Lender of its right to assign
its rights or obligations under Section 10.



     11.3 Replacement of Lender or Participant. If the obligtion of any Lender to make its
pro rata share of any Tranche has been suspended or terminated pursuant to Section 11.1, or if any
Lender shall notify the Borrowers of the happening of any event leading to increased costs as
described in Section 11.2, the Borrowers shall have the right, upon twenty (20) Banking Days’ prior
written notice to such Lender, to cause one or more banks (a “Replacement Lender(s)”) (which may be
one or more of the Lenders), each such Replacement Lender to be satisfactory to the Majority
Lenders (determined for this purpose as if such transferor Lender had no Commitment and held no
interest in the Note issued to it hereunder) and, in each case, with the written acknowledgment of
the Facility Agent, to purchase such Lender’s pro rata share of the Tranches and assume the
Commitment of such Lender pursuant to an Assignment and Assumption Agreement. If one or more such
banks are identified by the Borrowers and approved as being reasonably satisfactory to the Majority
Lenders (determined as provided above), the transferor Lender shall consent to such sale and
assumption by executing and delivering an Assignment and Assumption Agreement. Upon execution and
delivery of an Assignment and Assumption Agreement by the Borrowers, the transferor Lender, the
Replacement Lender and the Facility Agent, and payment by the Replacement Lender to the transferor
Lender of an amount equal to the purchase price agreed between such transferor Lender and such
Replacement Lender, such Replacement Lender shall become a Lender party to this Agreement (if it is
not already a party hereto as applicable) and shall have all the rights and obligations of a Lender
with a Commitment (which, if such Replacement Lender is already a party hereto, shall take into
account such Replacement Lender’s then existing Commitment hereunder) as set forth in such
Assignment and Assumption Agreement and the transferor Lender shall be released from its
obligations hereunder and no further consent or action by any other Person shall be required. In the event no
Replacement Lender is found or is satisfactory to the Majority Lenders, the Borrower shall have the
right to request a permanent reduction of the Facility by reducing the whole of such Lender’s
commitment, provided that (a) the Facility Agent and the Lender’s whose Commitment the Borrower
seeks to reduce receive ten (10) Banking Days prior written notice of such request and (b) such
reduction occurs on the last day of the applicable Interest Period(s) for Tranches (or portions
thereof) outstanding under this




36











 




Agreement. Upon such reduction, the reduced Lender shall be released from its obligations hereunder
and no further action by any Person shall be required and the new participation percentages (as
designated in Schedule 1 hereto) shall be assigned to the remaining Lenders on a pro rata basis
based on their respective Commitments. In the event that the Facility Agent, in its capacity as a
Lender, is required to sell its pro rata share of the Tranches and its Commitment hereunder
pursuant to this Section 11.3, the Facility Agent shall, promptly upon the consummation of any
assignment pursuant to this Section 11.3, resign as Facility Agent hereunder and the Borrowers
shall (subject to the consent of the Majority Lenders) have the right to appoint another Lender as
successor Facility Agent, all in accordance with Section 15.13.




     11.4 Nonavailability of Funds. If the Facility Agent shall determine that, by reason of
circumstances affecting the London Interbank Market generally, adequate and reasonable means do not
or will not exist for ascertaining the Applicable Rate for the Facility for any Interest Period,
the Facility Agent shall give notice of such determination to the Borrower. The Borrower, the
Facility Agent and the Majority Lenders shall then negotiate in good faith in order to agree upon a
mutually satisfactory interest rate and/or Interest Period to be substituted for those which would
otherwise have applied under this Credit Facility Agreement. If the Borrower, the Facility Agent
and the Majority Lenders are unable to agree upon such a substituted interest rate and/or Interest
Period within five (5) Banking Days of the giving of such determination notice, the Facility Agent
shall set an interest rate and Interest Period to take effect from the expiration of the Interest
Period in effect at the date of determination, which rate shall be equal to the Applicable Margin
plus the cost to the Lenders (as certified by each Lender) of funding the Facility. In the event
the state of affairs referred to in this Section 11.3 shall extend beyond the end of the Interest
Period, the foregoing procedure shall continue to apply until circumstances are such that the
Applicable Rate may be determined pursuant to Section 6.



