Document:

Exhibit 10.8

 

	
   

  	
  Norwegian Shipbrokers’ Association’s Memo-

  
	
   

  	
  randum of Agreement for sale and purchase of 

  
	
  MEMORANDUM OF AGREEMENT

  	
  ships.  Adopted by
  the Baltic and International 

  
	
   

  	
  Maritime Council (BIMCO) in 1956.               

  
	
   

  	
  Code-name                           

  
	
   

  	
  SALEFORM
  1993                     

  
	
   

  	
  Revised 1966, 1983 and 1986/87.                    

  

 

Dated:

 hereinafter called the Sellers, have agreed to
sell, and

hereinafter called the Buyers, have agreed to buy

Name:

Classification Society/Class:

	
  Built:

  	
  By:

  
	
   

  	
   

  
	
  Flag:

  	
  Place of
  Registration:

  
	
   

  	
   

  
	
  Call Sign:

  	
  Grt/Nrt:

  

 

Register Number:

hereinafter called the
Vessel, on the following terms and conditions:

The Seller shall provide a copy of each of the
following documents to the Buyer for their reference and pre-registration
purposes latest on signing this agreement:

	
  (i)

  	
   

  	
  Certificate of
  Registry

  
	
  (ii)

  	
   

  	
  Ships radio
  station license

  
	
  (iii)

  	
   

  	
  International
  tonnage certificate

  
	
  (iv)

  	
   

  	
  Certificate of
  Classification

  
	
  (v)

  	
   

  	
  International
  load line certificates

  
	
  (vi)

  	
   

  	
  International
  Oil Pollution Prevention Certificate (including attachment)

  
	
  (vii)

  	
   

  	
  Safety
  Construction/ Safety Radio / Safety Equipment Certificates (including
  attachments)

  
	
  (viii)

  	
   

  	
  Transcript
  of Registry

  

 

Definitions

Banking days are defined as days when commercial banks
are open for business in London and New York.

“In writing” or “written” means a letter handed over
from the Sellers to the Buyers or vice versa, a registered letter, telex,
telefax or other modern form of written communication.

“Classification Society” or “Class” means the Society
referred to in line 4.

1.                                      Purchase Price USD

 

 

2.                                      Deposit

As security for the correct fulfilment of this
Agreement the Buyers shall pay a deposit of 10% (ten per cent) of the Purchase
Money (Hereinafter called ‘the Deposit’) in an interest bearing joint account in
               
Bank,                
Branch,                
in the joint names of the Buyer and the Seller within three (3) banking days
after this Agreement has been signed by both parties by facsimile.

The Buyer will sign this Agreement latest one (1)
banking day after they receive the Agreement duly signed by the Seller.

Interest earned on the Deposit to be for the Buyer’s
account.  Any fee charged to open, hold
and/or lifting the said Deposit and the Balance Money shall be shared equally
between the Seller and the Buyer.

3.                                      Payment

The Buyer shall pay the balance ninety (90) per cent
of the Purchase Money (Hereinafter called ‘the Balance Money’) and any other
charges/money whatsoever to be paid by the Buyer to the Seller under this
Agreement (Hereinafter called ‘the Charges’) on delivery of the Vessel, but not
later than three (3) banking days after the Vessel is in every respect
physically ready for delivery in accordance with Clause 5 hereof.

The Deposit, Balance Money and the Charges shall be
released to the Seller against and upon the Seller’s presentation of the
Original copy of the ‘Protocol of Delivery and Acceptance’ duly signed by both
the Seller’s and the Buyer’s duly authorized representatives attending the
financial closing which is to be taking place in                .

At the time of the closing the Seller and the Buyer
will execute and deliver to                
Bank ,                 Branch (“               
Bank”) joint Instructions authorizing the payment of the ten percent deposit to
the account of the Seller, and any accrued interest to the account of the
Buyer, and such other documents reasonably required by                
Bank, (Note:  Buyer’s Corporate authority
and power of attorney to include authorization to sign such written
Instruction.)

4.                                      Inspections

The Buyers have inspected and accepted
the Vessel’s classification records.  The
Buyers have [waived inspection of] [also inspected] the Vessel at/ in                 on                , 200_

and have accepted the Vessel following this inspection and the sale is outright
and definite, subject only to the terms and conditions of this Agreement.

5.                                      Notices, time and place of delivery

a)                                      The Sellers shall keep
the Buyers well informed of the Vessel’s itinerary and shall provide the Buyers
with                , 30, 20, 15, 5, 3 days
approximate prior (as applicable)  notice
of the delivery date and place and 24 hours definite prior notice of the
delivery place and readiness for delivery. 
When the Vessel is at the place of delivery and

 

2

 

                                                in every respect
physically ready for delivery in accordance with this Agreement, the Sellers
shall give the Buyers a writte Notice of Readiness for delivery.

b)                                     The Vessel shall be
delivered charter free, free of cargo and safely afloat at                 between                 and                 200   in
Sellers option with 2400 hours local time                  200   cancelling date in Buyer’s
option, hereinafter called the ‘Canceling Date.’  It is understood that one further laden
voyage will be performed after current laden voyage.

Date of canceling (see Clauses 5 c), 6b)(iii)
and 14):

In the event that Notice of Readiness for delivery of
the Vessel has not been tendered by the Seller to the Buyer in writing by
e-mail or facsimile within the Canceling Date or in the event that the Seller
notifies the Buyer in writing by e-mail or facsimile (with reasons) prior to
the Canceling Date that the Vessel will not be ready for delivery within the
Canceling Date and at the same time advising a new Canceling Date, then the
Buyer shall have the option to maintain or cancel this Agreement within three
(3) banking days of the Seller’s notification that the Vessel will not be ready
for delivery within the Canceling Date.

In the event that the Buyer elects to cancel this
Agreement, then the Deposit, together with accrued Interest, shall be released
to the Buyer’s nominated bank within three (3) banking days and this Agreement
shall be declared null and void.

In the event that the Buyer elects to maintain this
Agreement, then the Seller shall deliver the vessel to the Buyer within the new
Canceling Date, and otherwise In all other respects in accordance with the
terms and conditions of this Agreement.

If this Agreement is maintained with
the new cancelling date all other terms and conditions hereof including those
contained in Clauses 5 a) and 5 c) shall remain unaltered and in
full force and effect.  Cancellation or
failure to cancel shall be entirely without prejudice to any claim for damages
the Buyers may have under Clause 14 for the Vessel not being ready by
the original cancelling date.

c)                                      Should the Vessel become
an actual, constructive or compromised total loss before delivery the deposit
together with interest earned shall be released immediately to the Buyers
whereafter this Agreement shall be null and void.

6.                                      Drydocking/Divers Inspection

a)**                        (i)            The Vessel shall be delivered
without drydocking.  However, the Buyers shall
have the right at their expense to arrange for an underwater inspection by a
diver approved by the Classification Society in the port of delivery prior to
the delivery of the Vessel.  The Sellers
shall at their cost make the Vessel available for such inspection.  The extent of the inspection and the
conditions under which it is performed shall be to the satisfaction of the
Classification Society.  If the
conditions at the port of delivery are unsuitable for such inspection, the
Sellers shall make the Vessel available at a suitable alternative place.

 

3

 

(ii)           If
the rudder, propeller, bottom or other underwater parts are found to be broken,
damaged or defective so as to affect the Vessel’s class, but the Class surveyor
approves that the Vessel may continue to trade until her next dry-docking with
the recommendation(s) relating to such damage, then the Seller and Buyer shall
agree a cash compensation, the amount of which shall:

a.             Be
deducted by the Buyer at the time of making payment of the Balance Money; and

b.             Be
arrived at by averaging two quotations obtained from first class repair yards
located near the place of delivery, one each by the Buyer and the Seller
including the cost of procuring such necessary spare parts and forwarding
charges as will be required to carry out the repairs and to be inclusive of
extra dock time and such related costs as would be charged by the repair yard,
but shall not include the cost of entering and departing the dry-dock and any
other maintenance cost which shall be for the Buyer’s account; or

(iii)          If
the rudder, propeller, bottom or other underwater parts are found to be broken,
damaged or defective so as to affect the Vessel’s class, and the Class surveyor
require that the damage shall be repaired immediately, then the Vessel shall be
dry-docked by the Seller and such defects shall be made good by the Seller at
their expense to the satisfaction of the Classification Society without
condition/ recommendation.  In such
event, the Seller shall pay for the cost of the underwater inspection and the
Classification Society’s attendance in full.

Once sub-clause (ii), or (iii), as appropriate, has
come into effect and either cash compensation has been agreed or repairs has
been completed, as appropriate, the Seller shall deliver the Vessel as per
Clause 5.  In such event, the canceling
date provided for in Clause 5 shall be extended by the additional time required
for the dry-docking and extra steaming, but limited to a maximum of sixty (60)
running days.  The Class surveyor’s
decisions under this clause 6 a) shall be considered final.

b)                                     If the Vessel is
dry-docked pursuant to sub-clause (b) above;

(i)            The
Classification Society may require survey of the tail-shaft system, the extent
of the survey being to the satisfaction of the Classification Society.  If such survey is not required by the
Classification Society, the Buyer shall have the right to require the
tail-shaft to be drawn and surveyed by the Classification Society, the extent
of the survey being in accordance with the Classification Society’s rules for
tail-shaft survey and consistent with the current stage of the Vessel’s survey
cycle.  The Buyer shall declare whether
they require the tall-shaft to be drawn and surveyed not later than by the
completion of the inspection by the Classification Society.  The Seller shall arrange the drawing and
refitting of the tail shaft.  Should any
parts of the tail shaft system be condemned or found defective so as to affect
the Vessel’s class, those parts shall be renewed or made good at the Sellers’
expense to the satisfaction of the Classification Society without condition/recommendation.

 

4

 

(ii)           The
expenses relating to the survey of the tail-shaft system shall be borne by the
Buyer unless the Classification Society requires such survey to be carried out,
in which case, the Seller shall pay these expenses.  The Seller shall also pay the expenses if the
Buyer requires the survey and parts of the system are condemned or found
defective or broken so as to affect the Vessel’s class.

(iii)          The
expenses in connection with putting the Vessel in and taking her out of
dry-dock, including the dry-dock dues and the Classification Society’s fees
shall be paid by the Seller if the Classification issues any condition/ recommendation
as a result of the survey or If it requires surv of the tail-shaft system. In
all other cases, the Buyer shall pay the aforesaid expenses, dues and fees.

(iv)          The
Buyer’s representatives shall have the right to be present in the dry-dock, but
without interfering with the work or decisions of the Classification surveyor.

(v)           The
Buyer shall have the right to have the underwater parts of the Vessel cleaned
and painted at their risk and expense without Interfering with the Seller’s or
the Classification surveyor’s work, if any, and without affecting the Vessel’s
timely delivery.

If, however, the Buyer’s work in dry-dock is still in
progress when the Seller has completed the work that the Seller is required to
do, the additional docking time needed to complete the Buyer’s work shall be
for the Buyer’s risk and expense.  In the
event that the Buyer’s work requires such additional time, the Seller may upon
completion of the Seller’s work tender Notice of Readiness for delivery whilst
the Vessel is still in dry-dock and the Buyer shall be obliged to take delivery
in accordance with Clause 3, whether the Vessel is in dry-dock or not and
irrespective of Clause 5 a).

*                                         Notes, if any, in the surveyor’s
report which are accepted by the Classification Society without
condition/recommendation are not to be taken into account.

7.                                      Spares/bunkers, etc.

The Vessel shall be delivered with everything
belonging to her [as of the date of this contract] [as when inspected] whether
on board, on shore, and on order; broached and un-broached stores, provisions,
spare parts and equipment; all radio installation including but not limiting to
wireless equipment / VHF / Sat-corn; all navigational equipment including
but not limiting to loading computer and software and all PC’s but including
scanners, printers and keyboards and one spare anchor [and one spare propellor]
aboard.  There is no spare tail shaft [or
propellor included].