     11.5 Lender’s Certificate Conclusive. A certificate or determination notice of any Lender
as to any of the matters referred to in this Section 11 shall, absent manifest error, bad faith or
misconduct, be conclusive and binding on the Borrower.



     11.6 Compensation for Losses. Where the Facility or any portion thereof is to be repaid by
the Borrower pursuant to this Section 11, the Borrower agrees simultaneously with such repayment to
pay to the relevant Lender all accrued interest to the date of actual payment on the amount repaid
and all other sums then payable by the Borrower to the relevant Lender pursuant to this Credit
Facility Agreement, together with such amounts as may be certified by the relevant Lender to be
necessary to compensate such Lender for any actual loss, premium or penalties incurred or to be
incurred thereby on account of funds borrowed to make, fund or maintain its Commitment or such
portion thereof for the remainder (if any) of the then current Interest Period or Interest Periods,
if any, but otherwise without penalty or premium.



12. CURRENCY INDEMNITY




     12.1 Currency Conversion. If for the purpose of obtaining or enforcing a judgment in any court in any country it becomes
necessary to convert into any other currency (the “judgment currency”) an amount due in Dollars
under this Credit Facility Agreement, the Note or any of the Security Documents then the conversion
shall be made, in the discretion of the Facility Agent, at the rate of exchange prevailing either
on the date of default or on the day before the day on which the judgment is given or the order for
enforcement is made, as the case may be (the “conversion date”), provided that the Facility Agent
shall not be entitled to recover under this section any



37









 







amount in the judgment currency which
exceeds at the conversion date the amount in Dollars due under this Credit Facility Agreement, the
Note, the Guaranty and/or any of the Security Documents.



     12.2 Change in Exchange Rate. If there is a change in the rate of exchange prevailing
between the conversion date and the date of actual payment of the amount due, the Borrower shall
pay such additional amounts (if any, but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the judgment currency when converted at the rate of exchange
prevailing on the date of payment will produce the amount then due under this Credit Facility
Agreement, the Note and/or any of the Security Documents in Dollars; any excess over the amount due
received or collected by the Lenders shall be remitted to the Borrower.



     12.3 Additional Debt Due. Any amount due from the Borrower under this Section 12 shall be
due as a separate debt and shall not be affected by judgment being obtained for any other sums due
under or in respect of this Credit Facility Agreement, the Note and/or any of the Security
Documents.



     12.4 Rate of Exchange. The term “rate of exchange” in this Section 12 means the rate at
which the Facility Agent in accordance with its normal practices is able on the relevant date to
purchase Dollars with the judgment currency and includes any premium and costs of exchange payable
in connection with such purchase.



13. FEES AND EXPENSES 




     13.1 Fees. During the period beginning on the date of this Credit Facility Agreement, the
Borrower shall pay, each month in arrears, to the Facility Agent (for the account of the Lenders),
a commitment fee (the “Commitment Fee”) of thirty-five one-hundredths of one percent (.35%) per
annum payable on the average undrawn amount of Tranche B. The Borrower shall also pay to the
Facility Agent an agency fee (the “Agency Fee”) equal to Fifteen Thousand Dollars ($15,000) per
annum, payable to the Administrative Agent upon the execution of the Credit Facility and on that
date every year thereafter.



     13.2 Expenses. The Borrower agrees, whether or not the transactions hereby contemplated
are consummated, on demand to pay, or reimburse the Agents for their payment of, the reasonable
expenses of the Agents and (after the occurrence and during the continuance of an Event of Default)
the Lenders incident to said transactions (and in connection with any supplements, amendments,
waivers or consents
relating thereto or incurred in connection with the enforcement or defense of any of the Agent’s
and the Lenders’ rights or remedies with respect thereto or in the preservation of the Agent’s and
the Lenders’ priorities under the documentation executed and delivered in connection therewith)
including, without limitation, all reasonable costs and expenses of preparation, negotiation,
execution and administration of this Credit Facility Agreement and the documents referred to
herein, the reasonable fees and disbursements of the Agent’s counsel in connection therewith, as
well as the reasonable fees and expenses of any independent appraisers, surveyors, engineers,
inspectors and other consultants retained by the Agents in connection with this Agreement and the
transactions contemplated hereby and under the Security Documents, all reasonable costs and
expenses, if any, in connection with the enforcement of this Credit Facility Agreement, the Note
and the Security Documents and stamp and other similar taxes, if any, incident to the execution and
delivery of the documents (including, without limitation, the Note) herein contemplated and to hold
the Agents and the Lenders free and harmless in connection with any liability arising from the
nonpayment of any such stamp or other similar taxes. Such taxes and, if any, interest and
penalties related thereto as may become payable after the date hereof shall be paid immediately by
the Borrower to the Agents or the Lenders, as the case may be,



38









 







when liability therefor is no longer
contested by such party or parties or reimbursed immediately by the Borrower to such party or
parties after payment thereof (if the Agents or the Lenders, at their sole discretion, chooses to
make such payment).



14. APPLICABLE LAW, JURISDICTION AND WAIVER




     14.1 Applicable Law. This Credit Facility Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.



     14.2 Jurisdiction. The Borrower hereby irrevocably submits to the jurisdiction of the
courts of the State of New York and of the United States District Court for the Southern District
of New York in any action or proceeding brought against it by any of the Lenders or the Agents
under this Credit Facility Agreement or under any document delivered hereunder and hereby
irrevocably agrees that valid service of summons or other legal process on it may be effected by
serving a copy of the summons and other legal process in any such action or proceeding on the
Borrower by mailing or delivering the same by hand to the Borrower at the address indicated for
notices in Section 16.1. The service, as herein provided, of such summons or other legal process
in any such action or proceeding shall be deemed personal service and accepted by the Borrower as
such, and shall be legal and binding upon the Borrower for all the purposes of any such action or
proceeding. Final judgment (a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of any indebtedness of the Borrower to the Lenders or the Agent)
against the Borrower in any such legal action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment. The Borrower will advise the Facility Agent
promptly of any change of address for the purpose of service of process. Notwithstanding anything
herein to the contrary, the Lenders may bring any legal action or proceeding in any other
appropriate jurisdiction.



     14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE OTHER
SECURITY PARTIES, THE AGENT AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY
OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE NOTE OR THE SECURITY DOCUMENTS.



15. THE AGENTS




     15.1 Appointment of Agents. Each of the Lenders irrevocably appoints and authorizes the
Agents severally each to take such action as agent on its behalf and to exercise such powers under
this Credit Facility Agreement, the Note and the Security Documents as are delegated to such Agent
by the terms hereof and thereof. No Agent nor any of their respective directors, officers,
employees or agents shall be liable for any action taken or omitted to be taken by it or them under
this Credit Facility Agreement, the Note or the Security Documents or in connection therewith,
except for its or their own gross negligence or willful misconduct.



     15.2 Security Trustee as Trustee. Each of the Lenders irrevocably appoints the Security
Trustee as trustee on its behalf with regard to (i) the security, powers, rights, titles, benefits
and interests (both present and future) constituted by and conferred on the Lenders or any of them
or for the benefit thereof under or pursuant to this Credit Facility Agreement, the Note or any of
the Security Documents (including, without limitation, the benefit of all covenants, undertakings,
representations, warranties and obligations given, made or undertaken to any Lender in the
Agreement, the Note or any Security Document), (ii) all moneys, property and other assets paid or



39









 







transferred to or vested in any Lender or any agent of any Lender or received or recovered by any
Lender or any agent of any Lender pursuant to, or in connection with, this Credit Facility
Agreement, the Note or the Security Documents whether from any Security Party or any other person
and (iii) all money, investments, property and other assets at any time representing or deriving
from any of the foregoing, including all interest, income and other sums at any time received or
receivable by any Lender or any agent of any Lender in respect of the same (or any part thereof).
The Security Trustee hereby accepts such appointment.