Inventory list for main spares, equipment and stores
on board, ashore and on order shall be provided by the Seller to the Buyer
latest one (1) week after both parties have executed this Agreement.

The Sellers have
the right to take ashore crockery, plates, cutlery, linen and other articles
bearing the Sellers’ flag or name, provided they replace same with similar
unmarked items.  Library, forms, etc.,
exclusively for use in the Sellers’ vessel(s), shall be excluded without
compensation.  Captain’s, Officers’ and
Crew’s personal belongings including the slop chest are to be excluded

 

5

 

from the sale, as well as the following additional
items (including items on hire):  All acetylene, Argon, Freon and Oxygen bottles and the vessels Main
Server computer.

The Buyer shall take over remaining bunkers and
un-broached lubricating oils in sealed drums (hereinafter “bunkers”) and pay
the Seller for the bunkers at the Seller’s net acquisition cost (excluding
barging expenses) as documented and supported by copies of original invoices.  The Seller shall forward copies of bunker
invoices to the Buyer as soon as possible, latest one (1) week prior to the
expected delivery date.

Payment under this Clause shall be made at the same
time and place and in the same currency as the Purchase Price.

8.                                      Documentation

The delivery documents from the Seller herein listed
shall be made in favor of the Buyers and executed and delivered at the closing
[held at                ].

1)             Bill of Sale in form and substance
acceptable by the                
Register of Ships in four original counterparts executed by the Sellers duly
authorized representative, stating that the Vessel is free of all charters,
encumbrances, mortgages, maritime liens, taxes, claims and debts whatsoever.  A copy of the Vessel’s Certificate of Registry
will be attached to the Bill of Sale.

Sellers will provide a draft unsigned copy of the bill
of sale in advance marked for registration purpose only.

The sellers Power of Attorney and the Bill of Sale to
be signed by an attorney and thereafter legalised in a a manner acceptable to
the                
Register of Ships.

Note:  If the
Vessel will be not registered in either                
or                
the Seller will deliver a Bill of Sale in form and substance acceptable to flag
state where the Vessel will be registered.

2)             Notarized Sellers Board of Managers’
resolution authorizing the sale and transfer of the Vessel to the Buyers
pursuant to the MOA.

3)             A Certificate of Ownership and Encumbrance
of the Vessel issued by the                
government to be dated no more than one working day prior to the delivery
confirming that the Vessel is free from registered mortgages, registered
encumbrances and registered maritime liens.

4)             Certificate of Permission of Sale
issued by the                
Government dated not earlier than ten working days prior to the date of
delivery.

5)             A good standing certificate of the
Seller Issued by the                
Companies Registrar and dated not earlier than three working days prior to the
date of delivery.

6)             Class Maintenance Certificate in one original that shall
be dated not earlier than one working day prior to the date of delivery
confirming the Vessel’s class is maintained without condition/recommendation.  If ABS in Houston Texas cannot arrange to
have an original Class Maintenance Certificate dated one day prior to the
closing available in                ,
the Buyer will

 

6

 

accept a
facsimile of the same satisfactory to the Bureau of Maritime Affairs to be
followed by the original provided by ASS to the Bureau of Maritime Affairs.

7)             Letter from the Seller dated the
date of delivery confirming that the Vessel is not blacklisted by any nation or
organization.

8)             A letter of confirmation from the
Seller dated the date of delivery confirming that the Vessel has not touched
bottom or suffered any underwater damages so as to affect her Class since the
Vessel underwent her last dry-docking until delivery.

9)             Commercial invoice in two originals
relating to the purchase and containing a description of the Vessel and
Purchase Price.

10)           Commercial invoice in two originals
relating to the quantities and unit cost of remaining unused lubricating oils.

11)           Protocol of Delivery and Acceptance

All above documents not in English are required to
have attached a certified English translation.

Photocopies of above documents as executed or in final
draft form to be furnished to the Buyers 14 working days in advance of the
Vessel’s delivery.

The delivery documents from the Buyer herein listed
shall be made in favor of the Seller and executed and delivered at closing.  Note:  Buyer’s documents need not be authenticated by
Apostille if they are signed in the United States of America.

1)             Notarized
Buyers’ Board of Directors resolution authorizing the purchase and acceptance
of the Vessel from the Sellers pursuant to the MOA authenticated by Apostille

2)             Notarized
Power of Attorney issued by the Buyer authorizing their named representative(s)
to effect the purchase and acceptance of the Vessel from the Seller pursuant to
the MOA authenticated by Apostille

At the time of delivery, the Seller shall supply the
Buyer with all drawings, manuals, log books, manufacturer’s certificates, test
certificates, instructions books, etc. that apply to the vessel and all her
machinery and equipment including all original plans in the Seller’s possession
on board and ashore including the stability booklet and the loading manuals.

All other technical documentation (Hereinafter
collectively referred to as “Documents”), of the Vessel in the Seller’s
possession shall be forwarded to the Buyer not later than five (5) working days
after the Vessel’s delivery date under this Agreement.

The cost of forwarding
the Documents is for the Buyer’s account.  The cost of duplicating all or part of the
Documents, should Seller require retaining part or all of it after the
delivery, is for the Seller’s account.

 

7

 

9.                                      Encumbrances

The Sellers warrant that the Vessel, at the time of
delivery, is free from all charters, encumbrances, mortgages and maritime
liens, claims, taxes or any other debts whatsoever.  The Sellers hereby undertake

To indemnify the Buyers against all consequences of
claims made against the Vessel which have been incurred prior to the time of
delivery.

10.                               Taxes, etc.

Any taxes, fees and expenses in connection with the
purchase and registration under the Buyers’ flag shall be for the Buyers’
account, whereas similar charges in connection with the closing of the Sellers’
register shall be for the Sellers’ account.