     15.3 Distribution of Payments. Whenever any payment is received by the Facility Agent from
the Borrower or any other Security Party for the account of the Lenders, or any of them, whether of
principal or interest on the Note, commissions, fees under Section 13 or otherwise, it will
thereafter cause to be distributed on the same day if received before 4:30 p.m. Rotterdam time, or
on the next day if received thereafter, like funds relating to such payment ratably to the Lenders
according to their respective Commitments, in each case to be applied according to the terms of
this Credit Facility Agreement. Unless the Facility Agent shall have received notice that the
Borrower is not making a timely payment of amounts due hereunder, the Administrative Agent and the
Facility Agent may, in reliance upon such assumption make available to the Lenders on such date
their pro rata share of a corresponding amount. If and to the extent that the
Borrower shall not have so made such payment to the Facility Agent, the Lenders and the Borrower
(but without duplication) severally agree to repay to the Administrative Agent forthwith on demand
such corresponding amount or their pro rata share thereof together with interest
thereon, for each day from the date such amount is made available until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the borrower, a rate per annum equal to
the higher of (y) the LIBOR rate for overnight or weekend deposits plus the Margin plus
three (3) percent and (z) the interest rate applicable thereto pursuant to Section 6.1 and (ii) in
the case of such Lender, the LIBOR rate for overnight or weekend deposits.



     15.4 Holder of Interest in Note. The Agents may treat each Lender as the holder of all of
the interest of such Lender in the Note.



     15.5 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or pass upon
the validity, effectiveness or genuineness of any of this Credit Facility Agreement, the Note, the
Security Documents or any instrument, document or communication furnished pursuant to this Credit
Facility Agreement or in connection therewith or in connection with the Note or any Security
Document, and the Agents shall be entitled to assume that the same are valid, effective and
genuine, have been signed or sent by the proper parties and are what they purport to be.



     15.6 Agents as Lenders. With respect to that portion of the Facility made available by it,
each Agent shall have the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not an Agent, and the term “Lender” or “Lenders” shall include each Agent in
its capacity as a Lender. Each Agent and its affiliates may accept deposits from, lend money to
and generally engage in any kind of business with, the Borrower and the other Security Parties as
if it were not an Agent.



     15.7 Acts of the Agents. Each Agent shall have duties and reasonable discretion, and shall
act as follows:




	 	(a)	 	Obligations of the Agents. The obligations of each Agent
under this Credit Facility Agreement, under the Note and under the Security
Documents are only those expressly set forth herein and therein.




40









 












	 	(b)	 	No Duty to Investigate. No Agent shall at any time be
under any duty to investigate whether an Event of Default, or an event which
with the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred or to investigate the performance of this Credit
Facility Agreement, the Note or any Security Document by any Security Party.
	 
	 	(c)	 	Discretion of the Agents. Each Agent shall be entitled
to use its discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, and with respect to taking or
refraining from taking any action or actions which it may be able to take under
or in respect of, this Credit Facility Agreement, the Note and the Security
Documents, unless the Facility Agent shall have been instructed by the Majority
Lenders to exercise such rights or to take or refrain from taking such action;
provided, however, that no Agent shall be required to take any action which
exposes such Agent to personal liability or which is contrary to this Credit
Facility Agreement or applicable law.
	 
	 	(d)	 	Instructions of Majority Lenders. Each Agent shall in
all cases be fully protected in acting or refraining from acting under this
Credit Facility
Agreement, under the Note, or under any Security Document in accordance with
the instructions of the Majority Lenders, and any action taken or failure to
act pursuant to such instructions shall be binding on all of the Lenders.