11.                               Condition on delivery

The vessel with everything belonging to her shall be
at the Seller’s risk and expense until she is delivered to the Buyer, but
subject to the terms and conditions of this Agreement she shall be delivered
and taken over in substantially the same condition as when inspected with all
machinery and equipment normal wear and tear not affecting class excepted, with
the class fully maintained, free of average damage affecting her class and free
of recommendations and conditions by class except as mentioned below with all
her classification, national, statutory and international certificates clean
and valid at the time of delivery, with continuous survey cycles clean and up
to date at the time of delivery including month of delivery.  [The Buyers accept that the vessel will be
delivered with condition of Class #020 High overhead discharge line].

The Seller shall leave all original classification,
national, statutory and international certificates on board at the time of
physical delivery unless these certificates are statutorily required to be
returned to the relevant authority in which case the Seller are obliged to take
copies and leave behind these copies of the certificates in question on board.  The Buyer also has the right to take copies of
the logbooks.

“Inspection” in this Clause 11, shall mean the Buyers’
inspection according to Clause 4 a) or 4 b), if applicable,
or the Buyers’ inspection prior to the signing of this Agreement.  If the Vessel is taken over without
inspection, the date of this Agreement shall be the relevant date.

12.                               Name/markings

Upon delivery the Buyers undertake to change the name
of the Vessel and alter funnel markings.

13.                               Buyer’s default

Should the deposit
not be paid in accordance with Clause 2, the Sellers have the right to
cancel this Agreement, and they shall be entitled to claim compensation for
their losses and for all expenses incurred together with interest.

 

8

 

Should the Purchase Price not be paid in accordance
with Clause 3, the Sellers have the right to cancel the Agreement, in
which case the deposit together with interest earned shall be released to the
Sellers.  If the deposit does not cover
their loss, the Sellers shall be entitled to claim further compensation for
their losses and for all expenses incurred together with interest.

14.                               Sellers’ default

Should the Sellers fail to give Notice of Readiness in
accordance with Clause 5 a) or fail to be ready to validly complete a
legal transfer by the date stipulated in line 61 the Buyers shall have
the option of cancelling this Agreement provided always that the Sellers shall
be granted a maximum of 3 banking days after Notice of Readiness has been given
to make arrangements for the documentation set out in Clause 8.  If after Notice of Readiness has been given
but before the Buyers have taken delivery, the Vessel ceases to be physically
ready for delivery and is not made physically ready again in every respect by
the date stipulated in line 61 and new Notice of Readiness given, the
Buyers shall retain their option to cancel.  In the event that the Buyers elect  to cancel this Agreement the deposit together
with interest earned shall be released to them immediately.

Should the Sellers fail to give Notice of Readiness by
the date stipulated in line 61 or fail to be ready to validly complete a
legal transfer as aforesaid they shall make due compensation to the Buyers for
their loss and for all expenses together with interest if their failure is due
to proven negligence and whether or not the Buyers cancels this Agreement.

15.                               Buyers’ representatives

Once this Agreement has been signed and the Deposit has
been lodged, the Buyer have the right to place up to three representatives on
board the Vessel at any time from the earliest possible opportunity from
signing of MOA up until time of delivery for the purpose of familiarization
only and without interference with the operation of the Vessel.  If needed, reps are to be added to crew list
to avoid time consuming visas if this can be arranged.  However, for US ports visa is a problem as
cannot leave the reps and will need guards.  Third rep only to be permitted if the vessel
can accommodate 3 persons with facilities and meet its Safety Certificate
requirements.

The Buyer’s representatives shall be free to remain on
board the Vessel up to and including the delivery.

The Buyers’ representatives are to sign the Seller’s
usual P+I Letter of Indemnity, a copy of which is provided as per Exhibit I to
this Agreement.

The Buyer’s
representatives shall be allowed to conduct inventories with the assistance of
Seller’s crew prior to the delivery and shall be allowed access to all the
machineries and equipment of the vessel as well as access to all cargo tanks
and ballast tanks, as and when available, and shall be given free access to
communicate with the Buyer’s manager using the Vessel’s normal communication
equipment, the direct cost of usage of which shall be reimbursed by the Buyer
to the Seller at the time of delivery against receipt of Statement of Usage.

 

9

 

16.                               Arbitration

Arbitration in London with the latest version of LMAA
rules to apply including the Small Claims Proceedure clause.  English Law to Govern this agreement.

 

 

	
  END OF
  MOA

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  For the Sellers

  	
   

  	
  For the Buyers

  	
   

  
	
  By:

  	
   

  	
  By:

  	
   

  

 

10Exhibit 10.9

 

 

$800,000,000

CREDIT AGREEMENT

 

among

 

GENERAL
MARITIME CORPORATION, 

 

VARIOUS
LENDERS

 

and

 

NORDEA BANK
FINLAND PLC, NEW YORK BRANCH,

 

as
Administrative Agent and Collateral Agent

 

 

Dated as of
October 26, 2005

 

 

NORDEA BANK
FINLAND PLC, NEW YORK BRANCH,

 

HSH
NORDBANK AG,

 

and

 

DNB NOR
BANK ASA, NEW YORK BRANCH

 

 

as Joint
Lead Arrangers and Joint Book Runners

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.  Amount and Terms of Credit Facility

  	
   

  	 

	 
	
   

  	
   

  
	 
	
  1.01  The Commitments

  	
   

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

  	
   

  
	 
	
  1.03  Notice of Borrowing

  	
   

  
	 
	
  1.04  Disbursement of Funds

  	
   

  
	 
	
  1.05  Notes

  	
   

  
	 
	
  1.06  Pro Rata Borrowings

  	
   

  
	 
	
  1.07  Interest

  	
   

  
	 
	
  1.08  Interest Periods

  	
   

  
	 
	
  1.09  Increased Costs, Illegality, etc.

  	
   

  
	 
	
  1.10  Compensation

  	
   

  
	 
	
  1.11  Change of Lending Office

  	
   

  
	 
	
  1.12  Replacement of Lenders

  	
   

  
	 
	
  1.13  Vessel Exchanges

  	
   

  
	 
	
   

  	
   

  
	 