     15.8 Certain Amendments. Neither this Credit Facility Agreement the Note nor any of the
Security Documents nor any terms hereof or thereof may be amended unless such amendment is approved
by the Borrower and the Majority Lenders, provided that no such amendment shall, without the
written consent of each Lender affected thereby, (i) reduce the interest rate or extend the time
of a scheduled payment of principal or interest or fees on the Facility, or reduce the principal
amount of the Facility or any fees hereunder, (ii) increase or decrease the Commitment of any
Lender or subject any Lender to any additional obligation (it being understood that a waiver of any
Event of Default or any mandatory repayment of Facility shall not constitute a change in the terms
of any Commitment of any Lender), (iii) amend, modify or waive any provision of this Section 15.8,
(iv) amend the definition of Majority Lenders or any other definition referred to in this Section
15.8, (v) consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Credit Facility Agreement, (vi) release any Security Party from any of its
obligations under any Security Document except as expressly provided herein or in such Security
Document or (vii) amend any provision relating to the maintenance of collateral under Section 9.4;
provided further that approval by all Lenders shall be required for any amendment or waivers with
respect to Section 5.3 of this Credit Facility Agreement. All amendments approved by the Majority
Lenders under this Section 15.8 must be in writing and signed by the Borrower, each of the Lenders
comprising the Majority Lenders and, if applicable, each Lender affected thereby and any such
amendment shall be binding on all the Lenders, provided, however, that any amendments or waivers
with respect to Section 5.3 of this Credit Facility Agreement must be in writing and signed by the
Borrower and all of the Lenders.



     15.9 Assumption re Event of Default. Except as otherwise provided in Section 15.15, the
Facility Agent shall be entitled to assume that no Event of Default, or event which with the giving
of notice or lapse of time, or both, would constitute an Event of Default, has occurred and is
continuing, unless the Facility Agent has been notified by any Security Party of such fact, or has



41









 







been notified by a Lender that such Lender considers that an Event of Default or such an event
(specifying in detail the nature thereof) has occurred and is continuing. In the event that the
Facility Agent shall have been notified by any Security Party or any Lender in the manner set forth
in the preceding sentence of any Event of Default or of an event which with the giving of notice or
lapse of time, or both, would constitute an Event of Default, the Facility Agent shall notify the
Lenders and shall take action and assert such rights under this Credit Facility Agreement, under
the Note and under Security Documents as the Majority Lenders shall request in writing.



     15.10 Limitations of Liability. Neither any Agent nor any of the Lenders shall be under
any liability or responsibility whatsoever:




	 	(a)	 	to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or any breach by, any
other Lenders or any other person of any of its or their obligations under this
Credit Facility Agreement or under any Security Document;
	 
	 	(b)	 	to any Lender or Lenders as a consequence of any failure or delay
in performance by, or any breach by, any Security Party of any of its respective
obligations under this Credit Facility Agreement, under the Note or under the
Security Documents; or
	 
	 	(c)	 	to any Lender or Lenders for any statements, representations or
warranties contained in this Credit Facility Agreement, in any Security Document
or in any document or instrument delivered in connection with the transaction
hereby contemplated; or for the validity, effectiveness, enforceability or
sufficiency of this Credit Facility Agreement, the Note, any Security Document
or any document or instrument delivered in connection with the transactions
hereby contemplated.





     15.11 Indemnification of the Agents. The Lenders agree to indemnify each Agent (to the
extent not reimbursed by the Security Parties or any thereof), pro rata according to the respective
amounts of their Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including legal fees and expenses incurred in investigating claims and defending
itself against such liabilities) which may be imposed on, incurred by or asserted against, such
Agent in any way relating to or arising out of this Credit Facility Agreement, the Note or any
Security Document, any action taken or omitted by such Agent thereunder or the preparation,
administration, amendment or enforcement of, or waiver of any provision of, this Credit Facility
Agreement, the Note or any Security Document, except that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct.



     15.12 Consultation with Counsel. Each of the Facility Agent and the Security Trustee may
consult with legal counsel reasonably selected by such Agent and shall not be liable for any action
taken, permitted or omitted by it in good faith in accordance with the advice or opinion of such
counsel.



     15.13 Resignation. Any Agent may resign at any time by giving sixty (60) days’ written
notice thereof to the other Agents, the Lenders and the Borrower. Upon any such resignation, the
Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Lenders and shall have accepted such appointment within sixty (60) days after
the



42









 







retiring Agent’s giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank or trust company of recognized standing.
Any resignation by an Agent pursuant to this Section 15.13 shall be effective only upon the
appointment of a successor Agent. The appointment of any successor Agent shall be subject to the
prior written consent of the Borrower, such consent not to be unreasonably withheld. After any
retiring Agent’s resignation as Agent hereunder, the provisions of this Section 15 shall continue
in effect for its benefit with respect to any actions taken or omitted by it while acting as Agent.
Furthermore, the Facility Agent has a right during the initial twelve (12) month period from the
date of this Credit Facility Agreement to
transfer its role as Agent or Security Trustee to any other Lender, and any such transfer shall not
require the consent of the Borrower or any other Lender under this Credit Facility Agreement.



     15.14 Representations of Lenders. Each Lender represents and warrants to each other Lender
and each Agent that:




	 	(a)	 	in making its decision to enter into this Credit Facility
Agreement and to make its Commitment available hereunder, it has independently
taken whatever steps it considers necessary to evaluate the financial condition
and affairs of the Security Parties, that it has made an independent credit
judgment and that it has not relied upon any statement, representation or
warranty by any other Lender or any Agent; and
	 
	 	(b)	 	so long as any portion of its Commitment remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Security Parties.





     15.15 Notification of Event of Default. The Facility Agent hereby undertakes to promptly
notify the Lenders, and the Lenders hereby promptly undertake to notify the Facility Agent and the
other Lenders, of the existence of any Event of Default which shall have occurred and be continuing
of which the Facility Agent or Lender has actual knowledge.



16. NOTICES AND DEMANDS




     16.1 Notices. All notices, requests, demands and other communications to any party
hereunder shall be in writing (including prepaid overnight courier, facsimile transmission or
similar writing) and shall be given to the Borrower at the address or telecopy number set forth
below and to the Lenders and the Agents at their address and telecopy numbers set forth in Schedule
1 or at such other address or telecopy numbers as such party may hereafter specify for the purpose
by notice to each other party hereto. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and telephonic confirmation of receipt thereof is obtained or (ii) if
given by mail, prepaid overnight courier or any other means, when received at the address specified
in this Section or when delivery at such address is refused.


If to the Borrower:



c/o Rigdon Marine Corporation

815 Walker Street, Suite 750

Houston, Texas 77002




43









 







United States of America

Facsimile: (703)236-0200

Attention: Larry T. Rigdon




with a copy to:



Lugenbuhl, Burke, Wheaton, Peck, Rankin & Hubbard

601 Poydras Street, Suite 2775

New Orleans, LA 70130

United States of America

Facsimile: (504)529-7418

Attention: Stewart F. Peck




17. MISCELLANEOUS




     17.1 Time of Essence. Time is of the essence with respect to this Credit Facility
Agreement but no failure or delay on the part of any Lender or any Agent to exercise any power or
right under this Credit Facility Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise by any Lender or any Agent of any power or right hereunder preclude any other
or further exercise thereof or the exercise of any other power or right. The remedies provided
herein are cumulative and are not exclusive of any remedies provided by law.



     17.2 Unenforceable, etc., Provisions — Effect. In case any one or more of the provisions
contained in this Credit Facility Agreement, the Note or in any Security Document would, if given
effect, be invalid, illegal or unenforceable in any respect under any law applicable in any
relevant jurisdiction, said provision shall not be enforceable against the relevant Security Party,
but the validity, legality and enforceability of the remaining provisions herein or therein
contained shall not in any way be affected or impaired thereby.



     17.3 References. References herein to Sections, Exhibits and Schedules are to be construed
as references to sections of, exhibits to, and schedules to, this Credit Facility Agreement, unless
the context otherwise requires.



     17.4 Further Assurances. The Borrower agrees that if this Credit Facility Agreement or any
Security Document shall, in the reasonable opinion of the Lenders, at any time be deemed by the
Lenders for any reason insufficient in whole or in part to carry out the true intent and spirit
hereof or thereof, it will execute or cause to be executed such other and further assurances and
documents as in the opinion of the Lenders may be required in order to more effectively accomplish
the purposes of this Credit Facility Agreement, the Note or any Security Document.



     17.5 Prior Agreements, Merger. Any and all prior understandings and agreements heretofore
entered into between the Security Parties on the one part, and the Agents or the Lenders, on the
other part, whether written or oral, other than the Mandate Letter, are superseded by and merged
into this Credit Facility Agreement and the other agreements (the forms of which are exhibited
hereto) to be executed and delivered in connection herewith to which the Security Parties, the
Agents and/or the Lenders are parties, which alone fully and completely express the agreements
between the Security Parties, the Agents and the Lenders.