	
  SECTION 2.  Letters of Credit

  	
   

  
	 
	
   

  	
   

  
	 
	
  2.01  Letters of Credit

  	
   

  
	 
	
  2.02  Letter of Credit Requests; Minimum Stated
  Amount

  	
   

  
	 
	
  2.03  Letter of Credit Participations

  	
   

  
	 
	
  2.04  Agreement to Repay Letter of Credit
  Drawings

  	
   

  
	 
	
  2.05  Increased Costs

  	
   

  
	 
	
   

  	
   

  
	 
	
  SECTION 3.  Commitment Commission; Fees; Reductions of
  Commitment

  	
   

  
	 
	
   

  	
   

  
	 
	
  3.01  Commitment Commission

  	
   

  
	 
	
  3.02  Voluntary Termination of Unutilized
  Commitments

  	
   

  
	 
	
  3.03  Mandatory Reduction of Commitments

  	
   

  
	 
	
   

  	
   

  
	 
	
  SECTION 4.  Prepayments; Payments; Taxes

  	
   

  
	 
	
   

  	
   

  
	 
	
  4.01  Voluntary Prepayments

  	
   

  
	 
	
  4.02  Mandatory Repayments and Commitment
  Reductions

  	
   

  
	 
	
  4.03  Method and Place of Payment

  	
   

  
	 
	
  4.04  Net Payments; Taxes

  	
   

  
	 
	
   

  	
   

  
	 
	
  SECTION 5.  Conditions Precedent to the Initial
  Borrowing Date

  	
   

  
	 
	
   

  	
   

  
	 
	
  5.01  Effective Date; Notes

  	
   

  
	 
	
  5.02  Fees, etc.

  	
   

  
	 
	
  5.03 
  Opinions of Counsel

  	
   

  
	 
	
  5.04  Corporate Documents; Proceedings; etc

  	
   

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

  	
   

  
	 
	
  5.06  Subsidiaries Guaranty

  	
   

  
				

 

 

	
  5.07  Pledge and Security Agreement

  	
   

  
	
  5.08  Solvency Certificate

  	
   

  
	
  5.09  Financial Statements

  	
   

  
	
  5.10  Material Adverse Change; Approvals

  	
   

  
	
  5.11  Litigation

  	
   

  
	
  5.12  Appraisals

  	
   

  
	
  5.13  Refinancing

  	
   

  
	
  5.14  Assignments of Earnings and Insurances

  	
   

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

  	
   

  
	
  5.16  Environmental Laws

  	
   

  
	
  5.17  Assignment of the Refund Guarantees

  	
   

  
	
   

  	
   

  
	
  SECTION 6.  Conditions Precedent to All Credit Events

  	
   

  
	
   

  	
   

  
	
  6.01  No Default; Representations and Warranties

  	
   

  
	
  6.02  Notice of Borrowing

  	
   

  
	
   

  	
   

  
	
  SECTION 7.  Representations, Warranties and Agreements

  	
   

  
	
   

  	
   

  
	
  7.01  Corporate/Limited Liability Company/Limited
  Partnership Status

  	
   

  
	
  7.02  Corporate Power and Authority

  	
   

  
	
  7.03  No Violation

  	
   

  
	
  7.04  Governmental Approvals

  	
   

  
	
  7.05  Financial Statements; Financial Condition;
  Undisclosed Liabilities.

  	
   

  
	
  7.06  Litigation

  	
   

  
	
  7.07  True and Complete Disclosure

  	
   

  
	
  7.08  Use of Proceeds; Margin Regulations

  	
   

  
	
  7.09  Tax Returns and Payments

  	
   

  
	
  7.10  Compliance with ERISA

  	
   

  
	
  7.11  The Security Documents

  	
   

  
	
  7.12  Capitalization

  	
   

  
	
  7.13  Subsidiaries

  	
   

  
	
  7.14  Compliance with Statutes, etc.

  	
   

  
	
  7.15  Investment Company Act

  	
   

  
	
  7.16  Public Utility Holding Company Act

  	
   

  
	
  7.17  Pollution and Other Regulations

  	
   

  
	
  7.18  Labor Relations

  	
   

  
	
  7.19  Patents, Licenses, Franchises and Formulas

  	
   

  
	
  7.20  Indebtedness

  	
   

  
	
  7.21  Insurance

  	
   

  
	
  7.22  Concerning the Vessels

  	
   

  
	
  7.23  Citizenship

  	
   

  
	
  7.24  Vessel Classification

  	
   

  
	
  7.25  No Immunity

  	
   

  
	
  7.26  Fees and Enforcement

  	
   

  
	
  7.27  Form of Documentation

  	
   

  

 

ii

 

	
  SECTION 8.  Affirmative Covenants

  	
   

  
	
   

  	
   

  
	
  8.01  Information Covenants

  	
   

  
	
  8.02  Books, Records and Inspections

  	
   

  
	
  8.03  Maintenance of Property; Insurance

  	
   

  
	
  8.04  Corporate Franchises

  	
   

  
	
  8.05  Compliance with Statutes, etc.

  	
   

  
	
  8.06  Compliance with Environmental Laws

  	
   

  
	
  8.07  ERISA

  	
   

  
	
  8.08  End of Fiscal Years; Fiscal Quarters

  	
   

  
	
  8.09  Performance of Obligations

  	
   

  
	
  8.10  Payment of Taxes

  	
   

  
	
  8.11  Further Assurances

  	
   

  
	
  8.12  Deposit of Earnings

  	
   

  
	
  8.13  Ownership of Subsidiaries

  	
   

  
	
  8.14  Flag of Mortgaged Vessels

  	
   

  
	
  8.15  Vessel Delivery Dates

  	
   

  
	
  8.16  Assignment of Construction Contracts and
  Refund Guaranties

  	
   

  
	
   

  	
   

  
	
  SECTION 9.  Negative Covenants

  	
   

  
	
   

  	
   

  
	
  9.01  Liens

  	
   

  
	
  9.02  Consolidation, Merger, Sale of Assets, etc.

  	
   

  
	
  9.03  Shareholder Payments

  	
   

  
	
  9.04  Indebtedness

  	
   

  
	
  9.05  Advances, Investments and Loans

  	
   

  
	
  9.06  Transactions with Affiliates

  	
   

  
	
  9.07  Minimum Cash Balance

  	
   

  
	
  9.08  Maximum Leverage Ratio

  	
   

  
	
  9.09  Minimum Consolidated Net Worth

  	
   

  
	
  9.10  Collateral Maintenance

  	
   

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

  	
   

  
	
  9.12  Limitation on Certain Restrictions on
  Subsidiaries

  	
   

  
	
  9.13  Limitation on Issuance of Capital Stock

  	
   

  
	
  9.14  Business

  	
   

  
	
   

  	
   

  
	
  SECTION 10.  Events of Default

  	
   

  
	
   

  	
   

  
	
  10.01  Payments

  	
   

  
	
  10.02  Representations, etc.

  	
   

  
	
  10.03  Covenants

  	
   

  
	
  10.04  Default Under Other Agreements

  	
   

  
	
  10.05  Bankruptcy, etc.

  	
   

  
	
  10.06  ERISA

  	
   

  
	
  10.07  Security Documents

  	
   

  
	
  10.08  Subsidiaries Guaranty

  	
   

  
	
  10.09  Judgments

  	
   

  

 

iii

 

	
  10.10  Change of Control

  	
   

  
	
   

  	
   

  
	
  SECTION 11.  Definitions and Accounting Terms

  	
   

  
	
   

  	
   

  
	
  11.01  Defined Terms

  	
   

  
	
   

  	
   

  
	
  SECTION 12.  Agency and Security Trustee Provisions

  	
   

  
	
   

  	
   

  
	
  12.01  Appointment

  	
   

  
	
  12.02  Nature of Duties

  	
   

  
	
  12.03  Lack of Reliance on the Agents

  	
   

  
	
  12.04  Certain Rights of the Agents

  	
   

  
	
  12.05  Reliance

  	
   

  
	
  12.06  Indemnification

  	
   

  
	
  12.07  The Administrative Agent in its Individual
  Capacity

  	
   

  
	
  12.08  Holders

  	
   

  
	
  12.09  Resignation by the Administrative Agent

  	
   

  
	
  12.10  The Joint Lead Arrangers

  	
   

  
	
   

  	
   

  
	
  SECTION 13.  Miscellaneous

  	
   

  
	
   

  	
   

  
	
  13.01  Payment of Expenses, etc.

  	
   

  
	
  13.02  Right of Setoff

  	
   

  
	
  13.03  Notices

  	
   

  
	
  13.04  Benefit of Agreement

  	
   

  
	
  13.05  No Waiver; Remedies Cumulative

  	
   

  
	
  13.06  Payments Pro Rata

  	
   

  
	
  13.07  Calculations; Computations

  	
   

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

  	
   

  
	
  13.09  Counterparts

  	
   

  
	
  13.10  Effectiveness

  	
   

  
	
  13.11  Headings Descriptive

  	
   

  
	
  13.12  Amendment or Waiver; etc.

  	
   

  
	
  13.13  Survival

  	
   

  
	
  13.14  Domicile of Loans

  	
   

  
	
  13.15  Limitation on Additional Amounts, etc.

  	
   

  
	
  13.16  Confidentiality

  	
   

  
	
  13.17  Register

  	
   

  
	
  13.18  Judgment Currency

  	
   

  
	
  13.19  Language

  	
   

  
	
  13.20  Waiver of Immunity

  	
   

  
	
  13.21  USA PATRIOT Act Notice

  	
   

  

 

	
  SCHEDULE I

  	
   

  	
  -

  	
   

  	
  Commitments

  	 

	 
	
  SCHEDULE II

  	
   

  	
  -

  	
   

  	
  Lender Addresses

  
	 
	
  SCHEDULE III

  	
   

  	
  -

  	
   

  	
  Mortgaged Vessels

  
	 
	
  SCHEDULE IV

  	
   

  	
  -

  	
   

  	
  Existing Liens

  
											

 

iv

 

	
  SCHEDULE V

  	
   

  	
  -

  	
   

  	
  Indebtedness

  
	
  SCHEDULE VI

  	
   

  	
  -

  	
   

  	
  Insurance

  
	
  SCHEDULE VII

  	
   

  	
  -

  	
   

  	
  ERISA

  
	
  SCHEDULE VIII

  	
   

  	
  -

  	
   

  	
  Subsidiaries

  
	
  SCHEDULE IX

  	
   

  	
  -

  	
   

  	
  Capitalization

  
	
  SCHEDULE X

  	
   

  	
  -

  	
   

  	
  Approved Classification Societies

  
	
  SCHEDULE XI

  	
   

  	
  -

  	
   

  	
  Existing Investments

  
	
  SCHEDULE XII

  	
   

  	
  -

  	
   

  	
  Existing Letters of Credit

  
	
  SCHEDULE XIII

  	
   

  	
  -

  	
   

  	
  Non-Collateral Vessels

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  -

  	
   

  	
  Notice of Borrowing

  
	
  EXHIBIT B

  	
   

  	
  -

  	
   

  	
  Note

  
	
  EXHIBIT C-1

  	
   

  	
  -

  	
   

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

  
	
  EXHIBIT C-2

  	
   

  	
  -

  	
   

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

  
	
  EXHIBIT C-3

  	
   

  	
  -

  	
   

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

  
	
  EXHIBIT C-4

  	
   

  	
  -

  	
   

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

  
	
  EXHIBIT C-5

  	
   

  	
  -

  	
   

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

  
	
  EXHIBIT D

  	
   

  	
  -

  	
   

  	
  Officer’s Certificate

  
	
  EXHIBIT E

  	
   

  	
  -

  	
   

  	
  Subsidiaries Guaranty

  
	
  EXHIBIT F

  	
   

  	
  -

  	
   

  	
  Pledge Agreement

  
	
  EXHIBIT G

  	
   

  	
  -

  	
   