     17.6 Entire Agreement; Amendments. This Credit Facility Agreement constitutes the entire
agreement of the parties hereto including all parties added hereto pursuant to an Assignment and
Assumption Agreement. Subject to Section 15.8, any provision of this Credit Facility Agreement,
the Note or any Security Document may be amended or waived if, but only if, such



44









 







amendment or
waiver is in writing and is signed by the Borrower, the Agents and the Majority Lenders . This
Credit Facility Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts together shall constitute one and the same
instrument.



     17.7 Indemnification. The Borrower and, by its execution and delivery of the Consent and
Agreement set forth below, each of the other Security Parties jointly and severally agree to
indemnify each Lender and each Agent, their respective successors and assigns, and their respective
officers, directors, employees, representatives and agents (each an “Indemnitee”) from, and hold
each of them harmless against, any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel for such
Indemnitee in connection with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party thereto) that may at any
time (including, without limitation, at any time following the payment of the obligations of the
Borrower hereunder) be imposed on, asserted against or incurred by, any Indemnitee as a result of,
or arising out of or in any way related to or by reason of, (a) any violation by any Security Party
(or any charterer or other operator of any Vessel) of any applicable Environmental Law, (b) any
Environmental Claim arising out of the management, use, control, ownership or operation of property
or assets by any Security Party (or, after foreclosure, by any Lender or any Agent or any of their
respective successors or assigns), (c) the breach of any representation, warranty or covenant set
forth in Sections 2.1 (o) or 9.1(j), (d) the Facility (including the use of the proceeds of the
Facility and any claim made for any brokerage commission, fee or compensation from any Person), of
(e) the execution, delivery, performance or non-performance of this Credit Facility Agreement, the
Note, any Security Document, or any of the documents referred to herein or contemplated hereby
(whether or not the Indemnitee is a party thereto). If and to the extent that the obligations of
the Security Parties under this Section are unenforceable for any reason, the Borrower and, by its
execution and delivery of the Consent and Agreement set forth below, each of the other Security
Parties jointly and severally agree to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law. The obligations of the
Security Parties under this Section 17.7 shall survive the termination of this Credit Facility
Agreement and the repayment to the Lenders of all amounts owing thereto under or in connection
herewith.



     17.8 Headings. In this Credit Facility Agreement, Section headings are inserted for
convenience of reference only and shall not be taken into account in the interpretation of this
Credit Facility Agreement.



     17.9 Customer Identification. USA Patriot Act Notice; OFAC and Bank Secrecy Act. The
Agent hereby notifies the Borrower and each other Security Party that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”),
and the Agent’s policies and
practices, the Agent and each of the Lenders is required to obtain, verify and record certain
information and documentation that identifies each Security Party, which information includes the
name and address of each Security Party and such other information that will allow the Agent and
the Lenders to identify each Security Party in accordance with the Act. In addition, each Security
Party shall (a) ensure that no Person who owns a controlling interest in or otherwise controls any
Security Party or any subsidiary of any thereof is or shall be listed on the Specially Designated
Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets
Control (“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use
or permit the use of the proceeds of the Facility to violate any of the



45









 







foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto, and (c) comply,
and cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act laws and
regulations, as amended.



[Remainder of Page Intentionally Left Blank]




46









 








          IN WITNESS whereof the parties hereto have caused this Credit Facility Agreement to be duly
executed by their duly authorized representatives as of the day and year first above written.




	 	 	 	 	 
	 	RIGDON MARINE CORPORATION

 	 
	 	By:  	/s/
Larry T. Rigdon 	 
	 	 	Name:  	Larry T. Rigdon 	 
	 	 	Title:  	Chairman 	 
	 
	 	DVB BANK NV,

as Facility Agent and Security Trustee

 	 
	 	By:  	/s/
Cornelis Overgaauw 	 
	 	 	Name:  	Cornelis Overgaauw 	 
	 	 	Title:  	S.V.P. 	 
	 