  	
  Assignment of Earnings

  
	
  EXHIBIT H

  	
   

  	
  -

  	
   

  	
  Assignment of Insurances

  
	
  EXHIBIT I-1

  	
   

  	
  -

  	
   

  	
  Form of Marshall Islands Vessel Mortgage

  
	
  EXHIBIT I-2

  	
   

  	
  -

  	
   

  	
  Form of Liberian Vessel Mortgage

  
	
  EXHIBIT J

  	
   

  	
  -

  	
   

  	
  Letter of Credit Request

  
	
  EXHIBIT K

  	
   

  	
  -

  	
   

  	
  Solvency Certificate

  
	
  EXHIBIT L

  	
   

  	
  -

  	
   

  	
  Assignment and Assumption Agreement

  
	
  EXHIBIT M

  	
   

  	
  -

  	
   

  	
  Form of Compliance Certificate

  
	
  EXHIBIT N

  	
   

  	
  -

  	
   

  	
  Subordination Provisions

  
	
  EXHIBIT O

  	
   

  	
  -

  	
   

  	
  Assignment of Construction Contract

  
	
  EXHIBIT P

  	
   

  	
  -

  	
   

  	
  Assignment of Refund Guaranty

  
	
  EXHIBIT Q

  	
   

  	
  -

  	
   

  	
  Consent to Assignment of Construction Contract

  

 

v

 

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

 

W  I  T  N  E  S
S  E  T  H:

 

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

 

NOW, THEREFORE, IT IS AGREED: 

 

SECTION 1.  Amount and
Terms of Credit Facility.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

SECTION 2.  Letters of Credit

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

SECTION 4.  Prepayments;
Payments; Taxes.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

	
  Scheduled Commitment Reduction
  Date

  	
   

  	
  Amount

  	
   

  
	
  October 26,
  2009

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  April 26,
  2010

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  October 26,
  2010

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  April 26,
  2011

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  October 26,
  2011

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  April 26,
  2012

  	
   

  	
  $

  	
  44,500,000

  	
   

  
	
  Maturity
  Date

  	
   

  	
  $

  	
  533,000,000

  	
   

  

 

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

 

17

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

5.03  Opinions of Counsel.

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

(ii)           certified copies of Requests for
Information or Copies (Form UCC-11), or equivalent reports, listing all
effective financing statements that name any Credit Party as debtor and that
are filed in the jurisdictions referred to in Section 5.17(i) above,
together with copies of such other financing statements (none of which shall
cover the Collateral except to the extent evidencing Permitted Liens or in
respect of which the Collateral Agent shall have received Form UCC-3
Termination Statements (or such other termination statements as shall be
required by local law) fully executed for filing); and

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

40

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

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

 

(ii)           certified copies of Requests for
Information or Copies (Form UCC-11), or equivalent reports, listing all
effective financing statements that name any Credit Party as debtor and that
are filed in the jurisdictions referred to in Section 8.16(a) above,
together with copies of such other financing statements (none of which shall
cover the Collateral except to the extent evidencing Permitted Liens or in
respect of which the Collateral Agent shall have received Form UCC-3
Termination Statements (or such other termination statements as shall be
required by local law) fully executed for filing); and

 

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

 

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

 

45

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)          Permitted Encumbrances;

 

(v)           Liens created pursuant to the Security Documents;

 

46

 

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

 

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

 

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

 

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

 

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

 

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

 

47

 

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

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

50

 

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

 

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

 

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

 

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

 

(vi)          the Borrower may make Investments in
its non-Wholly-Owned Subsidiaries; provided that the aggregate amount of
all Investments under this clause (vi) shall not exceed $100,000,000; and

 

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

 

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

 

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

 

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

 

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

 

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

 

51

 

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

 

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

 

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

 

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

 

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

 

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

 

(y) the Aggregate Construction Contract Value

 

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

 

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

 

52

 

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

 

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

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

SECTION 11.  Definitions
and Accounting Terms.

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

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

 

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

 

“Base Rate” shall mean for any day, a rate of
interest per annum equal to the higher of (i) the Prime Rate for such day
and (ii) the sum of the Federal Funds Rate for such day plus 1⁄2 of 1% per
annum.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

61

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

62

 

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

 

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

 

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

 

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

 

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

 

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

 

63

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

	
  Vessel

  	
   

  	
  Delivery Date

  
	
   

  	
   

  	
   

  
	
  Hull No. 038

  	
   

  	
  June 29, 2006

  
	
   

  	
   

  	
   

  
	
  Hull No. 039

  	
   

  	
  January 29, 2007

  
	
   

  	
   

  	
   

  
	
  Hull No. 060

  	
   

  	
  December 29, 2007

  
	
   

  	
   

  	
   

  
	
  Hull No. 061

  	
   

  	
  April 30, 2008

  

 

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

 

64

 

“Documents” shall mean the Credit Documents.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

65

 

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

 

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

 

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

 

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

 

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

 

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

 

66

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            On each Flag Jurisdiction Transfer
Date, the Credit Party which is consummating a Flag Jurisdiction Transfer on
such date shall have duly authorized, executed and delivered, and caused to be
recorded in the appropriate vessel registry a Vessel Mortgage, substantially in
the form of Exhibit I-1 or I-2, as applicable to the Acceptable Flag
Jurisdiction, with respect to the Mortgaged Vessel being transferred (the “Transferred
Vessel”) and the Vessel Mortgage shall be effective to create in favor of
the Collateral Agent and/or the Lenders a legal, valid and enforceable first
priority security interest, in and lien upon such Transferred Vessel, subject
only to Permitted Liens.  All filings,
deliveries of instruments and other actions necessary or desirable in the
reasonable opinion of the Collateral Agent to perfect and preserve such security
interests shall have been duly effected and the Collateral Agent shall have
received evidence thereof in form and substance reasonably satisfactory to the
Collateral Agent.