	 	 	 
	 	By:  	
/s/ Evan Cohen	 
	 	 	Name:  	Evan Cohen 	 
	 	 	Title:  	S.V.P. 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	The Lenders:



DVB BANK NV,

 	 
	 	By:  	/s/
Cornelis Overgaauw 	 
	 	 	Name:  	Cornelis Overgaauw 	 
	 	 	Title:  	S.V.P. 	 
	 
	 	 	 
	 	By:  	
/s/ Evan Cohen 	 
	 	 	Name:  	Evan Cohen 	 
	 	 	Title:  	S.V.P. 	 



2









 






	 	 	 	 	 



Schedule 1




	 	 	 	 	 
	Lenders	 	Commitment
	 
	 	 	 	 
	DVB BANK NV

	 	$	170,000,000	 
	Parklaan 2
	 	 	 	 
	3016 BB Rotterdam
	 	 	 	 
	The Netherlands
	 	 	 	 
	Attn:
	 	 	 	 
	Facsimile No.:
	 	 	 	 
	Telephone No.:
	 	 	 	 







 









 








Schedule 2




Vessels




A. Pre-existing Vessels




	 	 	 	 	 	 	 	 	 
	Vessel Name	 	Official Number	 	Registry/Flag	 	Classification Society
	ORLEANS

	 	1151394	 	 	 	United States
	 	American Bureau of
Shipping (“ABS”)
	BOURBON

	 	1156133	 	 	 	United States
	 	ABS
	ROYAL

	 	1159200	 	 	 	United States
	 	ABS
	CHARTRES

	 	1160318	 	 	 	United States
	 	ABS
	IBERVILLE

	 	1163367	 	 	 	United States
	 	ABS
	BIENVILLE

	 	1163970	 	 	 	United States
	 	ABS
	CONTI

	 	1166313	 	 	 	United States
	 	ABS
	ST. LOUIS

	 	1167668	 	 	 	United States
	 	ABS
	TOULOUSE

	 	1169977	 	 	 	United States
	 	ABS
	ESPLANADE

	 	1173548	 	 	 	United States
	 	ABS






B. GPA 654 Vessels




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Builder	 	Hull Number	 	To be registered under Registry/Flag of	 	Classification Society
	Bollinger Shipyards
Lockport, LLC
(“Bollinger”)

	 	521	 	 	 	United States
	 	ABS
	Bollinger

	 	522	 	 	 	United States
	 	ABS
	Bollinger

	 	523	 	 	 	United States
	 	ABS
	Bollinger

	 	524	 	 	 	United States
	 	ABS






2









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 		 	
	Builder	 	Hull Number	 	To be registered under Registry/Flag of	 	Classification Society
	Bollinger

	 	525	 	 	 	United States
	 	ABS
	Bollinger

	 	526	 	 	 	United States
	 	ABS
	Bollinger

	 	527	 	 	 	United States
	 	ABS
	Bollinger

	 	528	 	 	 	United States
	 	ABS
	Bollinger

	 	529	 	 	 	United States
	 	ABS
	Bollinger

	 	530	 	 	 	United States
	 	ABS






3









 






Schedule 3




Disclosure




Liens:




Debt:




4









 





Schedule 4




Approved Ship Brokers




Clarksons (Research Division)

St. Magnus House,

3 Lower Thames Street

London EC3R 6HE

United Kingdom




Derrick Offshore

Mount View House

10 The Mount

Guildford, Surrey GU2 4HN

United Kingdom




E.A. Gibson Shipbrokers

P.O. Box 278

Audrey House

16-20 Ely Place

London EC1P 1HP

United Kingdom




Fernley Offshore Supply AS

Grev Wedels pl. 9

P.O. Box 1158 Senturm

N-0107 OSL

Oslo

Norway




Marcon International

P.O. Box 1170

9 NW Front Street

Coupeville, WA 98239-1170

United States




R.S. Platou Offshore A.S.

Haakon VII’s gate 10

P.O. Box 1604 Vika

N-0119 Olso

Norway




ODS-Petrodata Consulting & Research

(Acquired Bassoe Offshore Consultants in 2002)

3200 Wilcrest Drive

Houston, Texas 77042




Rivers & Gulf Marine Surveyors

3250 9th Street

Harvey, Louisiana 70058

United States





5