 

67

 

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

 

(iii)          On each Flag Jurisdiction Transfer
Date:

 

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

 

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

 

(iv)          On or prior to each Flag Jurisdiction
Transfer Date, the Administrative Agent shall have received a certificate,
dated the Flag Jurisdiction Transfer Date, signed by the Chairman of the Board,
the President, any Vice President, the Treasurer or an authorized manager,
member or general partner of the Credit Party commencing such Flag Jurisdiction
Transfer, certifying that (A) all necessary governmental (domestic and
foreign) and third party approvals and/or consents in connection with the Flag

 

68

 

Jurisdiction
Transfer being consummated on such date and otherwise referred to herein shall
have been obtained and remain in effect, (B) there exists no judgment,
order, injunction or other restraint prohibiting or imposing materially adverse
conditions upon such Flag Jurisdiction Transfer or the other transactions
contemplated by this Agreement and (C) copies of resolutions approving the
Flag Jurisdiction Transfer of such Credit Party and any other matters the
Administrative Agent may reasonably request.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

69

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

70

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

73

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

74

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

75

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

76

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

77

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            On the Vessel Exchange Date, if the
Subsidiary owning the Acceptable Replacement Vessel is not a Credit Party,
(A) such Subsidiary shall (1) grant to the Collateral Agent a first
priority Lien (subject only to Permitted Liens) on all property of such
Subsidiary by executing and delivering a counterpart of the Pledge Agreement,
taking all actions required pursuant to Section 25 of the Pledge Agreement
to become a Pledgor thereunder, and taking any other action reasonably
requested by the Administrative Agent and (2) execute and deliver a
counterpart of the Subsidiaries Guaranty and (B) the Borrower shall pledge
and deliver, or cause to be pledged and delivered, all of the capital stock of
such Subsidiary owned by any Credit Party to the Collateral Agent.

 

(ii)           On the applicable Vessel Exchange
Date, the Administrative Agent shall have received from (A) Constantine P. Georgiopoulos, special New York maritime
counsel to the Borrower and each Credit Party (or other counsel to the Borrower
and such

 

78

 

Credit Parties
reasonably satisfactory to the Administrative Agent), an opinion addressed to
the Administrative Agent and each of the Lenders and dated such Vessel Exchange
Date, which shall (x) be in form and substance reasonably acceptable to the
Administrative Agent and (y) cover the recordation of the security interests
granted pursuant to the Vessel Mortgage(s) to be delivered on such date and
such other matters incident thereto as the Administrative Agent may reasonably
request and (B) local counsel to the Credit Parties consummating the
relevant Vessel Exchange reasonably satisfactory to the Administrative Agent
practicing in those jurisdictions in which the Acceptable Replacement Vessel is
registered and/or the Credit Party owning such Acceptable Replacement Vessel is
organized, which opinions shall be addressed to the Administrative Agent and
each of the Lenders and dated such Vessel Exchange Date, which shall (x) be in
form and substance reasonably acceptable to the Administrative Agent and (y)
cover the perfection of the security interests granted pursuant to the Vessel
Mortgage(s) and such other matters incident thereto as the Administrative Agent
may reasonably request.

 

(iii)          On the Vessel Exchange Date, the
Credit Party which is consummating a Vessel Exchange on such date shall have
duly authorized, executed and delivered an Assignment of Earnings in the form
of Exhibit G and a Assignment of Insurances in the form of Exhibit H,
together covering all of such Credit Party’s present and future Earnings and
Insurance Collateral, in each case together with:

 

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

 

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

 

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

 

(iv)          On each Vessel Exchange Date:

 

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

 

79

 

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

 

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

 

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

 

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

 

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

 

80

 

(v)           On or prior to each Vessel Exchange
Date:

 

(A)          The Administrative Agent shall have
received a certificate, dated the Vessel Exchange Date, signed by a senior
financial officer of the Borrower which certificate shall set forth the
calculations required to establish whether the Borrower is in compliance with
the provisions of Section 9.10.

 

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

 

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

 

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

 

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

 

SECTION 12.  Agency and
Security Trustee Provisions.

 

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

 

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

 

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

 

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

 

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

 

82

 

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

 

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

 

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

 

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

 

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

 

83

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 13.  Miscellaneous.

 

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

 

84

 

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

 

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

 

85

 

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

 

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

 

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

 

86

 

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

 

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

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

88

 

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

 

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

 

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

 

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

 

89

 

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

 

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

 

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

 

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

 

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

 

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

 

90

 

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

 

91

 

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

 

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

 

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

 

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

 

92

 

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

 

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

 

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

 

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

 

93

 

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

 

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

 

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

 

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

 

94

 

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

 

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

 

*     *     *

 

95

 

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

 

	
   

  	
  GENERAL MARITIME
  CORPORATION,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John C. Georgiopoulos

  	
   

  
	
   

  	
  Title:

  
	
   

  	
  Address:

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Kramer
  Levin Naftalis & Frankel LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attention: Thomas E. Molner, Esq.

  
	
   

  	
  Telephone: (212) 715-9100

  
	
   

  	
  Facsimile: (212) 715-8000

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORDEA BANK FINLAND PLC,
  NEW YORK

  BRANCH, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Hans Chr. Kjelsrud

  	
   

  
	
   

  	
  Name: Hans Chr. Kjelsrud

  
	
   

  	
  Title:   Senior Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Anne Engen

  	
   

  
	
   

  	
  Name: Anne Engen

  
	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
   

  	
  DNB NOR BANK ASA, NEW YORK BRANCH,

  
	
   

  	
  Individually and as Joint Lead Arranger

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Nikolai A. Nachamkin

  	
   

  
	
   

  	
  Name: Nikolai A. Nachamkin

  
	
   

  	
  Title:   Senior Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Tor Ivar Hansen

  	
   

  
	
   

  	
  Name: Tor Ivar Hansen

  
	
   

  	
  Title:   Assistant Vice President

  
							

 

 

	
   

  	
  HSH NORDBANK AG,

  
	
   

  	
  Individually and as Joint Lead Arranger

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Uta Urbaniak

  	
   

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thorston Lundius

  	
   

  
	
   

  	
  Title: Vice President

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